SECOND DIVISION
G.R. No. 185734, July 03, 2013
ALFREDO C. LIM, JR., Petitioner, v. SPOUSES TITO S. LAZARO AND CARMEN T.
LAZARO,Respondents.
RESOLUTION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the July 10, 2008 Decision2 and December 18, 2008
Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 100270, affirming the March 29, 2007
Order4of the Regional Trial Court of Quezon City, Branch 223 (RTC), which lifted the writ of preliminary
attachment issued in favor of petitioner Alfredo C. Lim, Jr. (Lim, Jr.).
The Facts
On August 22, 2005, Lim, Jr. filed a complaint5 for sum of money with prayer for the issuance of a writ of
preliminary attachment before the RTC, seeking to recover from respondents-spouses Tito S. Lazaro and
Carmen T. Lazaro (Sps. Lazaro) the sum of P2,160,000.00, which represented the amounts stated in several
dishonored checks issued by the latter to the former, as well as interests, attorney’s fees, and costs. The RTC
granted the writ of preliminary attachment application6 and upon the posting of the required P2,160,000.00
bond,7 issued the corresponding writ on October 14, 2005. 8 In this accord, three (3) parcels of land situated
in Bulacan, covered by Transfer Certificates of Title (TCT) Nos. T-64940, T-64939, and T-86369 (subject
TCTs), registered in the names of Sps. Lazaro, were levied upon. 9
In their Answer with Counterclaim,10 Sps. Lazaro averred, among others, that Lim, Jr. had no cause of
action against them since: (a) Colim Merchandise (Colim), and not Lim, Jr., was the payee of the fifteen
(15) Metrobank checks; and (b) the PNB and Real Bank checks were not drawn by them, but by Virgilio
Arcinas and Elizabeth Ramos, respectively. While they admit their indebtedness to Colim, Sps. Lazaro
alleged that the same had already been substantially reduced on account of previous payments which were
apparently misapplied. In this regard, they sought for an accounting and reconciliation of records to
determine the actual amount due. They likewise argued that no fraud should be imputed against them as the
aforesaid checks issued to Colim were merely intended as a form of collateral. 11 Hinged on the same
grounds, Sps. Lazaro equally opposed the issuance of a writ of preliminary attachment. 12
Nonetheless, on September 22, 2006, the parties entered into a Compromise Agreement 13 whereby Sps.
Lazaro agreed to pay Lim, Jr. the amount of P2,351,064.80 on an installment basis, following a schedule of
payments covering the period from September 2006 until October 2013, under the following terms, among
others: (a) that should the financial condition of Sps. Lazaro improve, the monthly installments shall be
increased in order to hasten the full payment of the entire obligation; 14 and (b) that Sps. Lazaro’s failure to
pay any installment due or the dishonor of any of the postdated checks delivered in payment thereof shall
make the whole obligation immediately due and demandable.
The aforesaid compromise agreement was approved by the RTC in its October 31, 2006 Decision15 and
January 5, 2007 Amended Decision.16
Subsequently, Sps. Lazaro filed an Omnibus Motion, 17 seeking to lift the writ of preliminary attachment
annotated on the subject TCTs, which the RTC granted on March 29, 2007. 18 It ruled that a writ of
preliminary attachment is a mere provisional or ancillary remedy, resorted to by a litigant to protect and
preserve certain rights and interests pending final judgment. Considering that the case had already been
considered closed and terminated by the rendition of the January 5, 2007 Amended Decision on the basis of
1
the September 22, 2006 compromise agreement, the writ of preliminary attachment should be lifted and
quashed. Consequently, it ordered the Registry of Deeds of Bulacan to cancel the writ’s annotation on the
subject TCTs.
Lim, Jr. filed a motion for reconsideration19 which was, however, denied on July 26, 2007, 20 prompting him
to file a petition for certiorari21 before the CA.
The CA Ruling
On July 10, 2008, the CA rendered the assailed decision,22 finding no grave abuse of discretion on the
RTC’s part. It observed that a writ of preliminary attachment may only be issued at the commencement of
the action or at any time before entry of judgment. Thus, since the principal cause of action had already been
declared closed and terminated by the RTC, the provisional or ancillary remedy of preliminary attachment
would have no leg to stand on, necessitating its discharge. 23
Aggrieved, Lim, Jr. moved for reconsideration 24 which was likewise denied by the CA in its December 18,
2008 Resolution.25
Hence, the instant petition.
The Issue Before the Court
The sole issue in this case is whether or not the writ of preliminary attachment was properly lifted.
The Court’s Ruling
The petition is meritorious.
By its nature, preliminary attachment, under Rule 57 of the Rules of Court (Rule 57), is an ancillary remedy
applied for not for its own sake but to enable the attaching party to realize upon the relief sought and
expected to be granted in the main or principal action; it is a measure auxiliary or incidental to the main
action. As such, it is available during its pendency which may be resorted to by a litigant to preserve and
protect certain rights and interests during the interim, awaiting the ultimate effects of a final judgment in the
case.26 In addition, attachment is also availed of in order to acquire jurisdiction over the action by actual or
constructive seizure of the property in those instances where personal or substituted service of summons on
the defendant cannot be effected.27
In this relation, while the provisions of Rule 57 are silent on the length of time within which an attachment
lien shall continue to subsist after the rendition of a final judgment, jurisprudence dictates that the said
lien continues until the debt is paid, or the sale is had under execution issued on the judgment or until
the judgment is satisfied, or the attachment discharged or vacated in the same manner provided by
law.28
Applying these principles, the Court finds that the discharge of the writ of preliminary attachment against
the properties of Sps. Lazaro was improper.
Records indicate that while the parties have entered into a compromise agreement which had already been
approved by the RTC in its January 5, 2007 Amended Decision, the obligations thereunder have yet to be
fully complied with – particularly, the payment of the total compromise amount of P2,351,064.80. Hence,
given that the foregoing debt remains unpaid, the attachment of Sps. Lazaro’s properties should have
continued to subsist.
In Chemphil Export & Import Corporation v. CA,29 the Court pronounced that a writ of attachment is not
extinguished by the execution of a compromise agreement between the parties, viz:cralavvonlinelawlibrary
Did the compromise agreement between Antonio Garcia and the consortium discharge the latter’s
attachment lien over the disputed shares?

CEIC argues that a writ of attachment is a mere auxiliary remedy which, upon the dismissal of the case, dies
a natural death. Thus, when the consortium entered into a compromise agreement, which resulted in the
termination of their case, the disputed shares were released from garnishment.

We disagree. To subscribe to CEIC’s contentions would be to totally disregard the concept and purpose of a
preliminary attachment.

xxxx

The case at bench admits of peculiar character in the sense that it involves a compromise agreement.
Nonetheless, x x x. The parties to the compromise agreement should not be deprived of the protection
provided by an attachment lien especially in an instance where one reneges on his obligations under
the agreement, as in the case at bench, where Antonio Garcia failed to hold up his own end of the deal, so
to speak.

xxxx

If we were to rule otherwise, we would in effect create a back door by which a debtor can easily escape his
creditors. Consequently, we would be faced with an anomalous situation where a debtor, in order to buy
time to dispose of his properties, would enter into a compromise agreement he has no intention of honoring
in the first place. The purpose of the provisional remedy of attachment would thus be lost. It would become,
in analogy, a declawed and toothless tiger. (Emphasis and underscoring supplied; citations omitted)

In fine, the Court holds that the writ of preliminary attachment subject of this case should be restored and its
annotation revived in the subject TCTs, re-vesting unto Lim, Jr. his preferential lien over the properties
covered by the same as it were before the cancellation of the said writ. Lest it be misunderstood, the lien or
security obtained by an attachment even before judgment, is in the nature of a vested interest which affords
specific security for the satisfaction of the debt put in suit. 30 Verily, the lifting of the attachment lien would
be tantamount to an abdication of Lim, Jr.’s rights over Sps. Lazaro’s properties which the Court, absent any
justifiable ground therefor, cannot allow.

WHEREFORE, the petition is GRANTED. The July 10, 2008 Decision and the December 18, 2008
Resolution of the Court of Appeals in CA-G.R. SP No. 100270 are REVERSED and SET ASIDE, and the
March 29, 2007 Order of the Regional Trial Court of Quezon City, Branch 223 is NULLIFIED.
Accordingly, the trial court is directed to RESTORE the attachment lien over Transfer Certificates of Title
Nos. T-64940, T-64939, and T-86369, in favor of petitioner Alfredo C. Lim, Jr.

SO ORDERED.

2
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 190028 February 26, 2014
LETICIA P. LIGON, Petitioner,
vs.
THE REGIONAL TRIAL COURT, BRANCH 56 AT MAKATI CITY AND ITS PRESIDING
JUDGE, JUDGE REYNALDO M. LAIGO, SHERIFF IV LUCITO V. ALEJO, ATTY. SILVERIO
GARING, MR. LEONARDO J. TING, AND MR. BENITO G. TECHICO, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 is the Decision2 dated October 30, 2009 of the Court of
Appeals (CA) in CA-G.R. SP No. 106175, finding no grave abuse of discretion on the part of the Regional
Trial Court of Makati City, Branch 56 (Makati City RTC) in issuing the following orders (Assailed Orders)
in Civil Case No. 03-186:
(a) the Order3 dated February 9, 2007 which directed the Register of Deeds of Muntinlupa City, respondent
Atty. Silverio Garing (Atty. Garing), to (1) register the Officer's
Final Deed of Sale issued by respondent SheriffLucito V. Alejo (Sheriff Alejo) on October 27, 2006 in favor
of the highest bidder, respondent Leonardo J. Ting (Ting), (2) cancel Transfer Certificate of Title (TCT) No.
8502/T44 in the name of Spouses Rosario and Saturnino Baladjay (Sps. Baladjay), and (3) issue a new
certificate of title in favor of Ting, free from any liens and encumbrances;
(b) the Order4 dated March 20, 2007 which directed Atty. Garing to comply with the February 9, 2007 Order
under pain of contempt of court; and
(c) the Order5 dated April 25, 2007 which reiterated the directive to Atty. Garing to issue a new title in favor
of Ting after the latter’s payment of capital gains, documentary and transfer taxes, as required.
The Facts
On November 20, 2002, petitioner Leticia P. Ligon (Ligon) filed an amended complaint 6 before the
Regional Trial Court of Quezon City, Branch 101 (Quezon City RTC) for collection of sum of money and
damages, rescission of contract, and nullification of title with prayer for the issuance of a writ of preliminary
attachment, docketed as Civil Case No. Q-10-48145 (Quezon City Case), against Sps. Baladjay, a certain
Olivia Marasigan (Marasigan), Polished Arrow Holdings, Inc. (Polished Arrow), and its
incorporators,7 namely, Spouses Julius Gonzalo and Charaine Doreece Anne Fuentebella (Sps. Fuentebella),
Ma. Linda Mendoza (Mendoza), Barbara C. Clavo (Clavo), Bayani E. Arit, Jr. (Arit, Jr.), and Peter M.
Kairuz (Kairuz), as well as the latter’s spouses (individual defendants).
In her complaint, Ligon alleged, inter alia, that Rosario Baladjay (Rosario) enticed her to extend a short-term
loan in the amount of ₱3,000,000.00, payable in a month’s time and secured by an Allied Bank post-dated
check for the same amount.8 Ligon likewise claimed that Rosario, as further enticement for the loan
extension, represented that she and her husband Saturnino were in the process of selling their property in
Ayala Alabang Village, Muntinlupa City (subject property), covered by a clean title, i.e., TCT No. 8502 9 in
the name of Rosario Baladjay, married to Saturnino Baladjay, and that the proceeds of the said sale could
easily pay-off the loan.10 Unfortunately, the Allied Bank check was dishonored upon presentment and,
despite assurances to replace it with cash, Rosario failed to do so. Moreover, Ligon discovered that the
subject property had already been transferred to Polished Arrow, alleged to be a dummy corporation of Sps.
Baladjay and the individual defendants (defendants). As a result, TCT No. 8502 was cancelled and replaced
on October 11, 2002 by TCT No. 9273 11 in the name of Polished Arrow. Thus, Ligon prayed that all
defendants be held solidarily liable to pay her the amount of ₱3,000,000.00, with interest due, as well as
₱1,000,000.00 as attorney’s fees and another ₱1,000,000.00 by way of moral and exemplary damages.
Asserting that the transfer of the subject property to Polished Arrow was made in fraud of Sps. Baladjay’s
3
creditors, Ligon also prayed that the said transfer be nullified, and that a writ of preliminary attachment be
issued in the interim against defendants’ assets, including the subject property. Subsequently, an Amended
Writ of Preliminary Attachment12 was issued on November 26, 2002, and annotated on the dorsal
portion13 of TCT No. 9273 on December 3, 2002 (December 3, 2002 attachment annotation).
On February 18, 2003, a similar complaint for collection of sum of money, damages, and cancellation of
title with prayer for issuance of a writ of preliminary attachment was lodged before the Makati City RTC,
docketed as Civil Case No. 03-186 (Makati City Case), by Spouses Cecilia and Gil Vicente (Sps. Vicente)
against Sps. Baladjay, Polished Arrow, and other corporations.14 In that case, it was established that Sps.
Baladjay solicited millions of pesos in investments from Sps. Vicente using conduit companies that were
controlled by Rosario, as President and Chairperson. During the proceedings therein, a writ of preliminary
attachment also against the subject property was issued and annotated on the dorsal portion of TCT No.
9273 on March 12, 2003. Thereafter, but before the Quezon City Case was concluded, the Makati City RTC
rendered a Decision15 dated December 9, 2004 (December 9, 2004 Decision), rescinding the transfer of the
subject property from Sps. Baladjay to Polished Arrow upon a finding that the same was made in fraud of
creditors.16 Consequently, the Makati City RTC directed the Register of Deeds of Muntinlupa City to: (a)
cancel TCT No. 9273 in the name of Polished Arrow; and (b) restore TCT No. 8502 "in its previous
condition" in the name of Rosario Baladjay, married to Saturnino Baladjay.
Meanwhile, in the pending Quezon City Case, Polished Arrow and the individual defendants (with the
exception of Marasigan) were successively dropped17 as party-defendants, after it was established that they,
by themselves directly or through other persons, had no more ownership, interest, title, or claim over the
subject property. The parties stipulated on the existence of the December 9, 2004 Decision of the Makati
City RTC, and the fact that the same was no longer questioned by defendants Sps. Fuentebella, Arit, Jr., and
Polished Arrow were made conditions for their dropping as party-defendants in the case.18 In view of the
foregoing, the Quezon City Case proceeded only against Sps. Baladjay and Marasigan and, after due
proceedings, the Quezon City RTC rendered a Decision 19dated March 26, 2008 (March 26, 2008 Decision),
directing Sps. Baladjay to pay Ligon the amount of ₱3,000,000.00 with interest, as well as attorney’s fees
and costs of suit.
On September 25, 2008, the March 26, 2008 Decision of the Quezon City RTC became final and
executory.20However, when Ligon sought its execution, she discovered that the December 3, 2002
attachment annotation had been deleted from TCT No. 9273 when the subject property was sold by way of
public auction on September 9, 2005 to the highest bidder, respondent Ting, for the amount of
₱9,000,000.00 during the execution proceedings in the Makati City Case, as evidenced by the Officer’s
Final Deed of Sale21 dated October 27, 2006 (Officer’s Final Deed of Sale) issued by Sheriff Alejo. In this
regard, Ligon learned that the Makati City RTC had issued its first assailed Order22 dated February 9, 2007
(First Assailed Order), directing Atty. Garing, as the Register of Deeds of Muntinlupa City, to: (a) register
the Officer’s Final Deed of Sale on the official Record Book of the Register of Deeds of Muntinlupa City;
and (b) cancel TCT No. 8502 in the name of Sps. Baladjay and issue a new title in the name of Ting, free
from any liens and encumbrances.
Atty. Garing manifested23 before the Makati City RTC that it submitted the matter en consulta 24 to the Land
Registration Authority (LRA) as he was uncertain whether the annotations on TCT No. 9273 should be
carried over to TCT No. 8502. In response to the manifestation, the Makati City RTC issued its second
assailed Order25 dated March 20, 2007 (Second Assailed Order), directing Atty. Garing to comply with the
First Assailed Order under pain of contempt. It explained that it could not allow the LRA to carry over all
annotations previously annotated on TCT No. 9273 in the name of Polished Arrow as said course of action
would run counter to its December 9, 2004 Decision which specifically ordered the cancellation of said TCT
and the restoration of TCT No. 8502 in its previous condition. It further clarified that: 26
[I]f there were liens or encumbrances annotated on TCT No. 8502 in the name of Rosario Baladjay when the
same was cancelled and TCT No. 9273 was issued by the Register of Deeds of Muntinlupa City in favor of
Polished Arrow Holdings, Inc. based on the Deed of Absolute Sale executed between the former and the
latter, only such liens or encumbrances will have to be carried over to the new Transfer Certificate of Title
that he (Atty. Garing) is mandated to immediately issue in favor of Leonardo J. Ting even as the Order of
the Court dated February 9, 2007 decreed that a new TCT be issued in the name of Mr. Leonardo J. Ting,
free from any encumbrance. On the other hand, if TCT No. 8502 in the name of Rosario Baladjay was free
from any liens or encumbrances when the same was cancelled and TCT No. 9273 was issued by the Register
of Deeds of Muntinlupa City in favor of Polished Arrow Holdings, Inc. by virtue of that Deed of Absolute
Sale executed between Rosario Baladjay and Polished Arrow Holdings, Inc., it necessarily follows that the
new Transfer of Certificate of Title that the said Registrar of Deeds is duty bound to issue immediately in
favor of Leonardo Ting will also be freed from any liens and encumbrances, as simple as that. (Emphases
and underscoring supplied)
Based on the foregoing, it pronounced that it was Atty. Garing’s ministerial duty "to promptly cancel TCT
No. 8502/T-44 in the name of defendant-spouses Baladjay and to issue a new Transfer Certificate of Title in
the name of the highest bidder, Leonardo J. Ting."27
Separately, Ting filed a motion before the Makati City RTC on account of Atty. Garing’s letter 28 dated
March 26, 2006 requiring him to comply with certain documentary requirements and to pay the appropriate
capital gains, documentary stamp and transfer taxes before a new title could be issued in his name. In its
third assailed Order29dated April 25, 2007 (Third Assailed Order), the Makati City RTC directed Ting to pay
the aforesaid taxes and ordered Atty. Garing to immediately cancel TCT No. 8502 and issue a new title in
the former’s name.
On June 7, 2007, Atty. Garing issued TCT No. 19756 30 in the name of Ting, free from any liens and
encumbrances. Later, Ting sold31 the subject property to respondent Benito G. Techico (Techico), resulting
in the cancellation of TCT No. 19756 and the issuance of TCT No. 31001 32 in Techico’s name.
In view of the preceding circumstances, Ligon filed, inter alia, a certiorari petition 33 against respondent
Presiding Judge Reynaldo Laigo (Judge Laigo), Sheriff Alejo, Atty. Garing, Ting, and Techico
(respondents), alleging, among others, that the Makati City RTC committed grave abuse of discretion in
issuing the Assailed Orders. In this relation, she prayed that the said orders be declared null and void for
having been issued in violation of her right to due process, and resulting in (a) the deletion of the December
3, 2002 attachment annotation on TCT No. 9273 which evidences her prior attachment lien over the subject
property, and (b) the issuance of new titles in the names of Ting and Techico.
Consolidated with Ligon’s certiorari petition is a complaint for indirect contempt34 against respondents,
whereby it was alleged that the latter unlawfully interfered with the court processes of the Quezon City
RTC, particularly by deleting the December 3, 2002 attachment annotation on TCT No. 9273 which thereby
prevented the execution of the Quezon City RTC’s March 26, 2008 Decision.
The CA Ruling
In a Decision35 dated October 30, 2009, the CA dismissed Ligon’s certiorari petition, finding that the Makati
City RTC did not gravely abuse its discretion in issuing the Assailed Orders, adding further that the same
was tantamount to a collateral attack against the titles of both Ting and Techico, which is prohibited under
Section 4836 of Presidential Decree No. (PD) 1529.37 Likewise, it dismissed the indirect contempt charge for
lack of sufficient basis, emphasizing that the Assailed Orders were issued prior to the Quezon City RTC’s
Decision, meaning that the said issuances could not have been issued in disregard of the latter decision.
Aggrieved, Ligon filed the present petition.
The Issues Before the Court
The Court resolves the following essential issues: (a) whether or not the CA erred in ruling that the Makati
City RTC did not gravely abuse its discretion in issuing the Assailed Orders; and (b) whether or not Judge
Laigo should be cited in contempt and penalized administratively.
The Court’s Ruling
The petition is partly meritorious.
A. Issuance of the Assailed Orders vis-à-vis
Grave Abuse of Discretion.
4
Attachment is defined as a provisional remedy by which the property of an adverse party is taken into legal
custody, either at the commencement of an action or at any time thereafter, as a security for the satisfaction
of any judgment that may be recovered by the plaintiff or any proper party. 38 Case law instructs that an
attachment is a proceeding in rem, and, hence, is against the particular property, enforceable against the
whole world. Accordingly, the attaching creditor acquires a specific lien on the attached property which
nothing can subsequently destroy except the very dissolution of the attachment or levy itself. Such a
proceeding, in effect, means that the property attached is an indebted thing and a virtual condemnation of it
to pay the owner’s debt. The lien continues until the debt is paid, or sale is had under execution issued on the
judgment, or until the judgment is satisfied, or the attachment discharged or vacated in some manner
provided by law.39 Thus, a prior registration40 of an attachment lien creates a preference,41 such that when an
attachment has been duly levied upon a property, a purchaser thereof subsequent to the attachment takes the
property subject to the said attachment.42 As provided under PD 1529, said registration operates as a form of
constructive notice to all persons.43
Applying these principles to this case, the Court finds that the CA erred in holding that the RTC did not
gravely abuse its discretion in issuing the Assailed Orders as these issuances essentially disregarded, inter
alia, Ligon’s prior attachment lien over the subject property patently anathema to the nature of attachment
proceedings which is well-established in law and jurisprudence.44 In this case, Ligon, in order to secure the
satisfaction of a favorable judgment in the Quezon City Case, applied for and was eventually able to secure
a writ of preliminary attachment45over the subject property on November 25, 2002, which was later
annotated on the dorsal portion46 of TCT No. 9273 in the name of Polished Arrow on December 3, 2002.
Notwithstanding the subsequent cancellation of TCT No. 9273 due to the Makati City RTC’s December 9,
2004 Decision rescinding the transfer of the subject property from Sps. Baladjay to Polished Arrow upon a
finding that the same was made in fraud of creditors, Ligon’s attachment lien over the subject property
continued to subsist since the attachment she had earlier secured binds the property itself, and, hence,
continues until the judgment debt of Sps. Baladjay to Ligon as adjudged in the Quezon City Case is
satisfied, or the attachment discharged or vacated in some manner provided by law. The grave abuse of
discretion of the Makati City RTC lies with its directive to issue a new certificate of title in the name of Ting
(i.e., TCT No. 19756),47 free from any liens and encumbrances. This course of action clearly negates the
efficacy of Ligon’s attachment lien and, also, defies the legal characterization of attachment proceedings. It
bears noting that Ligon’s claim, secured by the aforesaid attachment, is against Sps. Baladjay whose
ownership over the subject property had been effectively restored in view of the RTC’s rescission of the
property’s previous sale to Polished Arrow.48Thus, Sps. Ligon’s attachment lien against Sps. Baladjay as
well as their successors-in-interest should have been preserved, and the annotation thereof carried over to
any subsequent certificate of title,49 the most recent of which as it appears on record is TCT No. 31001 in the
name of Techico, without prejudice to the latter’s right to protect his own ownership interest over the subject
property.
That said, the Court now proceeds to resolve the second and final issue on indirect contempt.
B. Indirect Contempt Charges.
While the Court agrees with Ligon’s position on the issue of grave abuse of discretion, it holds an opposite
view anent its complaint for indirect contempt against Judge Laigo and/or the respondents in this case.
Contempt of court has been defined as a willful disregard or disobedience of a public authority. In its broad
sense, contempt is a disregard of, or disobedience to, the rules or orders of a legislative or judicial body or
an interruption of its proceedings by disorderly behavior or insolent language in its presence or so near
thereto as to disturb its proceedings or to impair the respect due to such a body. In its restricted and more
usual sense, contempt comprehends a despising of the authority, justice, or dignity of a court. 50
Contempt of court is of two (2) kinds, namely: direct and indirect contempt.1âwphi1 Indirect contempt or
constructive contempt is that which is committed out of the presence of the court. Any improper conduct
tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice would constitute
indirect contempt.51
The indirect contempt charges in this case involve an invocation of paragraphs b, c, and d, Section 3, Rule
71 of the Rules of Court which read as follows:
Section 3. Indirect contempt to be punished after charge and hearing. — After a charge in writing has been
filed, and an opportunity given to the respondent to comment thereon within such period as may be fixed by
the court and to be heard by himself or counsel, a person guilty of any of the following acts may be punished
for indirect contempt:
xxxx
(b) Disobedience of or resistance to a lawful writ, x x x;
(c) Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting
direct contempt under section 1 of this Rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration
of justice;
Examining the petition, the Court finds that Ligon failed to sufficiently show how the acts of each of the
respondents, or more specifically, Judge Laigo, constituted any of the acts punishable under the foregoing
section tending towards a wilful disregard or disobedience of a public authority. In issuing the Assailed
Orders, Judge Laigo merely performed his judicial functions pursuant to the December 9, 2004 Decision in
the Makati City Case which had already attained finality. Thus, without Ligon's proper substantiation,
considering too that Judge Laigo's official acts are accorded with the presumption of regularity, 52 the Court
is constrained to dismiss the indirect contempt charges in this case.
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated October 30, 2009 of the Court of
Appeals in CA-G.R. SP No. 106175 is REVERSED and SET ASIDE. Accordingly, the Assailed Orders
subject of this case are hereby declared NULL and VOID only insofar as they relate to the issuance of
Transfer Certificate of Title No. 19756 in the name of respondent Leonardo J. Ting free from any liens and
encumbrances. The Register of Deeds of Muntinlupa City is DIRECTED to carry over and annotate on TCT
No. 31001 in the name of respondent Benito G. Techico the original attachment lien of petitioner Leticia P.
Ligon as described in this Decision. The indirect contempt charges are, however, DISMISSED.
SO ORDERED.

5
G.R. No. 166759 November 25, 2009
SOFIA TORRES, FRUCTOSA TORRES, HEIRS OF MARIO TORRES and SOLAR RESOURCES,
INC.,Petitioners,
vs.
NICANOR SATSATIN, EMILINDA AUSTRIA SATSATIN, NIKKI NORMEL SATSATIN and NIKKI
NORLIN SATSATIN, Respondents.
DECISION
PERALTA, J.:
This is a petition for review on certiorari assailing the Decision1 dated November 23, 2004 of the Court of
Appeals (CA) in CA-G.R. SP No. 83595, and its Resolution2 dated January 18, 2005, denying petitioners’
motion for reconsideration.
The factual and procedural antecedents are as follows:
The siblings Sofia Torres (Sofia), Fructosa Torres (Fructosa), and Mario Torres (Mario) each own adjacent
20,000 square meters track of land situated at Barrio Lankaan, Dasmariñas, Cavite, covered by Transfer
Certificate of Title (TCT) Nos. 251267,3 251266,4 and 251265,5 respectively.
Sometime in 1997, Nicanor Satsatin (Nicanor) asked petitioners’ mother, Agripina Aledia, if she wanted to
sell their lands. After consultation with her daughters, daughter-in-law, and grandchildren, Agripina agreed
to sell the properties. Petitioners, thus, authorized Nicanor, through a Special Power of Attorney, to
negotiate for the sale of the properties.6
Sometime in 1999, Nicanor offered to sell the properties to Solar Resources, Inc. (Solar). Solar allegedly
agreed to purchase the three parcels of land, together with the 10,000-square-meter property owned by a
certain Rustica Aledia, for ₱35,000,000.00. Petitioners alleged that Nicanor was supposed to remit to them
the total amount of ₱28,000,000.00 or ₱9,333,333.00 each to Sofia, Fructosa, and the heirs of Mario.
Petitioners claimed that Solar has already paid the entire purchase price of ₱35,000,000.00 to Nicanor in
Thirty-Two (32) post-dated checks which the latter encashed/deposited on their respective due dates.
Petitioners added that they also learned that during the period from January 2000 to April 2002, Nicanor
allegedly acquired a house and lot at Vista Grande BF Resort Village, Las Piñas City and a car, which he
registered in the names of his unemployed children, Nikki Normel Satsatin and Nikki Norlin Satsatin.
However, notwithstanding the receipt of the entire payment for the subject property, Nicanor only remitted
the total amount of ₱9,000,000.00, leaving an unremitted balance of ₱19,000,000.00. Despite repeated
verbal and written demands, Nicanor failed to remit to them the balance of ₱19,000,000.00.
Consequently, on October 25, 2002, petitioners filed before the regional trial court (RTC) a Complaint 7 for
sum of money and damages, against Nicanor, Ermilinda Satsatin, Nikki Normel Satsatin, and Nikki Norlin
Satsatin. The case was docketed as Civil Case No. 2694-02, and raffled to RTC, Branch 90, Dasmariñas,
Cavite.
On October 30, 2002, petitioners filed an Ex-Parte Motion for the Issuance of a Writ of
Attachment,8 alleging among other things: that respondents are about to depart the Philippines; that they
have properties, real and personal in Metro Manila and in the nearby provinces; that the amount due them
is P19,000,000.00 above all other claims; that there is no other sufficient security for the claim sought to be
enforced; and that they are willing to post a bond fixed by the court to answer for all costs which may be
adjudged to the respondents and all damages which respondents may sustain by reason of the attachment
prayed for, if it shall be finally adjudged that petitioners are not entitled thereto.
On October 30, 2002, the trial court issued an Order9 directing the petitioners to post a bond in the amount
of ₱7,000,000.00 before the court issues the writ of attachment, the dispositive portion of which reads as
follows:
WHEREFORE, premises considered, and finding the present complaint and motion sufficient in form and
substance, this Court hereby directs the herein plaintiffs to post a bond, pursuant to Section 3, Rule 57 of the
1997 Rules of Civil Procedure, in the amount of Seven Million Pesos (P7,000,000.00), before the Writ of
Attachment issues.10
6
On November 15, 2002, petitioners filed a Motion for Deputation of Sheriff,11 informing the court that they
have already filed an attachment bond. They also prayed that a sheriff be deputized to serve the writ of
attachment that would be issued by the court.
In the Order12 dated November 15, 2002, the RTC granted the above motion and deputized the sheriff,
together with police security assistance, to serve the writ of attachment.
Thereafter, the RTC issued a Writ of Attachment13 dated November 15, 2002, directing the sheriff to attach
the estate, real or personal, of the respondents, the decretal portion of which reads:
WE, THEREFORE, command you to attach the estate, real or personal, not exempt from execution, of the
said defendants, in your province, to the value of said demands, and that you safely keep the same according
to the said Rule, unless the defendants give security to pay such judgment as may be recovered on the said
action, in the manner provided by the said Rule, provided that your legal fees and all necessary expenses are
fully paid.
You shall return this writ with your proceedings indorsed hereon within twenty (20) days from the date of
receipt hereof.
GIVEN UNDER MY HAND AND SEAL of this Court, this 15th day of November, 2002, at Imus for
Dasmariñas, Cavite, Philippines.14
On November 19, 2002, a copy of the writ of attachment was served upon the respondents. On the same
date, the sheriff levied the real and personal properties of the respondent, including household appliances,
cars, and a parcel of land located at Las Piñas, Manila.15
On November 21, 2002, summons, together with a copy of the complaint, was served upon the
respondents.16
On November 29, 2002, respondents filed their Answer. 17
On the same day respondents filed their answer, they also filed a Motion to Discharge Writ of
Attachment18anchored on the following grounds: the bond was issued before the issuance of the writ of
attachment; the writ of attachment was issued before the summons was received by the respondents; the
sheriff did not serve copies of the application for attachment, order of attachment, plaintiffs’ affidavit, and
attachment bond, to the respondents; the sheriff did not submit a sheriff’s return in violation of the Rules;
and the grounds cited for the issuance of the writ are baseless and devoid of merit. In the alternative,
respondents offered to post a counter-bond for the lifting of the writ of attachment.19
On March 11, 2003, after the parties filed their respective pleadings, the RTC issued an Order 20 denying the
motion, but at the same time, directing the respondents to file a counter-bond, to wit:
WHEREFORE, premises considered, after the pertinent pleadings of the parties have been taken into
account, the herein defendants are hereby directed to file a counter-bond executed to the attaching party, in
the amount of Seven Million Pesos (₱7,000,000.00), to secure the payment of any judgment that the
attaching party may recover in the action, with notice on the attaching party, whereas, the Motion to
Discharge Writ of Attachment is DENIED.
SO ORDERED.21
Thereafter, respondents filed a motion for reconsideration and/or motion for clarification of the above order.
On April 3, 2003, the RTC issued another Order22 which reads:
In view of the Urgent Motion For Reconsideration And/Or Motion For Clarification of the Order of this
Court dated March 11, 2003, denying their Motion to Discharge Writ of Attachment filed by the defendants
through counsel Atty. Franco L. Loyola, the Motion to Discharge Writ of Attachment is denied until after
the defendants have posted the counter-bond in the amount of Seven Million Pesos (₱7,000,000.00).
The defendants, once again, is directed to file their counter-bond of Seven Million Pesos (₱7,000,000.00), if
it so desires, in order to discharge the Writ of Attachment.
SO ORDERED.
On December 15, 2003, respondents filed an Urgent Motion to Lift/Set Aside Order Dated March [11],
2003,23 which the RTC denied in an Order24 of even date, the dispositive portion of which reads:
WHEREFORE, premises considered, defendants’ Urgent Motion to Lift/Set Aside Order Dated March 23,
2003 (With Manifestation to Dissolve Writ of Attachment) is hereby DENIED for lack of Merit.
SO ORDERED.
Respondents filed an Urgent Motion for Reconsideration, 25 but it was denied in the Order26 dated March 3,
2004.
Aggrieved, respondents filed before the CA a Petition for Certiorari, Mandamus and Prohibition with
Preliminary Injunction and Temporary Restraining Order27 under Rule 65 of the Rules of Court, docketed as
CA-G.R. SP No. 83595, anchored on the following grounds:
(1) public respondents committed grave abuse of discretion amounting to lack of or in excess of
jurisdiction in failing to notice that the lower court has no jurisdiction over the person and subject
matter of the complaint when the subject Writ of Attachment was issued;
(2) public respondents committed grave abuse of discretion amounting to lack of or in excess of
jurisdiction in granting the issuance of the Writ of Attachment despite non-compliance with the
formal requisites for the issuance of the bond and the Writ of Attachment. 28
Respondents argued that the subject writ was improper and irregular having been issued and enforced
without the lower court acquiring jurisdiction over the persons of the respondents. They maintained that the
writ of attachment was implemented without serving upon them the summons together with the complaint.
They also argued that the bond issued in favor of the petitioners was defective, because the bonding
company failed to obtain the proper clearance that it can transact business with the RTC of Dasmariñas,
Cavite. They added that the various clearances which were issued in favor of the bonding company were
applicable only in the courts of the cities of Pasay, Pasig, Manila, and Makati, but not in the RTC, Imus,
Cavite.29
On November 23, 2003, the CA rendered the assailed Decision in favor of the respondents, finding grave
abuse of discretion amounting to lack of or in excess of jurisdiction on the part of the RTC in issuing the
Orders dated December 15, 2003 and March 3, 2004. The decretal portion of the Decision reads:
WHEREFORE, the instant petition is hereby GRANTED. Accordingly, the assailed Orders are hereby
nullified and set aside. The levy on the properties of the petitioners pursuant to the Writ of Attachment
issued by the lower court is hereby LIFTED.
SO ORDERED.30
Petitioners filed a Motion for Reconsideration,31 but it was denied in the Resolution32 dated January 18,
2005.
Hence, this petition assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN ORDERING THE LIFTING OF THE WRIT OF
ATTACHMENT PURSUANT TO SECTION 13, RULE 57 OF THE REVISED RULES OF CIVIL
PROCEDURE.
II.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PUBLIC RESPONDENT
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR IN EXCESS OF
JURISDICTION IN GRANTING THE WRIT OF ATTACHMENT DESPITE THE BOND BEING
INSUFFICIENT AND HAVING BEEN IMPROPERLY ISSUED.
III.
THE HONORABLE COURT OF APPEALS ERRED IN NOT DISMISSING THE PETITION BY
REASON OF ESTOPPEL, LACHES AND PRESCRIPTION AND IN HOLDING THAT THE WRIT OF
ATTACHMENT WAS IMPROPERLY AND IRREGULARLY ENFORCED IN VIOLATION OF
SECTION 5, RULE 57 OF THE REVISED RULES OF COURT.
IV.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PRINCIPLE OF
ESTOPPEL WILL NOT LIE AGAINST RESPONDENTS.
7
Petitioners maintain that in the case at bar, as in the case of FCY Construction Group, Inc. v. Court of
Appeals,33the only way the subject writ of attachment can be dissolved is by a counter-bond. They claim that
the respondents are not allowed to file a motion to dissolve the attachment under Section 13, Rule 57 of the
Rules of Court. Otherwise, the hearing on the motion for the dissolution of the writ would be tantamount to
a trial on the merits, considering that the writ of preliminary attachment was issued upon a ground which is,
at the same time, the applicant’s cause of action.
Petitioners insist that the determination of the existence of grounds to discharge a writ of attachment rests in
the sound discretion of the lower court. They argue that the Certification 34 issued by the Office of the
Administrator and the Certifications35 issued by the clerks of court of the RTCs of Dasmariñas and Imus,
Cavite, would show that the bonds offered by Western Guaranty Corporation, the bonding company which
issued the bond, may be accepted by the RTCs of Dasmariñas and Imus, Cavite, and that the said bonding
company has no pending liability with the government.
Petitioners contend that respondents are barred by estoppel, laches, and prescription from questioning the
orders of the RTC issuing the writ of attachment. They also maintain that the issue whether there was
impropriety or irregularity in the issuance of the orders is moot and academic, considering that the
attachment bond questioned by the respondent had already expired on November 14, 2003 and petitioners
have renewed the attachment bond covering the period from November 14, 2003 to November 14, 2004, and
further renewed to cover the period of November 14, 2004 to November 14, 2005.
The petition is bereft of merit.
A writ of preliminary attachment is defined as a provisional remedy issued upon order of the court where an
action is pending to be levied upon the property or properties of the defendant therein, the same to be held
thereafter by the sheriff as security for the satisfaction of whatever judgment that might be secured in the
said action by the attaching creditor against the defendant. 36
In the case at bar, the CA correctly found that there was grave abuse of discretion amounting to lack of or in
excess of jurisdiction on the part of the trial court in approving the bond posted by petitioners despite the
fact that not all the requisites for its approval were complied with. In accepting a surety bond, it is necessary
that all the requisites for its approval are met; otherwise, the bond should be rejected. 37
Every bond should be accompanied by a clearance from the Supreme Court showing that the company
concerned is qualified to transact business which is valid only for thirty (30) days from the date of its
issuance.38 However, it is apparent that the Certification39 issued by the Office of the Court Administrator
(OCA) at the time the bond was issued would clearly show that the bonds offered by Western Guaranty
Corporation may be accepted only in the RTCs of the cities of Makati, Pasay, and Pasig. Therefore, the
surety bond issued by the bonding company should not have been accepted by the RTC of Dasmariñas,
Branch 90, since the certification secured by the bonding company from the OCA at the time of the issuance
of the bond certified that it may only be accepted in the above-mentioned cities. Thus, the trial court acted
with grave abuse of discretion amounting to lack of or in excess of jurisdiction when it issued the writ of
attachment founded on the said bond.
Moreover, in provisional remedies, particularly that of preliminary attachment, the distinction between the
issuance and the implementation of the writ of attachment is of utmost importance to the validity of the writ.
The distinction is indispensably necessary to determine when jurisdiction over the person of the defendant
should be acquired in order to validly implement the writ of attachment upon his person.
This Court has long put to rest the issue of when jurisdiction over the person of the defendant should be
acquired in cases where a party resorts to provisional remedies. A party to a suit may, at any time after filing
the complaint, avail of the provisional remedies under the Rules of Court. Specifically, Rule 57 on
preliminary attachment speaks of the grant of the remedy "at the commencement of the action or at any time
before entry of judgment."40 This phrase refers to the date of the filing of the complaint, which is the
moment that marks "the commencement of the action." The reference plainly is to a time before summons is
served on the defendant, or even before summons issues. 41
In Davao Light & Power Co., Inc. v. Court of Appeals, 42 this Court clarified the actual time when issuance of the attachment writ by simply availing himself of one way of discharging the attachment writ,
jurisdiction should be had: instead of the other. The filing of a counter-bond is merely a speedier way of discharging the attachment
It goes without saying that whatever be the acts done by the Court prior to the acquisition of jurisdiction writ instead of the other way.45
over the person of defendant x x x issuance of summons, order of attachment and writ of attachment x x x Moreover, again assuming arguendo that the writ of attachment was validly issued, although the trial court
these do not and cannot bind and affect the defendant until and unless jurisdiction over his person is later acquired jurisdiction over the respondents by service of the summons upon them, such belated service
eventually obtained by the court, either by service on him of summons or other coercive process or his of summons on respondents cannot be deemed to have cured the fatal defect in the enforcement of the writ.
voluntary submission to the court’s authority. Hence, when the sheriff or other proper officer The trial court cannot enforce such a coercive process on respondents without first obtaining jurisdiction
commences implementation of the writ of attachment, it is essential that he serve on the defendant not only a over their person. The preliminary writ of attachment must be served after or simultaneous with the service
copy of the applicant’s affidavit and attachment bond, and of the order of attachment, as explicitly required of summons on the defendant whether by personal service, substituted service or by publication as
by Section 5 of Rule 57, but also the summons addressed to said defendant as well as a copy of the warranted by the circumstances of the case. The subsequent service of summons does not confer a
complaint x x x. (Emphasis supplied.) retroactive acquisition of jurisdiction over her person because the law does not allow for retroactivity of a
In Cuartero v. Court of Appeals,43 this Court held that the grant of the provisional remedy of attachment belated service.46
involves three stages: first, the court issues the order granting the application; second, the writ of attachment WHEREFORE, premises considered, the petition is DENIED. The Decision and Resolution of the Court of
issues pursuant to the order granting the writ; and third, the writ is implemented. For the initial two stages, it Appeals dated November 23, 2004 and January 18, 2005, respectively, in CA-G.R. SP No. 83595 are
is not necessary that jurisdiction over the person of the defendant be first obtained. However, once the AFFIRMED.
implementation of the writ commences, the court must have acquired jurisdiction over the defendant, for SO ORDERED.
without such jurisdiction, the court has no power and authority to act in any manner against the defendant.
Any order issuing from the Court will not bind the defendant. 44
Thus, it is indispensable not only for the acquisition of jurisdiction over the person of the defendant, but also
upon consideration of fairness, to apprise the defendant of the complaint against him and the issuance of a
writ of preliminary attachment and the grounds therefor that prior or contemporaneously to the serving of
the writ of attachment, service of summons, together with a copy of the complaint, the application for
attachment, the applicant’s affidavit and bond, and the order must be served upon him.
In the instant case, assuming arguendo that the trial court validly issued the writ of attachment on November
15, 2002, which was implemented on November 19, 2002, it is to be noted that the summons, together with
a copy of the complaint, was served only on November 21, 2002.
At the time the trial court issued the writ of attachment on November 15, 2002, it can validly to do so since
the motion for its issuance can be filed "at the commencement of the action or at any time before entry of
judgment." However, at the time the writ was implemented, the trial court has not acquired jurisdiction over
the persons of the respondent since no summons was yet served upon them. The proper officer should have
previously or simultaneously with the implementation of the writ of attachment, served a copy of the
summons upon the respondents in order for the trial court to have acquired jurisdiction upon them and for
the writ to have binding effect. Consequently, even if the writ of attachment was validly issued, it was
improperly or irregularly enforced and, therefore, cannot bind and affect the respondents.
Moreover, although there is truth in the petitioners’ contention that an attachment may not be dissolved by a
showing of its irregular or improper issuance if it is upon a ground which is at the same time the applicant’s
cause of action in the main case, since an anomalous situation would result if the issues of the main case
would be ventilated and resolved in a mere hearing of a motion. However, the same is not applicable in the
case bar. It is clear from the respondents’ pleadings that the grounds on which they base the lifting of the
writ of attachment are the irregularities in its issuance and in the service of the writ; not petitioners’ cause of
action.1avvphi1
Further, petitioners’ contention that respondents are barred by estoppel, laches, and prescription from
questioning the orders of the RTC issuing the writ of attachment and that the issue has become moot and
academic by the renewal of the attachment bond covering after its expiration, is devoid of merit. As
correctly held by the CA:
There are two ways of discharging the attachment. First, to file a counter-bond in accordance with Section
12 of Rule 57. Second[,] [t]o quash the attachment on the ground that it was irregularly or improvidently
issued, as provided for in Section 13 of the same rule. Whether the attachment was discharged by either of
the two ways indicated in the law, the attachment debtor cannot be deemed to have waived any defect in the

8
435 Phil. 870
THIRD DIVISION
[ G.R. No. 125027, August 12, 2002 ]
ANITA MANGILA, PETITIONER, VS. COURT OF APPEALS AND LORETA GUINA, RESPONDENTS.
DECISION
CARPIO, J.:
This is a petition fore review on certiorari under Rule 45 of the Rules of Court, seeking to set aside the
Decision[1] of the Court of Appeals affirming the Decision[2] of the Regional Trial Court, Branch 108, Pasay
City. The trial court upheld the writ of attachment and the declaration of default on petitioner while ordering
her to pay private respondent P109,376.95 plus 18 percent interest per annum, 25 percent attorney’s fees and
costs of suit.
The Facts
Petitioner Anita Mangila (“petitioner” for brevity) is an exporter of sea foods and doing business under the
name and style of Seafoods Products. Private respondent Loreta Guina (“private respondent” for brevity) is
the President and General Manager of Air Swift International, a single registered proprietorship engaged in
the freight forwarding business.
Sometime in January 1988, petitioner contracted the freight forwarding services of private respondent for
shipment of petitioner’s products, such as crabs, prawns and assorted fishes, to Guam (USA) where
petitioner maintains an outlet. Petitioner agreed to pay private respondent cash on delivery. Private
respondent’s invoice stipulates a charge of 18 percent interest per annum on all overdue accounts. In case of
suit, the same invoice stipulates attorney’s fees equivalent to 25 percent of the amount due plus costs of
suit.[3]
On the first shipment, petitioner requested for seven days within which to pay private respondent. However,
for the next three shipments, March 17, 24 and 31, 1988, petitioner failed to pay private respondent shipping
charges amounting to P109, 376.95.[4]
Despite several demands, petitioner never paid private respondent. Thus, on June 10, 1988, private
respondent filed Civil Case No. 5875 before the Regional Trial Court of Pasay City for collection of sum of
money.
On August 1, 1988, the sheriff filed his Sheriff’s Return showing that summons was not served on
petitioner. A woman found at petitioner’s house informed the sheriff that petitioner transferred her residence
to Sto. Niño, Guagua, Pampanga. The sheriff found out further that petitioner had left the Philippines for
Guam.[5]
Thus, on September 13, 1988, construing petitioner’s departure from the Philippines as done with intent to
defraud her creditors, private respondent filed a Motion for Preliminary Attachment. On September 26,
1988, the trial court issued an Order of Preliminary Attachment [6] against petitioner. The following day, the
trial court issued a Writ of Preliminary Attachment.
The trial court granted the request of its sheriff for assistance from their counterparts in RTC, Pampanga.
Thus, on October 28, 1988, Sheriff Alfredo San Miguel of RTC Pampanga served on petitioner’s household
help in San Fernando, Pampanga, the Notice of Levy with the Order, Affidavit and Bond. [7]
On November 7, 1988, petitioner filed an Urgent Motion to Discharge Attachment [8] without submitting
herself to the jurisdiction of the trial court. She pointed out that up to then, she had not been served a copy of
the Complaint and the summons. Hence, petitioner claimed the court had not acquired jurisdiction over her
person.[9]
In the hearing of the Urgent Motion to Discharge Attachment on November 11, 1988, private respondent
sought and was granted a re-setting to December 9, 1988. On that date, private respondent’s counsel did not
appear, so the Urgent Motion to Discharge Attachment was deemed submitted for resolution. [10]
9
The trial court granted the Motion to Discharge Attachment on January 13, 1989 upon filing of petitioner’s
counter-bond. The trial court, however, did not rule on the question of jurisdiction and on the validity of the
writ of preliminary attachment.
On December 26, 1988, private respondent applied for an alias summons, which the trial court issued on
January 19, 1989.[11] It was only on January 26, 1989 that summons was finally served on petitioner. [12]
On February 9, 1989, petitioner filed a Motion to Dismiss the Complaint on the ground of improper venue.
Private respondent’s invoice for the freight forwarding service stipulates that “if court litigation becomes
necessary to enforce collection xxx the agreed venue for such action is Makati, Metro Manila.” [13] Private
respondent filed an Opposition asserting that although “Makati” appears as the stipulated venue, the same
was merely an inadvertence by the printing press whose general manager executed an affidavit [14] admitting
such inadvertence. Moreover, private respondent claimed that petitioner knew that private respondent was
holding office in Pasay City and not in Makati. [15] The lower court, finding credence in private respondent’s
assertion, denied the Motion to Dismiss and gave petitioner five days to file her Answer. Petitioner filed a
Motion for Reconsideration but this too was denied.
Petitioner filed her Answer[16] on June 16, 1989, maintaining her contention that the venue was improperly
laid.
On June 26, 1989, the trial court issued an Order setting the pre-trial for July 18, 1989 at 8:30 a.m. and
requiring the parties to submit their pre-trial briefs. Meanwhile, private respondent filed a Motion to Sell
Attached Properties but the trial court denied the motion.
On motion of petitioner, the trial court issued an Order resetting the pre-trial from July 18, 1989 to August
24, 1989 at 8:30 a.m..
On August 24, 1989, the day of the pre-trial, the trial court issued an Order[17] terminating the pre-trial and
allowing the private respondent to present evidence ex-parte on September 12, 1989 at 8:30 a.m.. The Order
stated that when the case was called for pre-trial at 8:31 a.m., only the counsel for private respondent
appeared. Upon the trial court’s second call 20 minutes later, petitioner’s counsel was still nowhere to be
found. Thus, upon motion of private respondent, the pre-trial was considered terminated.
On September 12, 1989, petitioner filed her Motion for Reconsideration of the Order terminating the pre-
trial. Petitioner explained that her counsel arrived 5 minutes after the second call, as shown by the transcript
of stenographic notes, and was late because of heavy traffic. Petitioner claims that the lower court erred in
allowing private respondent to present evidence ex-parte since there was no Order considering the petitioner
as in default. Petitioner contends that the Order of August 24, 1989 did not state that petitioner was declared
as in default but still the court allowed private respondent to present evidence ex-parte.[18]
On October 6, 1989, the trial court denied the Motion for Reconsideration and scheduled the presentation of
private respondent’s evidence ex-parte on October 10, 1989.
On October 10, 1989, petitioner filed an Omnibus Motion stating that the presentation of evidence ex-parte
should be suspended because there was no declaration of petitioner as in default and petitioner’s counsel
was not absent, but merely late.
On October 18, 1989, the trial court denied the Omnibus Motion. [19]
On November 20, 1989, the petitioner received a copy of the Decision of November 10, 1989, ordering
petitioner to pay respondent P109,376.95 plus 18 percent interest per annum, 25 percent attorney’s fees and
costs of suit. Private respondent filed a Motion for Execution Pending Appeal but the trial court denied the
same.
The Ruling of the Court of Appeals
On December 15, 1995, the Court of Appeals rendered a decision affirming the decision of the trial court.
The Court of Appeals upheld the validity of the issuance of the writ of attachment and sustained the filing of
the action in the RTC of Pasay. The Court of Appeals also affirmed the declaration of default on petitioner
and concluded that the trial court did not commit any reversible error.
Petitioner filed a Motion for Reconsideration on January 5, 1996 but the Court of Appeals denied the same
in a Resolution dated May 20, 1996.
Hence, this petition.
The Issues
The issues raised by petitioner may be re-stated as follows:
I.
WHETHER RESPONDENT COURT ERRED IN NOT HOLDING THAT THE WRIT OF
ATTACHMENT WAS IMPROPERLY ISSUED AND SERVED;
II.
WHETHER THERE WAS A VALID DECLARATION OF DEFAULT;
III.
WHETHER THERE WAS IMPROPER VENUE.
IV.
WHETHER RESPONDENT COURT ERRED IN DECLARING THAT PETITIONER IS OBLIGED TO
PAY P109, 376.95, PLUS ATTORNEY’S FEES.[20]
The Ruling of the Court
Improper Issuance and Service of Writ of Attachment
Petitioner ascribes several errors to the issuance and implementation of the writ of attachment. Among
petitioner’s arguments are: first, there was no ground for the issuance of the writ since the intent to defraud
her creditors had not been established; second, the value of the properties levied exceeded the value of
private respondent’s claim. However, the crux of petitioner’s arguments rests on the question of the validity
of the writ of attachment. Because of failure to serve summons on her before or simultaneously with the
writ’s implementation, petitioner claims that the trial court had not acquired jurisdiction over her person and
thus the service of the writ is void.
As a preliminary note, a distinction should be made between issuance and implementation of the writ of
attachment. It is necessary to distinguish between the two to determine when jurisdiction over the person of
the defendant should be acquired to validly implement the writ. This distinction is crucial in resolving
whether there is merit in petitioner’s argument.
This Court has long settled the issue of when jurisdiction over the person of the defendant should be
acquired in cases where a party resorts to provisional remedies. A party to a suit may, at any time after filing
the complaint, avail of the provisional remedies under the Rules of Court. Specifically, Rule 57 on
preliminary attachment speaks of the grant of the remedy “at the commencement of the action or at any time
thereafter.”[21] This phrase refers to the date of filing of the complaint which is the moment that marks “the
commencement of the action.” The reference plainly is to a time before summons is served on the defendant,
or even before summons issues.
In Davao Light & Power Co., Inc. v. Court of Appeals,[22] this Court clarified the actual time when
jurisdiction should be had:
“It goes without saying that whatever be the acts done by the Court prior to the acquisition of jurisdiction
over the person of defendant - issuance of summons, order of attachment and writ of attachment - these do
not and cannot bind and affect the defendant until and unless jurisdiction over his person is eventually
obtained by the court, either by service on him of summons or other coercive process or his voluntary
submission to the court’s authority. Hence, when the sheriff or other proper officer commences
implementation of the writ of attachment, it is essential that he serve on the defendant not only a copy of the
applicant’s affidavit and attachment bond, and of the order of attachment, as explicitly required by Section 5
of Rule 57, but also the summons addressed to said defendant as well as a copy of the complaint xxx.”
(Emphasis supplied.)
Furthermore, we have held that the grant of the provisional remedy of attachment involves three stages: first,
the court issues the order granting the application; second, the writ of attachment issues pursuant to the order
granting the writ; and third, the writ is implemented. For the initial two stages, it is not necessary that
10
jurisdiction over the person of the defendant be first obtained. However, once the implementation of the writ
commences, the court must have acquired jurisdiction over the defendant for without such jurisdiction, the
court has no power and authority to act in any manner against the defendant. Any order issuing from the
Court will not bind the defendant.[23]
In the instant case, the Writ of Preliminary Attachment was issued on September 27, 1988 and implemented
on October 28, 1988. However, the alias summons was served only on January 26, 1989 or almost three
months after the implementation of the writ of attachment.
The trial court had the authority to issue the Writ of Attachment on September 27 since a motion for its
issuance can be filed “at the commencement of the action.” However, on the day the writ was implemented,
the trial court should have, previously or simultaneously with the implementation of the writ, acquired
jurisdiction over the petitioner. Yet, as was shown in the records of the case, the summons was actually
served on petitioner several months after the writ had been implemented.
Private respondent, nevertheless, claims that the prior or contemporaneous service of summons
contemplated in Section 5 of Rule 57 provides for exceptions. Among such exceptions are “where the
summons could not be served personally or by substituted service despite diligent efforts or where the
defendant is a resident temporarily absent therefrom x x x.” Private respondent asserts that when she
commenced this action, she tried to serve summons on petitioner but the latter could not be located at her
customary address in Kamuning, Quezon City or at her new address in Guagua, Pampanga. [24] Furthermore,
respondent claims that petitioner was not even in Pampanga; rather, she was in Guam purportedly on a
business trip.
Private respondent never showed that she effected substituted service on petitioner after her personal service
failed. Likewise, if it were true that private respondent could not ascertain the whereabouts of petitioner
after a diligent inquiry, still she had some other recourse under the Rules of Civil Procedure.
The rules provide for certain remedies in cases where personal service could not be effected on a party.
Section 14, Rule 14 of the Rules of Court provides that whenever the defendant’s “whereabouts are
unknown and cannot be ascertained by diligent inquiry, service may, by leave of court, be effected upon him
by publication in a newspaper of general circulation x x x.” Thus, if petitioner’s whereabouts could not be
ascertained after the sheriff had served the summons at her given address, then respondent could have
immediately asked the court for service of summons by publication on petitioner. [25]
Moreover, as private respondent also claims that petitioner was abroad at the time of the service of
summons, this made petitioner a resident who is temporarily out of the country. This is the exact situation
contemplated in Section 16,[26] Rule 14 of the Rules of Civil Procedure, providing for service of summons
by publication.
In conclusion, we hold that the alias summons belatedly served on petitioner cannot be deemed to have
cured the fatal defect in the enforcement of the writ. The trial court cannot enforce such a coercive process
on petitioner without first obtaining jurisdiction over her person. The preliminary writ of attachment must be
served after or simultaneous with the service of summons on the defendant whether by personal service,
substituted service or by publication as warranted by the circumstances of the case. [27] The subsequent
service of summons does not confer a retroactive acquisition of jurisdiction over her person because the law
does not allow for retroactivity of a belated service.
Improper Venue
Petitioner assails the filing of this case in the RTC of Pasay and points to a provision in private respondent’s
invoice which contains the following:
“3. If court litigation becomes necessary to enforce collection, an additional equivalent (sic) to 25% of the
principal amount will be charged. The agreed venue for such action is Makati, Metro Manila,
Philippines.”[28]
Based on this provision, petitioner contends that the action should have been instituted in the RTC of Makati
and to do otherwise would be a ground for the dismissal of the case.
We resolve to dismiss the case on the ground of improper venue but not for the reason stated by petitioner.
The Rules of Court provide that parties to an action may agree in writing on the venue on which an action acknowledges in its caption that the plaintiff and defendant are Loreta Guina and Anita Mangila,
should be brought.[29] However, a mere stipulation on the venue of an action is not enough to preclude respectively. The title of the petition before us does not state, and rightly so, Anita Mangila v. Air Swift
parties from bringing a case in other venues.[30] The parties must be able to show that such stipulation is International, but rather Anita Mangila v. Loreta Guina. Logically then, it is the residence of private
exclusive. Thus, absent words that show the parties’ intention to restrict the filing of a suit in a particular respondent Guina, the proprietor with the juridical personality, which should be considered as one of the
place, courts will allow the filing of a case in any venue, as long as jurisdictional requirements are followed. proper venues for this case.
Venue stipulations in a contract, while considered valid and enforceable, do not as a rule supersede the All these considered, private respondent should have filed this case either in San Fernando, Pampanga
general rule set forth in Rule 4 of the Revised Rules of Court. [31] In the absence of qualifying or restrictive (petitioner’s residence) or Parañaque (private respondent’s residence). Since private respondent
words, they should be considered merely as an agreement on additional forum, not as limiting venue to the (complainant below) filed this case in Pasay, we hold that the case should be dismissed on the ground of
specified place.[32] improper venue.
In the instant case, the stipulation does not limit the venue exclusively to Makati. There are no qualifying or Although petitioner filed an Urgent Motion to Discharge Attachment in the lower court, petitioner expressly
restrictive words in the invoice that would evince the intention of the parties that Makati is the “only or stated that she was filing the motion without submitting to the jurisdiction of the court. At that time,
exclusive” venue where the action could be instituted. We therefore agree with private respondent that petitioner had not been served the summons and a copy of the complaint. [43] Thereafter, petitioner timely
Makati is not the only venue where this case could be filed. filed a Motion to Dismiss[44] on the ground of improper venue. Rule 16, Section 1 of the Rules of Court
Nevertheless, we hold that Pasay is not the proper venue for this case. provides that a motion to dismiss may be filed “[W]ithin the time for but before filing the answer to the
Under the 1997 Rules of Civil Procedure, the general rule is venue in personal actions is “where the complaint or pleading asserting a claim.” Petitioner even raised the issue of improper venue in his
defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs Answer[45] as a special and affirmative defense. Petitioner also continued to raise the issue of improper
resides, at the election of the plaintiff.”[33] The exception to this rule is when the parties agree on an venue in her Petition for Review[46] before this Court. We thus hold that the dismissal of this case on the
exclusive venue other than the places mentioned in the rules. But, as we have discussed, this exception is not ground of improper venue is warranted.
applicable in this case. Hence, following the general rule, the instant case may be brought in the place of The rules on venue, like other procedural rules, are designed to insure a just and orderly administration of
residence of the plaintiff or defendant, at the election of the plaintiff (private respondent herein). justice or the impartial and evenhanded determination of every action and proceeding. Obviously, this
In the instant case, the residence of private respondent (plaintiff in the lower court) was not alleged in the objective will not be attained if the plaintiff is given unrestricted freedom to choose where to file the
complaint. Rather, what was alleged was the postal address of her sole proprietorship, Air Swift complaint or petition.[47]
International. It was only when private respondent testified in court, after petitioner was declared in default, We find no reason to rule on the other issues raised by petitioner.
that she mentioned her residence to be in Better Living Subdivision, Parañaque City. WHEREFORE, the petition is GRANTED on the grounds of improper venue and invalidity of the service of
In the earlier case of Sy v. Tyson Enterprises, Inc.,[34] the reverse happened. The plaintiff in that case was the writ of attachment. The decision of the Court of Appeals and the order of respondent judge denying the
Tyson Enterprises, Inc., a corporation owned and managed by Dominador Ti. The complaint, however, did motion to dismiss are REVERSED and SET ASIDE. Civil Case No. 5875 is hereby dismissed without
not allege the office or place of business of the corporation, which was in Binondo, Manila. What was prejudice to refiling it in the proper venue. The attached properties of petitioner are ordered returned to her
alleged was the residence of Dominador Ti, who lived in San Juan, Rizal. The case was filed in the Court of immediately.
First Instance of Rizal, Pasig. The Court there held that the evident purpose of alleging the address of the SO ORDERED.
corporation’s president and manager was to justify the filing of the suit in Rizal, Pasig instead of in Manila.
Thus, the Court ruled that there was no question that venue was improperly laid in that case and held that the
place of business of Tyson Enterpises, Inc. is considered as its residence for purposes of venue.
Furthermore, the Court held that the residence of its president is not the residence of the corporation because
a corporation has a personality separate and distinct from that of its officers and stockholders.
In the instant case, it was established in the lower court that petitioner resides in San Fernando,
Pampanga[35] while private respondent resides in Parañaque City.[36] However, this case was brought in
Pasay City, where the business of private respondent is found. This would have been permissible had private
respondent’s business been a corporation, just like the case in Sy v. Tyson Enterprises, Inc. However, as
admitted by private respondent in her Complaint[37] in the lower court, her business is a sole proprietorship,
and as such, does not have a separate juridical personality that could enable it to file a suit in court.[38] In
fact, there is no law authorizing sole proprietorships to file a suit in court. [39]
A sole proprietorship does not possess a juridical personality separate and distinct from the personality of
the owner of the enterprise.[40] The law merely recognizes the existence of a sole proprietorship as a form of
business organization conducted for profit by a single individual and requires its proprietor or owner to
secure licenses and permits, register its business name, and pay taxes to the national government.[41] The law
does not vest a separate legal personality on the sole proprietorship or empower it to file or defend an action
in court.[42]
Thus, not being vested with legal personality to file this case, the sole proprietorship is not the plaintiff in
this case but rather Loreta Guina in her personal capacity. In fact, the complaint in the lower court

11
G.R. No. 139941 January 19, 2001
VICENTE B. CHUIDIAN, petitioner,
vs.
SANDIGANBAYAN (Fifth Division) and the REPUBLIC OF THE PHILIPPINES, respondents.
YNARES-SANTIAGO, J.:
The instant petition arises from transactions that were entered into by the government in the penultimate
days of the Marcos administration. Petitioner Vicente B. Chuidian was alleged to be a dummy or nominee of
Ferdinand and Imelda Marcos in several companies said to have been illegally acquired by the Marcos
spouses. As a favored business associate of the Marcoses, Chuidian allegedly used false pretenses to induce
the officers of the Philippine Export and Foreign Loan Guarantee Corporation (PHILGUARANTEE), the
Board of Investments (BOI) and the Central Bank, to facilitate the procurement and issuance of a loan
guarantee in favor of the Asian Reliability Company, Incorporated (ARCI) sometime in September 1980.
ARCI, 98% of which was allegedly owned by Chuidian, was granted a loan guarantee of Twenty-Five
Million U.S. Dollars (US$25,000,000.00).1âwphi1.nêt
While ARCI represented to Philguarantee that the loan proceeds would be used to establish five inter-related
projects in the Philippines, Chuidian reneged on the approved business plan and instead invested the
proceeds of the loan in corporations operating in the United States, more particularly Dynetics, Incorporated
and Interlek, Incorporated. Although ARCI had received the proceeds of the loan guaranteed by
Philguarantee, the former defaulted in the payments thereof, compelling Philguarantee to undertake
payments for the same. Consequently, in June 1985, Philguarantee sued Chuidian before the Santa Clara
County Superior Court,1 charging that in violation of the terms of the loan, Chuidian not only defaulted in
payment, but also misused the funds by investing them in Silicon Valley corporations and using them for his
personal benefit.
For his part, Chuidian claimed that he himself was a victim of the systematic plunder perpetrated by the
Marcoses as he was the true owner of these companies, and that he had in fact instituted an action before the
Federal Courts of the United States to recover the companies which the Marcoses had illegally wrested from
him.2
On November 27, 1985, or three (3) months before the successful people's revolt that toppled the Marcos
dictatorship, Philguarantee entered into a compromise agreement with Chuidian whereby petitioner
Chuidian shall assign and surrender title to all his companies in favor of the Philippine government. In
return, Philguarantee shall absolve Chuidian from all civil and criminal liability, and in so doing, desist from
pursuing any suit against Chuidian concerning the payments Philguarantee had made on Chuidian's
defaulted loans.
It was further stipulated that instead of Chuidian reimbursing the payments made by Philguarantee arising
from Chuidian's default, the Philippine government shall pay Chuidian the amount of Five Million Three
Hundred Thousand Dollars (US$5,300,000.00). Initial payment of Five Hundred Thousand Dollars
(US$500,000.00) was actually received by Chuidian, as well as succeeding payment of Two Hundred
Thousand Dollars (US$200,000.00). The remaining balance of Four Million Six Hundred Thousand Dollars
(US$4,600,000.00) was to be paid through an irrevocable Letter of Credit (L/C) from which Chuidian would
draw One Hundred Thousand Dollars (US$100,000.00) monthly. 3 Accordingly, on December 12, 1985, L/C
No. SSD-005-85 was issued for the said amount by the Philippine National Bank (PNB). Subsequently,
Chuidian was able to make two (2) monthly drawings from said L/C at the Los Angeles branch of the PNB. 4
With the advent of the Aquino administration, the newly-established Presidential Commission on Good
Government (PCGG) exerted earnest efforts to search and recover money, gold, properties, stocks and other
assets suspected as having been illegally acquired by the Marcoses, their relatives and cronies.
Petitioner Chuidian was among those whose assets were sequestered by the PCGG. On May 30, 1986, the
PCGG issued a Sequestration Order5 directing the PNB to place under its custody, for and in behalf of the
PCGG, the irrevocable L/C (No. SSD-005-85). Although Chuidian was then residing in the United States,
his name was placed in the Department of Foreign Affairs' Hold Order list.6
12
In the meantime, Philguarantee filed a motion before the Superior Court of Santa Clara County of California
in Civil Case Nos. 575867 and 577697 seeking to vacate the stipulated judgment containing the settlement
between Philguarantee and Chuidian on the grounds that: (a) Philguarantee was compelled by the Marcos
administration to agree to the terms of the settlement which was highly unfavorable to Philguarantee and
grossly disadvantageous to the government; (b) Chuidian blackmailed Marcos into pursuing and concluding
the settlement agreement by threatening to expose the fact that the Marcoses made investments in Chuidian's
American enterprises; and (c) the Aquino administration had ordered Philguarantee not to make further
payments on the L/C to Chuidian. After considering the factual matters before it, the said court concluded
that Philguarantee "had not carried its burden of showing that the settlement between the parties should be
set aside."7 On appeal, the Sixth Appellate District of the Court of Appeal of the State of California affirmed
the judgment of the Superior Court of Sta. Clara County denying Philguarantee's motion to vacate the
stipulated judgment based on the settlement agreement.8
After payment on the L/C was frozen by the PCGG, Chuidian filed before the United States District Court,
Central District of California, an action against PNB seeking, among others, to compel PNB to pay the
proceeds of the L/C. PNB countered that it cannot be held liable for a breach of contract under principles of
illegality, international comity and act of state, and thus it is excused from payment of the L/C.
Philguarantee intervened in said action, raising the same issues and arguments it had earlier raised in the
action before the Santa Clara Superior Court, alleging that PNB was excused from making payments on the
L/C since the settlement was void due to illegality, duress and fraud. 9
The Federal Court rendered judgment ruling: (1) in favor of PNB excusing the said bank from making
payment on the L/C; and (2) in Chuidian's favor by denying intervenor Philguarantee's action to set aside the
settlement agreement.10
Meanwhile, on February 27, 1987, a Deed of Transfer11 was executed between then Secretary of Finance
Jaime V. Ongpin and then PNB President Edgardo B. Espiritu, to facilitate the rehabilitation of PNB, among
others, as part of the government's economic recovery program. The said Deed of Transfer provided for the
transfer to the government of certain assets of PNB in exchange for which the government would assume
certain liabilities of PNB.12 Among those liabilities which the government assumed were unused commercial
L/C's and Deferred L/C's, including SSD-005-85 listed under Dynetics, Incorporated in favor of Chuidian in
the amount of Four Million Four Hundred Thousand Dollars (US$4,400,000.00). 13
On July 30, 1987, the government filed before the Sandiganbayan Civil Case No. 0027 against the Marcos
spouses, several government officials who served under the Marcos administration, and a number of
individuals known to be cronies of the Marcoses, including Chuidian. The complaint sought the
reconveyance, reversion, accounting and restitution of all forms of wealth allegedly procured illegally and
stashed away by the defendants.
In particular, the complaint charged that Chuidian, by himself and/or in conspiracy with the Marcos spouses,
engaged in "devices, schemes and stratagems" by: (1) forming corporations for the purpose of hiding and
avoiding discovery of illegally obtained assets; (2) pillaging the coffers of government financial institutions
such as the Philguarantee; and (3) executing the court settlement between Philguarantee and Chuidian which
was grossly disadvantageous to the government and the Filipino people.
In fine, the PCGG averred that the above-stated acts of Chuidian committed in unlawful concert with the
other defendants constituted "gross abuse of official position of authority, flagrant breach of public trust and
fiduciary obligations, brazen abuse of right and power, unjust enrichment, violation of the Constitution and
laws" of the land.14
While the case was pending, on March 17, 1993, the Republic of the Philippines filed a motion for issuance
of a writ of attachment15 over the L/C, citing as grounds therefor the following:
(1) Chuidian embezzled or fraudulently misapplied the funds of ARCI acting in a fiduciary
capacity, justifying issuance of the writ under Section 1(b), Rule 57 of the Rules of Court;
 (2) The writ is justified under Section 1(d) of the same rule as Chuidian is guilty of fraud in
contracting the debt or incurring the obligation upon which the action was brought, or that he
concealed or disposed of the property that is the subject of the action;
(3) Chuidian has removed or disposed of his property with the intent of defrauding the plaintiff as
justified under Section 1(c) of Rule 57; and
(4) Chuidian is residing out of the country or one on whom summons may be served by
publication, which justifies the writ of attachment prayed for under Section 1(e) of the same rule.
The Republic also averred that should the action brought by Chuidian before the U.S. District Court of
California to compel payment of the L/C prosper, inspite of the sequestration of the said L/C, Chuidian can
ask the said foreign court to compel the PNB Los Angeles branch to pay the proceeds of the L/C.
Eventually, Philguarantee will be made to shoulder the expense resulting in further damage to the
government. Thus, there was an urgent need for the writ of attachment to place the L/C under the custody of
the Sandiganbayan so the same may be preserved as security for the satisfaction of judgment in the case
before said court.
Chuidian opposed the motion for issuance of the writ of attachment, contending that:
(1) The plaintiff's affidavit appended to the motion was in form and substance fatally defective;
(2) Section 1(b) of Rule 57 does not apply since there was no fiduciary relationship between the
plaintiff and Chuidian;
(3) While Chuidian does not admit fraud on his part, if ever there was breach of contract, such
fraud must be present at the time the contract is entered into;
(4) Chuidian has not removed or disposed of his property in the absence of any intent to defraud
plaintiff;
(5) Chuidian's absence from the country does not necessarily make him a non-resident; and
(6) Service of summons by publication cannot be used to justify the issuance of the writ since
Chuidian had already submitted to the jurisdiction of the Court by way of a motion to lift the freeze
order filed through his counsel.
On July 14, 1993, the Sandiganbayan issued a Resolution ordering the issuance of a writ of attachment
against L/C No. SSD-005-85 as security for the satisfaction of judgment.16 The Sandiganbayan's ruling was
based on its disquisition of the five points of contention raised by the parties. On the first issue, the
Sandiganbayan found that although no separate affidavit was attached to the motion, the motion itself
contained all the requisites of an affidavit, and the verification thereof is deemed a substantial compliance of
Rule 57, Section 3 of the Rules of Court.
Anent the second contention, the Sandiganbayan ruled that there was no fiduciary relationship existing
between Chuidian and the Republic, but only between Chuidian and ARCI. Since the Republic is not privy
to the fiduciary relationship between Chuidian and ARCI, it cannot invoke Section 1(b) of Rule 57.
On the third issue of fraud on the part of Chuidian in contracting the loan, or in concealing or disposing of
the subject property, the Sandiganbayan held that there was a prima facie case of fraud committed by
Chuidian, justifying the issuance of the writ of attachment. The Sandiganbayan also adopted the Republic's
position that since it was compelled to pay, through Philguarantee, the bank loans taken out by Chuidian, the
proceeds of which were fraudulently diverted, it is entitled to the issuance of the writ of attachment to
protect its rights as creditor.
Assuming that there is truth to the government's allegation that Chuidian has removed or disposed of his
property with the intent to defraud, the Sandiganbayan held that the writ of attachment is warranted,
applying Section 1(e) of Rule 57. Besides, the Rules provide for sufficient security should the owner of the
property attached suffer damage or prejudice caused by the attachment. 17
Chuidian's absence from the country was considered by the Sandiganbayan to be "the most potent insofar as
the relief being sought is concerned."18 Taking judicial notice of the admitted fact that Chuidian was residing
outside of the country, the Sandiganbayan observed that:
13
"x x x no explanation whatsoever was given by him as to his absence from the country, or as to his
homecoming plans in the future. It may be added, moreover, that he has no definite or clearcut plan to return
to the country at this juncture – given the manner by which he has submitted himself to the jurisdiction of
the court."19
Thus, the Sandiganbayan ruled that even if Chuidian is one who ordinarily resides in the Philippines, but is
temporarily living outside, he is still subject to the provisional remedy of attachment.
Accordingly, an order of attachment20 was issued by the Sandiganbayan on July 19, 1993, ordering the
Sandiganbayan Sheriff to attach PNB L/C No. SSD-005-85 for safekeeping pursuant to the Rules of Court
as security for the satisfaction of judgment in Sandiganbayan Civil Case No. 0027.
On August 11, 1997, or almost four (4) years after the issuance of the order of attachment, Chuidian filed a
motion to lift the attachment based on the following grounds:
First, he had returned to the Philippines; hence, the Sandiganbayan's "most potent ground" for the issuance
of the writ of preliminary attachment no longer existed. Since his absence in the past was the very
foundation of the Sandiganbayan's writ of preliminary attachment, his presence in the country warrants the
immediate lifting thereof.
Second, there was no evidence at all of initial fraud or subsequent concealment except for the affidavit
submitted by the PCGG Chairman citing mere "belief and information" and "not on knowledge of the facts."
Moreover, this statement is hearsay since the PCGG Chairman was not a witness to the litigated incidents,
was never presented as a witness by the Republic and thus was not subject to cross-examination.
Third, Chuidian denies that he ever disposed of his assets to defraud the Republic, and there is nothing in the
records that support the Sandiganbayan's erroneous conclusion on the matter. Fourth, Chuidian belied the
allegation that he was also a defendant in "other related criminal action," for in fact, he had "never been a
defendant in any prosecution of any sort in the Philippines." 21 Moreover, he could not have personally
appeared in any other action because he had been deprived of his right to a travel document by the
government.
Fifth, the preliminary attachment was, in the first place, unwarranted because he was not "guilty of fraud in
contracting the debt or incurring the obligation". In fact, the L/C was not a product of fraudulent
transactions, but was the result of a US Court-approved settlement. Although he was accused of employing
blackmail tactics to procure the settlement, the California Supreme Court ruled otherwise. And in relation
thereto, he cites as a sixth ground the fact that all these allegations of fraud and wrongdoing had already
been dealt with in actions before the State and Federal Courts of California. While it cannot technically be
considered as forum shopping, it is nevertheless a "form of suit multiplicity over the same issues, parties and
subject matter." 22 These foreign judgments constitute res judicata which warrant the dismissal of the case
itself.
Chuidian further contends that should the attachment be allowed to continue, he will be deprived of his
property without due process. The L/C was payment to Chuidian in exchange for the assets he turned over to
the Republic pursuant to the terms of the settlement in Case No. 575867. Said assets, however, had already
been sold by the Republic and cannot be returned to Chuidian should the government succeed in depriving
him of the proceeds of the L/C. Since said assets were disposed of without his or the Sandiganbayan's
consent, it is the Republic who is fraudulently disposing of assets.
Finally, Chuidian stressed that throughout the four (4) years that the preliminary attachment had been in
effect, the government had not set the case for hearing. Under Rule 17, Section 3, the case itself should be
dismissed for laches owing to the Republic's failure to prosecute its action for an unreasonable length of
time. Accordingly, the preliminary attachment, being only a temporary or ancillary remedy, must be lifted
and the PNB ordered to immediately pay the proceeds of the L/C to Chuidian.
Subsequently, on August 20, 1997, Chuidian filed a motion to require the Republic to deposit the L/C in an
interest bearing account.23 Annex "D"; Rollo, pp. 77-79.23 He pointed out to the Sandiganbayan that the
face amount of the L/C had, since its attachment, become fully demandable and payable. However, since the
amount is just lying dormant in the PNB, without earning any interest, he proposed that it would be to the
benefit of all if the Sandiganbayan requires PNB to deposit the full amount to a Sandiganbayan trust account
at any bank in order to earn interest while awaiting judgment of the action.
The Republic opposed Chuidian's motion to lift attachment, alleging that Chuidian's absence was not the
only ground for the attachment and, therefore, his belated appearance before the Sandiganbayan is not a
sufficient reason to lift the attachment. Moreover, allowing the foreign judgment as a basis for the lifting of
the attachment would essentially amount to an abdication of the jurisdiction of the Sandiganbayan to hear
and decide the ill gotten wealth cases lodged before it in deference to the judgment of foreign courts.
In a Resolution promulgated on November 13, 1998, the Sandiganbayan denied Chuidian's motion to lift
attachment.24
On the same day, the Sandiganbayan issued another Resolution denying Chuidian's motion to require
deposit of the attached L/C in an interest bearing account. 25
In a motion seeking a reconsideration of the first resolution, Chuidian assailed the Sandiganbayan's finding
that the issues raised in his motion to lift attachment had already been dealt with in the earlier resolution
dated July 14, 1993 granting the application for the writ of preliminary attachment based on the following
grounds:
First, Chuidian was out of the country in 1993, but is now presently residing in the country.
Second, the Sandiganbayan could not have known then that his absence was due to the non-renewal of his
passport at the instance of the PCGG. Neither was it revealed that the Republic had already disposed of
Chuidian's assets ceded to the Republic in exchange for the L/C. The foreign judgment was not an issue then
because at that time, said judgment had not yet been issued and much less final. Furthermore, the authority
of the PCGG Commissioner to subscribe as a knowledgeable witness relative to the issuance of the writ of
preliminary attachment was raised for the first time in the motion to lift the attachment. Finally, the issue of
laches could not have been raised then because it was the Republic's subsequent neglect or failure to
prosecute despite the passing of the years that gave rise to laches. 26
Chuidian also moved for a reconsideration of the Sandiganbayan resolution denying the motion to require
deposit of the L/C into an interest bearing account. He argued that contrary to the Sandiganbayan's
pronouncement, allowing the deposit would not amount to a virtual recognition of his right over the L/C, for
he is not asking for payment but simply requesting that it be deposited in an account under the control of the
Sandiganbayan. He further stressed that the Sandiganbayan abdicated its bounden duty to rule on an issue
when it found "that his motion will render nugatory the purpose of sequestration and freeze orders over the
L/C." Considering that his assets had already been sold by the Republic, he claimed that the
Sandiganbayan's refusal to exercise its fiduciary duty over attached assets will cause him irreparable injury.
Lastly, the Sandiganbayan's position that Chuidian was not the owner but a mere payee-beneficiary of the
L/C issued in his favor negates overwhelming jurisprudence on the Negotiable Instruments Law, while at
the same time obliterating his rights of ownership under the Civil Code. 27
On July 13, 1999, the Sandiganbayan gave due course to Chuidian's plea for the attached L/C to be
deposited in an interest-bearing account, on the ground that it will redound to the benefit of both parties.
The Sandiganbayan declared the national government as the principal obligor of the L/C even though the
liability remained in the books of the PNB for accounting and monitoring purposes.
The Sandiganbayan, however, denied Chuidian's motion for reconsideration of the denial of his motion to
lift attachment, agreeing in full with the government's apriorisms that:
x x x (1) it is a matter of record that the Court granted the application for writ of attachment upon grounds
other than defendant's absence in the Philippine territory. In its Resolution dated July 14, 1993, the Court
found a prima facie case of fraud committed by defendant Chuidian, and that defendant has recovered or
disposed of his property with the intent of defrauding plaintiff; (2) Chuidian's belated presence in the
Philippines cannot be invoked to secure the lifting of attachment. The rule is specific that it applies to a
party who is about to depart from the Philippines with intent to defraud his creditors. Chuidian's stay in the
country is uncertain and he may leave at will because he holds a foreign passport; and (3) Chuidian's other
14
ground, sufficiency of former PCGG Chairman Gunigundo's verification of the complaint, has been met
fairly and squarely in the Resolution of July 14, 1993. 28
Hence, the instant petition for certiorari contending that the respondent Sandiganbayan committed grave
abuse of discretion amounting to lack or excess of jurisdiction when it ruled that:
1) Most of the issues raised in the motion to lift attachment had been substantially addressed in the
previous resolutions dated July 14, 1993 and August 26, 1998, while the rest were of no imperative
relevance as to affect the Sandiganbayan's disposition; and
2) PNB was relieved of the obligation to pay on its own L/C by virtue of Presidential Proclamation
No. 50.
The Rules of Court specifically provide for the remedies of a defendant whose property or asset has been
attached. As has been consistently ruled by this Court, the determination of the existence of grounds to
discharge a writ of attachment rests in the sound discretion of the lower courts. 29
The question in this case is: What can the herein petitioner do to quash the attachment of the L/C? There are
two courses of action available to the petitioner:
First. To file a counterbond in accordance with Rule 57, Section 12, which provides:
SEC. 12. Discharge of attachment upon giving counterbond. – At anytime after an order of attachment has
been granted, the party whose property has been attached, or the person appearing on his behalf, may, upon
reasonable notice to the applicant, apply to the judge who granted the order, or to the judge of the court in
which the action is pending, for an order discharging the attachment wholly or in part on the security given.
The judge shall, after hearing, order the discharge of the attachment if a cash deposit is made, or a
counterbond executed to the attaching creditor is filed, on behalf of the adverse party, with the clerk or judge
of the court where the application is made, in an amount equal to the value of the property attached as
determined by the judge, to secure the payment of any judgment that the attaching creditor may recover in
the action. Upon the filing of such counter-bond, copy thereof shall forthwith be served on the attaching
creditor or his lawyer. Upon the discharge of an attachment in accordance with the provisions of this section
the property attached, or the proceeds of any sale thereof, shall be delivered to the party making the deposit
or giving the counter-bond, or the person appearing on his behalf, the deposit or counter-bond aforesaid
standing in place of the property so released. Should such counterbond for any reason be found to be, or
become, insufficient, and the party furnishing the same fail to file an additional counter-bond, the attaching
creditor may apply for a new order of attachment.1âwphi1.nêt
or
Second. To quash the attachment on the ground that it was irregularly or improvidently issued, as provided
for in Section 13 of the same Rule:
SEC. 13. Discharge of attachment for improper or irregular issuance. - The party whose property has been
attached may also, at any time either before or after the release of the attached property, or before any
attachment shall have been actually levied, upon reasonable notice to the attaching creditor, apply to the
judge who granted the order, or to the judge of the court in which the action is pending, for an order to
discharge the attachment on the ground that the same was improperly or irregularly issued. If the motion be
made on affidavits on the part of the party whose property has been attached, but not otherwise, the
attaching creditor may oppose the same by counter-affidavits or other evidence in addition to that on which
the attachment was made. After hearing, the judge shall order the discharge of the attachment if it appears
that it was improperly or irregularly issued and the defect is not cured forthwith.
It would appear that petitioner chose the latter because the grounds he raised assail the propriety of the
issuance of the writ of attachment. By his own admission, however, he repeatedly acknowledged that his
justifications to warrant the lifting of the attachment are facts or events that came to light or took place after
the writ of attachment had already been implemented.
More particularly, petitioner emphasized that four (4) years after the writ was issued, he had returned to the
Philippines. Yet while he noted that he would have returned earlier but for the cancellation of his passport
by the PCGG, he was not barred from returning to the Philippines. Then he informed the Sandiganbayan that
while the case against him was pending, but after the attachment had already been executed, the government
lost two (2) cases for fraud lodged against him before the U.S. Courts, thus invoking res judicata. Next, he
also pointed out that the government is estopped from pursuing the case against him for failing to prosecute
for the number of years that it had been pending litigation.
It is clear that these grounds have nothing to do with the issuance of the writ of attachment. Much less do
they attack the issuance of the writ at that time as improper or irregular. And yet, the rule contemplates that
the defect must be in the very issuance of the attachment writ. For instance, the attachment may be
discharged under Section 13 of Rule 57 when it is proven that the allegations of the complaint were
deceptively framed,30 or when the complaint fails to state a cause of action.31 Supervening events which may
or may not justify the discharge of the writ are not within the purview of this particular rule.
In the instant case, there is no showing that the issuance of the writ of attachment was attended by
impropriety or irregularity. Apart from seeking a reconsideration of the resolution granting the application
for the writ, petitioner no longer questioned the writ itself. For four (4) long years he kept silent and did not
exercise any of the remedies available to a defendant whose property or asset has been attached. It is rather
too late in the day for petitioner to question the propriety of the issuance of the writ.
Petitioner also makes capital of the two foreign judgments which he claims warrant the application of the
principle of res judicata. The first judgment, in Civil Case Nos. 575867 and 577697 brought by
Philguarantee before the Santa Clara Country Superior Court, denied Philguarantee's prayer to set aside the
stipulated judgment wherein Philguarantee and Chuidian agreed on the subject attached L/C. On March 14,
1990, the Court of Appeal of the State of California affirmed the Superior Court's judgment. The said
judgment became the subject of a petition for review by the California Supreme Court. There is no showing,
however, of any final judgment by the California Supreme Court. The records, including petitioner's
pleadings, are bereft of any evidence to show that there is a final foreign judgment which the Philippine
courts must defer to. Hence, res judicata finds no application in this instance because it is a requisite that the
former judgment or order must be final.32
Second, petitioner cites the judgment of the United States District Court in Civil Case 86-2255 RSWL
brought by petitioner Chuidian against PNB to compel the latter to pay the L/C. The said Court's judgment,
while it ruled in favor of petitioner on the matter of Philguarantee's action-in-intervention to set aside the
settlement agreement, also ruled in favor of PNB, to wit:
Under Executive Order No. 1, the PCGG is vested by the Philippine President with the power to enforce its
directives and orders by contempt proceedings. Under Executive Order No. 2, the PCGG is empowered to
freeze any, and all assets, funds and property illegally acquired by former President Marcos or his close
friends and business associates.
On March 11, 1986, PNB/Manila received an order from the PCGG ordering PNB to freeze any further
drawings on the L/C. The freeze order has remained in effect and was followed by a sequestration order
issued by the PCGG. Subsequently, Chuidian's Philippine counsel filed a series of challenges to the freeze
and sequestration orders, which challenges were unsuccessful as the orders were found valid by the
Philippine Supreme Court. The freeze and sequestration orders are presently in effect. Thus, under the
PCGG order and Executive Orders Nos. 1 and 2, performance by PNB would be illegal under Philippine
Law. Therefore PNB is excused from performance of the L/C agreement as long as the freeze and
sequestration orders remain in effect. (Underscoring ours)
xxx xxx xxx
Chuidian argues that the fact that the L/C was issued pursuant to a settlement in California, that the
negotiations for which occurred in California, and that two of the payments were made at PNB/LA, compels
the conclusion that the act of prohibiting payment of the L/C occurred in Los Angeles. However, the
majority of the evidence and Tchacoshand Sabbatino compel the opposite conclusion. The L/C was issued in
Manila, such was done at the request of a Philippine government instrumentality for the benefit of a
Philippine citizen, the L/C was to be performed in the Philippines, all significant events relating to the
issuance and implementation of the L/C occurred in the Philippines, the L/C agreement provided that the
15
L/C was to be construed according to laws of the Philippines, and the Philippine government certainly has
an interest in preventing the L/C from being remitted in that it would be the release of funds that are
potentially illgotten gains. Accordingly, the Court finds that the PCGG orders are acts of state that must be
respected by this Court, and thus PNB is excused from making payment on the L/C as long as the freeze and
sequestration orders remain in effect.33 (Underscoring ours)
Petitioner's own evidence strengthens the government's position that the L/C is under the jurisdiction of the
Philippine government and that the U.S. Courts recognize the authority of the Republic to sequester and
freeze said L/C. Hence, the foreign judgments relied upon by petitioner do not constitute a bar to the
Republic's action to recover whatever alleged ill-gotten wealth petitioner may have acquired.
Petitioner may argue, albeit belatedly, that he also raised the issue that there was no evidence of fraud on
record other than the affidavit of PCGG Chairman Gunigundo. This issue of fraud, however, touches on the
very merits of the main case which accuses petitioner of committing fraudulent acts in his dealings with the
government. Moreover, this alleged fraud was one of the grounds for the application of the writ, and the
Sandiganbayan granted said application after it found a prima facie case of fraud committed by petitioner.
In fine, fraud was not only one of the grounds for the issuance of the preliminary attachment, it was at the
same time the government's cause of action in the main case.
We have uniformly held that:
x x x when the preliminary attachment is issued upon a ground which is at the same time the applicant's
cause of action; e.g., "an action for money or property embezzled or fraudulently misapplied or converted to
his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker, agent, or clerk,
in the course of his employment as such, or by any other person in a fiduciary capacity, or for a willful
violation of duty," or "an action against a party who has been guilty of fraud in contracting the debt or
incurring the obligation upon which the action is brought," the defendant is not allowed to file a motion to
dissolve the attachment under Section 13 of Rule 57 by offering to show the falsity of the factual averments
in the plaintiff's application and affidavits on which the writ was based – and consequently that the writ
based thereon had been improperly or irregularly issued – the reason being that the hearing on such a motion
for dissolution of the writ would be tantamount to a trial of the merits of the action. In other words, the
merits of the action would be ventilated at a mere hearing of a motion, instead of at the regular
trial.34 (Underscoring ours)
Thus, this Court has time and again ruled that the merits of the action in which a writ of preliminary
attachment has been issued are not triable on a motion for dissolution of the attachment, otherwise an
applicant for the lifting of the writ could force a trial of the merits of the case on a mere motion. 35
It is not the Republic's fault that the litigation has been protracted. There is as yet no evidence of fraud on
the part of petitioner. Petitioner is only one of the twenty-three (23) defendants in the main action. As such,
the litigation would take longer than most cases. Petitioner cannot invoke this delay in the proceedings as an
excuse for not seeking the proper recourse in having the writ of attachment lifted in due time. If ever laches
set in, it was petitioner, not the government, who failed to take action within a reasonable time period.
Challenging the issuance of the writ of attachment four (4) years after its implementation showed
petitioner's apparent indifference towards the proceedings before the Sandiganbayan.
In sum, petitioner has failed to convince this Court that the Sandiganbayan gravely abused its discretion in a
whimsical, capricious and arbitrary manner. There are no compelling reasons to warrant the immediate
lifting of the attachment even as the main case is still pending. On the other hand, allowing the discharge of
the attachment at this stage of the proceedings would put in jeopardy the right of the attaching party to
realize upon the relief sought and expected to be granted in the main or principal action. It would have the
effect of prejudging the main case.
The attachment is a mere provisional remedy to ensure the safety and preservation of the thing attached until
the plaintiff can, by appropriate proceedings, obtain a judgment and have such property applied to its
satisfaction.36 To discharge the attachment at this stage of the proceedings would render inutile any
favorable judgment should the government prevail in the principal action against petitioner. Thus, the
Sandiganbayan, in issuing the questioned resolutions, which are interlocutory in nature, committed no grave substitution of debtor requires his consent. The Sandiganbayan thus erred in relieving PNB of its liability as
abuse of discretion amounting to lack or excess of jurisdiction. As long as the Sandiganbayan acted within the original debtor.
its jurisdiction, any alleged errors committed in the exercise of its jurisdiction will amount to nothing more WHEREFORE, in view of all the foregoing, the petition is DISMISSED. The Resolutions of the
than errors of judgment which are reviewable by timely appeal and not by special civil action of certiorari. 37 Sandiganbayan dated November 6, 1998 and July 2, 1999 are AFFIRMED. The PNB is DIRECTED to
Moreover, we have held that when the writ of attachment is issued upon a ground which is at the same time remit to the Sandiganbayan the proceeds of Letter of Credit No. SFD-005-85 in the amount of U.S. $4.4
the applicant's cause of action, the only other way the writ can be lifted or dissolved is by a counterbond, in million within fifteen (15) days from notice hereof, the same to be placed under special time deposit with the
accordance with Section 12 of the same rule.38 This recourse, however, was not availed of by petitioner, as Land Bank of the Philippines, for the account of Sandiganbayan in escrow for the person or persons, natural
noted by the Solicitor General in his comment.39 or juridical, who shall eventually be adjudged lawfully entitled thereto, the same to earn interest at the
To reiterate, there are only two ways of quashing a writ of attachment: (a) by filing a counterbond current legal bank rates. The principal and its interest shall remain in said account until ordered released by
immediately; or (b) by moving to quash on the ground of improper and irregular issuance. 40 These grounds the Court in accordance with law.1âwphi1.nêt
for the dissolution of an attachment are fixed in Rule 57 of the Rules of Court and the power of the Court to No costs.
dissolve an attachment is circumscribed by the grounds specified therein. 41 Petitioner's motion to lift SO ORDERED.
attachment failed to demonstrate any infirmity or defect in the issuance of the writ of attachment; neither did
he file a counterbond.
Finally, we come to the matter of depositing the Letter of Credit in an interest-bearing account. We agree
with the Sandiganbayan that any interest that the proceeds of the L/C may earn while the case is being
litigated would redound to the benefit of whichever party will prevail, the Philippine government included.
Thus, we affirm the Sandiganbayan's ruling that the proceeds of the L/C should be deposited in an interest
bearing account with the Land Bank of the Philippines for the account of the Sandiganbayan in escrow until
ordered released by the said Court.
We find no legal reason, however, to release the PNB from any liability thereunder. The Deed of Transfer,
whereby certain liabilities of PNB were transferred to the national government, cannot affect the said L/C
since there was no valid substitution of debtor. Article 1293 of the New Civil Code provides:
Novation which consists in substituting a new debtor in the place of the original one, may be made without
the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the
new debtor gives him the rights mentioned in Articles 1236 and 1237.
Accordingly, any substitution of debtor must be with the consent of the creditor, whose consent thereto
cannot just be presumed. Even though Presidential Proclamation No. 50 can be considered an "insuperable
cause", it does not necessarily make the contracts and obligations affected thereby exceptions to the above-
quoted law, such that the substitution of debtor can be validly made even without the consent of the creditor.
Presidential Proclamation No. 50 was not intended to set aside laws that govern the very lifeblood of the
nation's commerce and economy. In fact, the Deed of Transfer that was executed between PNB and the
government pursuant to the said Presidential Proclamation specifically stated that it shall be deemed
effective only upon compliance with several conditions, one of which requires that:
(b) the BANK shall have secured such governmental and creditors' approvals as may be necessary to
establish the consummation, legality and enforceability of the transactions contemplated hereby."
The validity of this Deed of Transfer is not disputed. Thus, PNB is estopped from denying its liability
thereunder considering that neither the PNB nor the government bothered to secure petitioner's consent to
the substitution of debtors. We are not unmindful that any effort to secure petitioner's consent at that time
would, in effect, be deemed an admission that the L/C is valid and binding. Even the Sandiganbayan found
that: 36 Sta. Ines Melale Forest Products Corp. v. Macaraig, Jr., 299 SCRA 491, 515 (1998).
x x x Movant has basis in pointing out that inasmuch as the L/C was issued in his favor, he is presumed to
be the lawful payee-beneficiary of the L/C until such time that the plaintiff successfully proves that said L/C
is ill-gotten and he has no right over the same.42
In Republic v. Sandiganbayan,43 we held that the provisional remedies, such as freeze orders and
sequestration, were not "meant to deprive the owner or possessor of his title or any right to the property
sequestered, frozen or taken over and vest it in the sequestering agency, the Government or other person."
Thus, until such time that the government is able to successfully prove that petitioner has no right to claim
the proceeds of the L/C, he is deemed to be the lawful payee-beneficiary of said L/C, for which any

16
THIRD DIVISION
G.R. No. 203530, April 13, 2015
LUZON DEVELOPMENT BANK, TOMAS CLEMENTE, JR., AND OSCAR
RAMIREZ, Petitioners, v.ERLINDA KRISHNAN, Respondent.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure praying for
the annulment of the Decision1 dated March 27, 2012 and Resolution2 dated September 11, 2012 of the
Court of Appeals (CA) in CA-G.R. SP No. 120664, which affirmed the Orders dated September 24, 2010
and May 26, 2011, respectively, of Branch 30, Regional Trial Court (RTC) - Manila.
The factual antecedents, as found by the CA, are as follows:chanroblesvirtuallawlibrary
Petitioners Luzon Development Bank, Tomas Clemente, and Oscar Ramirez (hereafter petitioners) are the
respondents in the complaint for Collection of Sum of Money and Damages filed by respondent Erlinda
Khrishnan (hereafter respondent Erlinda) on February 7, 2001. Respondent Erlinda claimed that she is a
client of respondent bank wherein she maintained several accounts including time deposits. On several
occasions, when respondent Erlinda presented her Time Deposits Certificates amounting to P28,597,472.70
for payment because they have become due, petitioners refused to honor them for the reason that they were
fraudulent. Respondent Erlinda likewise applied for a Preliminary Writ of Attachment which the RTC
granted on February 27, 2001.
By virtue of the writ, petitioner bank's accounts in BPI Family Bank, Calamba, Laguna in the amount of
P28,597,472.70 and its account amounting to P49,000,000.00 in the Central Bank were garnished.
On March 9, 2001, petitioners filed an urgent ex-parte Motion to Recall Quash and/or Lift Attachment or
Garnishment (in excess of amounts in the writ). Respondent Erlinda opposed the motion.
On August 15, 2001, petitioners filed an Omnibus Motion seeking the substitution of their garnished account
with government securities and the immediate resolution of their motion to discharge attachment and setting
the motion for hearing, which respondent Erlinda opposed.
On May 22, 2002, the RTC resolved the pending incidents and required the petitioners to justify their
motion to discharge the attachment. During pre-trial on May 23, 2002, respondents requested additional time
to file a supplemental motion to justify their earlier motions which was granted and gave petitioners ten (10)
days from receipt within which to comment or opposed (sic) it.
On September 8, 2003, the RTC issued an order lifting the attachment to which respondent Erlinda filed a
motion for reconsideration. Respondent Erlinda also filed a Motion for Inhibition. On December 18, 2003,
the RTC denied the motion for reconsideration but granted the motion for inhibition. The said Order was
questioned by respondent Erlinda by way of Petition for Certiorari before the 7th Division which rendered a
decision on November 15, 2006, the dispositive portion of which reads as
follows:chanroblesvirtuallawlibrary
"WHEREFORE, the PETITION FOR CERTIORARI is GRANTED.
THE ORDERS dated September 8, 2003, and December 18, 2003 are NULLIFIED and SET ASIDE.
The private respondents, as defendants in Civil Case No. 01-100046 entitled Erlinda C. Krishnan v. Luzon
Development Bank, et al., are ORDERED to file a counterbond in accordance with Sec. 12, Rule 57,
1997 Rules of Civil Procedure, within 10 days from the finality of this decision; otherwise, the REGIONAL
17
TRIAL COURT, BRANCH 36, in Manila shall immediately reinstate the writ of attachment issued and
implemented in Civil Case No. 01-100046.
Costs of suit to be paid by the respondents. SO ORDERED.
Petitioners' subsequent motion for reconsideration was denied. Thereafter, their petition and motion for
reconsideration before the Supreme Court were likewise denied.
On May 09, 2008, respondent judge issued an Order directing respondent Erlinda to file a new attachment
bond in the amount of P35,000,000.00 and petitioners to file a counterbond within ten days from notice of
the filing and approval of the bond of respondent Erlinda. Petitioners moved for the reconsideration of the
said Order which respondent judge denied and granted a period of fifteen days for respondent Erlinda to file
an attachment bond.
Respondent Erlinda filed her attachment bond on June 25, 2009 in the amount of P35,000,000.00 through
Visayan Surety and Insurance Corporation which was approved by respondent on July 7, 2009.
Meanwhile, on July 3, 2009, petitioners filed an Omnibus Motion praying that a hearing be held to
determine the sufficiency of the attachment bond and they be allowed to deposit Certificates of Title of real
property, and the issuance of the writ of attachment be held in abeyance.
On July 20, 2009, petitioners filed a motion for extension of time to comply and/or file the appropriate
pleading and to hold in abeyance the reinstatement of the writ of attachment.
On January 28, 2010, petitioners filed a motion to admit bank property in lieu of counterbond which was
opposed by respondent Erlinda.
On September 24, 2010, respondent judge denied petitioners' motion in the assailed Order. Their subsequent
motion for reconsideration was denied on May 26, 2011.
On June 27, 2011, respondent judge issued an Order reinstating the Writ of Attachment dated March 1, 2001
for failure of petitioners to file the required counterbond. Respondent judge also issued an amended
Reinstated Writ of Attachment directing respondent Sheriff Oscar L. Rojas (hereafter respondent Sheriff) to
attach the real estate or personal properties of petitioners in the amount of P28,597,472.70. On June 30,
2011, the sheriff served the Notice of Garnishment and the Amended Reinstated Writ of Attachment.
On July 4, 2011, petitioners filed an urgent motion to recall, suspend or hold in abeyance and re-
examination of the amended reinstated writ of preliminary attachment of June 27, 2011 which was opposed
by respondent Erlinda.
On July 19, 2011, respondent Sheriff issued a Sheriffs Partial Report. Thereafter, petitioners filed this
petition for certiorari x x x.
In a Decision dated March 27, 2012, the CA dismissed petitioners' certiorari petition and affirmed the
Orders of the RTC reinstating the Writ of Attachment for failure of petitioners to file the required counter-
bond. The CA ruled that the RTC judge committed no grave abuse of discretion in denying petitioners'
motion to admit bank property in lieu of counter-bond, thus, it held:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the petition is DISMISSED and accordingly, DENIED DUE
COURSE. The Orders dated September 24, 2010 and May 26, 2011 are hereby AFFIRMED.
SO ORDERED.3cralawlawlibrary
Petitioners filed a motion for reconsideration against said decision, but the same was denied in a Resolution
dated September 11, 2012.
Hence, petitioners filed this present petition raising the following grounds:chanroblesvirtuallawlibrary
IN THE FIRST ASSAILED ORDER THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE
ABUSE OF DISCRETION WHEN IT MISCONSTRUED AND FAILED TO RULE ON THE CORRECT
LEGAL ISSUE PRESENTED IN THE PETITION FOR CERTIORARI.4
Apropos, the trial court aptly ruled that while it is true that the word deposit cannot only be confined or
construed to refer to cash, a broader interpretation thereof is not justified in the present case for the reason
that a party seeking a stay of the attachment under Section 5 is required to make a deposit in an amount
equal to the bond fixed by the court in the order of attachment or to the value of the property to be attached.
The proximate relation of the word "deposit" and "amount" is unmistakable in Section 5 of Rule 57. Plainly,
in construing said words, it can be safely concluded that Section 5 requires the deposit of money as the word
"amount" commonly refers to or is regularly associated with a sum of money.

IN THE SECOND ASSAILED ORDER THE FIONORABLE COURT OF APPEALS AGAIN ACTED
WITH GRAVE ABUSE OF DISCRETION WHEN IT FAILED TO PRESENT ANY LEGAL BASIS FOR
STATING THAT RULE 39 OF THE REVISED RULES OF COURT DOES NOT
APPLY.5cralawlawlibrary
Simply stated, the issue for our resolution is whether the CA erred in affirming the RTC's decision which
denied petitioners' motion praying that bank property be deposited in lieu of cash or a counter-bond.
In their petition, petitioners contend that it has the option to deposit real property, in lieu of cash or a
counter-bond, to secure any contingent lien on its property in the event respondent wins the case. They argue
that Section 2 of Rule 57 only mentions the term "deposit," thus, it cannot only be confined or construed to
refer to cash.
In Alcazar v. Arante,8 we held that in construing words and phrases used in a statute, the general rule is that,
in the absence of legislative intent to the contrary, they should be given their plain, ordinary and common
usage meaning. The words should be read and considered in their natural, ordinary, commonly-accepted and
most obvious signification, according to good and approved usage and without resorting to forced or subtle
construction. Words are presumed to have been employed by the lawmaker in their ordinary and common
use and acceptation.9 Thus, petitioners should not give a special or technical interpretation to a word which
is otherwise construed in its ordinary sense by the law and broaden the signification of the term "deposit" to
include that of real properties.cralawred
WHEREFORE, premises considered, the instant petition is DENIED. The Decision dated March 27, 2012
and Resolution dated September 11, 2012 of the Court of Appeals are hereby AFFIRMED.

We rule in the negative. SO ORDERED.chanroblesvirtuallawlibrary

Section 2, Rule 57 of the Rules of Court explicitly states that "[a]n order of attachment may be issued
either ex parte or upon motion with notice and hearing by the court in which the action is pending, or by the
Court of Appeals or the Supreme Court, and must require the sheriff of the court to attach so much of the
property in the Philippines of the party against whom it is issued, not exempt from execution, as may be
sufficient to satisfy the applicant's demand, unless such party makes deposit or gives a bond as
hereinafter provided in an amount equal to that fixed in the order, which may be the amount sufficient
to satisfy the applicant's demand or the value of the property to be attached as stated by the applicant,
exclusive of costs."

Section 5 of the same Rule likewise states that "[t]he sheriff enforcing the writ shall without delay and with
all reasonable diligence attach, to await judgment and execution in the action, only so much of the property
in the Philippines of the party against whom the writ is issued, not exempt from execution, as may be
sufficient to satisfy the applicant's demand, unless the former makes a deposit with the court from which
the writ is issued, or gives a counter-bond executed to the applicant, in an amount equal to the bond
fixed by the court in the order of attachment or to the value of the property to be attached, exclusive
of costs."

From the foregoing, it is evidently clear that once the writ of attachment has been issued, the only remedy of
the petitioners in lifting the same is through a cash deposit or the filing of the counter-bond. Thus, the Court
holds that petitioner's argument that it has the option to deposit real property instead of depositing cash or
filing a counter-bond to discharge the attachment or stay the implementation thereof is unmeritorious.

In fact, in Security Pacific Assurance Corporation v. Tria-Infante,6 we held that one of the ways to secure
the discharge of an attachment is for the party whose property has been attached or a person appearing on
his behalf, to post a counterbond or make the requisite cash deposit in an amount equal to that fixed by the
court in the order of attachment.7

18
FIRST DIVISION
G.R. No. 203240, March 18, 2015
NORTHERN ISLANDS, CO., INC., Petitioner, v. SPOUSES DENNIS AND CHERYLIN* GARCIA,
DOING BUSINESS UNDER THE NAME AND STYLE “ECOLAMP MULTI
RESOURCES,”, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated January 19, 2012 and the
Resolution3 dated August 24, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 97448, ordering the
Regional Trial Court of Quezon City, Branch 215 (RTC) to appoint a commissioner to determine the value
of the attached properties of respondents Spouses Dennis and Cherylin Garcia (respondents), and to
discharge any excessive attachment found thereby.
The Facts
On September 23, 2005, petitioner Northern Islands Co., Inc. (petitioner) filed a Complaint4 with application
for a writ of preliminary attachment, before the RTC against respondents, docketed as Civil Case No. Q-05-
53699 (Main Case), which was subsequently amended 5 on October 25, 2005.6 It alleged that: (a) from
March to July 2004, petitioner caused the delivery to respondents of various appliances in the aggregate
amount of P8,040,825.17;7 (b) the goods were transported, shipped, and delivered by Sulpicio Lines, Inc.,
and were accepted in good order and condition by respondents’ representatives;8 (c) the parties agreed that
the goods delivered were payable within 120 days, and that the unpaid amounts would earn interest at a rate
of eighteen percent (18%) per annum;9 (d) however, the value of the goods were not paid by respondents
despite repeated demands;10 and (e) respondents fraudulently asserted that petitioner had no proof that they
had indeed received the quantity of the subject goods. 11
In connection with the application for a writ of preliminary attachment, petitioner posted a bond, through
Visayan Surety and Insurance Corporation, in the amount of ?8,040,825.17. On November 7, 2005, the
RTC issued the writ sought for.12
Instead of filing an answer, respondents filed on November 11, 2001, an Urgent Motion for Extension of
Time to File Proper Pleading and Motion for Discovery (Production and Inspection) 13 (November 11, 2001
Motion), asking the RTC to allow them to photocopy and personally examine the original invoices, delivery
cargo receipts, and bills of lading attached to the Amended Complaint, claiming that they could not “come
up with an intelligent answer” without being presented with the originals of such documents. 14
Thereafter, or on January 11, 2006, respondents filed a Motion to Discharge Excess Attachment,15alleging
that the attachment previously ordered by the RTC exceeded by P9,232,564.56 given that the estimated
value of the attached properties, including the garnished bank accounts, as assessed by their appraiser,
Gaudioso W. Lapaz (Lapaz), amounted to P17,273,409.73, while the attachment bond is only in the amount
of P8,040,825.17.16
In an Order17 dated February 28, 2006, the RTC denied the November 11, 2001 Motion, and, instead,
directed respondents to file their answer, which the latter complied with through the filing of their
Answer Ad Cautelam Ex Abudante with Compulsory Counterclaim18 on April 3, 2006. Despite this,
respondents again filed a Motion for Leave of Court to File Motion for Discovery (Production and
Inspection)19 (Motion for Discovery) on April 7, 2006.20
The RTC Ruling
In an Order21 dated June 21, 2006, the RTC, among others, denied the Motion to Discharge Excess
19
Attachment, finding that the appraisal made by Lapaz was not reflective of the true valuation of the
properties, adding too that the bond posted by petitioner stands as sufficient security for whatever damages
respondents may sustain by reason of the attachment. 22
On the other hand, the RTC granted the Motion for Discovery in accordance with Rule 27 of the Rules of
Court, despite petitioner’s claim that it did not have the originals of the documents being sought. 23
However, no production or inspection was conducted on July 10, 2006 as the RTC directed since
respondents received the copy of the above order only on July 11, 2006.24
On July 25, 2006, respondents filed a Motion for Partial Reconsideration of the Order dated June 21, 2006,
specifically assailing the denial of their Motion to Discharge Excess Attachment. In this relation, they
prayed that the RTC refer to a commissioner, pursuant to Rule 32 of the Rules of Court, the factual
determination of the total aggregate amount of respondents’ attached properties so as to ascertain if the
attachment was excessive. Also, they prayed that the order for production and inspection be modified and
that petitioner be ordered to produce the original documents anew for their inspection and copying. 25
The foregoing motion was, however, denied by the RTC in an Order 26 dated August 23, 2006 for lack of
merit. Thus, respondents elevated the matter to the CA via petition for certiorari and mandamus,27docketed
as CA-G.R. SP No. 97448 (Certiorari Case).
In the interim, the RTC rendered a Decision28 dated September 21, 2011 in the Main Case. Essentially, it
dismissed petitioner’s Amended Complaint due to the absence of any evidence to prove that respondents had
agreed to the pricing of the subject goods.29
The RTC’s September 21, 2011 Decision was later appealed 30 by petitioner before the CA on October 27,
2011. Finding that the Notice of Appeal was seasonably filed, with the payment of the appropriate docket
fees, the RTC, in an Order31 dated January 25, 2012, ordered the elevation of the entire records of the Main
Case to the CA. The appeal was then raffled to the CA’s Eighth Division, and docketed as CA-G.R. CV No.
98237. On the other hand, records do not show that respondents filed any appeal. 32
The CA Ruling in the Certiorari Case
Meanwhile, the CA, in a Decision33 dated January 19, 2012, partly granted the certiorari petition of
respondents, ordering the RTC to appoint a commissioner as provided under Rule 32 of the Rules of Court
as well as the subsequent discharge of any excess attachment if so found therein, and, on the other hand,
denying respondents’ Motion for Discovery.34
It held that: (a) on the issue of attachment, trial by commissioners under Rule 32 of the Rules of Court was
proper so that the parties may finally settle their conflicting valuations; 35 and (b) on the matter of discovery,
petitioner could not be compelled to produce the originals sought by respondents for inspection since they
were not in the former’s possession.36
Aggrieved, petitioner filed a Motion for Partial Reconsideration 37 on February 13, 2012 but was, however,
denied in a Resolution38 dated August 24, 2012, hence, the present petition.
The Issues Before the Court
The issues presented for the Court’s resolution are: (a) whether the RTC had lost jurisdiction over the matter
of the preliminary attachment after petitioner appealed the decision in the Main Case, and thereafter ordered
the transmittal of the records to the CA; and (b) whether the CA erred in ordering the appointment of a
commissioner and the subsequent discharge of any excess attachment found by said commissioner.
The Court’s Ruling

The petition is meritorious.

Section 9, Rule 41 of the Rules of Court provides that in appeals by notice of appeal, the court loses
jurisdiction over the case upon the perfection of the appeals filed in due time and the expiration of the
time to appeal of the other parties.

In this case, petitioner had duly perfected its appeal of the RTC’s September 21, 2011 Decision resolving
the Main Case through the timely filing of its Notice of Appeal dated October 27, 2011, together with the
payment of the appropriate docket fees. The RTC, in an Order39 dated January 25, 2012, had actually
confirmed this fact, and thereby ordered the elevation of the entire records to the CA. Meanwhile, records do
not show that respondents filed any appeal, resulting in the lapse of its own period to appeal therefrom.
Thus, based on Section 9, Rule 41, it cannot be seriously doubted that the RTC had already lost jurisdiction
over the Main Case.

With the RTC’s loss of jurisdiction over the Main Case necessarily comes its loss of jurisdiction over all
matters merely ancillary thereto. Thus, the propriety of conducting a trial by commissioners in order to
determine the excessiveness of the subject preliminary attachment, being a mere ancillary matter to the Main
Case, is now mooted by its supervening appeal in CA-G.R. CV No. 98237.

Note that in Sps. Olib v. Judge Pastoral,40 the Court, in view of the nature of a preliminary attachment,
definitively ruled that the attachment itself cannot be the subject of a separate action independent of the
principal action because the attachment was only an incident of such action, viz.:
Attachment is defined as a provisional remedy by which the property of an adverse party is taken into legal
custody, either at the commencement of an action or at any time thereafter, as a security for the satisfaction
of any judgment that may be recovered by the plaintiff or any proper party.

It is an auxiliary remedy and cannot have an independent existence apart from the main suit or claim
instituted by the plaintiff against the defendant. Being merely ancillary to a principal proceeding, the
attachment must fail if the suit itself cannot be maintained as the purpose of the writ can no longer be
justified.

The consequence is that where the main action is appealed, the attachment which may have been issued as
an incident of that action, is also considered appealed and so also removed from the jurisdiction of the
court a quo. The attachment itself cannot be the subject of a separate action independent of the
principal action because the attachment was only an incident of such action.41 (Emphases supplied)

That being said, it is now unnecessary to discuss the other issues raised herein. In fine, the petition is granted
and the assailed CA rulings are set aside.

WHEREFORE, the petition is GRANTED. The Decision dated January 19, 2012 and the Resolution dated
August 24, 2012 of the Court of Appeals in CA-G.R. SP No. 97448 are hereby SET ASIDE.

SO ORDERED.

20
SECOND DIVISION
G.R. No. 212025, July 01, 2015
EXCELLENT QUALITY APPAREL, INC., Petitioner, v. VISAYAN SURETY & INSURANCE
CORPORATION, AND FAR EASTERN SURETY & INSURANCE CO., INC., Respondents.
DECISION
MENDOZA, J.:
The present case involves the wrongful attachment and release of the petitioner's funds to the adverse party
and its plight to recover the same. It seems that when misfortune poured down from the skies, the petitioner
received a handful. The scales of justice, however, do not tilt based on chance; rather on the proper
application of law, jurisprudence and justice.
This is a petition for review on certiorari seeking to reverse and set aside the October 21, 2013 Decision 1and
the April 1, 2014 Resolution2 of the Court of Appeals (CA), in CA-G.R. CV No. 95421, which affirmed the
January 15, 20103 and May 19, 20104 Orders of the Regional Trial Court of Manila, Branch 32 (RTC), in
Civil Case No. 04-108940.
The Facts
On March 26, 1996, petitioner Excellent Quality Apparel, Inc. (petitioner), then represented by Max L.F.
Ying (Ying), Vice-President for Productions, and Alfiero R. Orden, Treasurer, entered into a contract with
Multi-Rich Builders (Multi-Rich), a single proprietorship, represented by Wilson G. Chua, its President and
General Manager, for the construction of a garment factory within the Cavite Philippine Economic Zone
Authority (CPEZA). The duration of the project was for a maximum period of five (5) months or 150
consecutive calendar days. Included in the contract was an Arbitration Clause in case of dispute.
On November 27, 1996, the construction of the factory building was completed.
On February 20, 1997, Win Multi-Rich Builders, Inc. (Win Multi-Rich) was incorporated with the Securities
and Exchange Commission (SEC).
On January 26, 2004, Win Multi-Rich filed a complaint for sum of money and damages against petitioner
and Ying before the RTC.5 It also prayed for the issuance of a writ of attachment, claiming that Ying was
about to abscond and that petitioner had an impending closure.
Win Multi-Rich then secured the necessary bond in the amount of P8,634,448.20 from respondent Visayan
Surety and Insurance Corporation (Visayan Surety)6 In the Order,7 dated February 2, 2004, the RTC issued a
writ of preliminary attachment in favor of Win Multi-Rich.
To prevent the enforcement of the writ of preliminary attachment on its equipment and machinery, petitioner
issued Equitable PCI Bank Check No. 160149, 8 dated February 16, 2004, in the amount of P8,634,448.20
payable to the Clerk of Court of the RTC.
On February 19, 2004, petitioner filed its Omnibus Motion,9 seeking to discharge the attachment. Petitioner
also questioned the jurisdiction of the RTC due to the presence of the Arbitration Clause in the contract. It
asserted that the case should have been referred first to the Construction Industry Arbitration Commission
(CIAC) pursuant to Executive Order (E.O.) No. 1008.
The motion, however, was denied by the RTC in its Order, 10 dated April 12, 2004, because the issues of the
case could be resolved after a fullblown trial.
21
On April 26, 2004, petitioner filed its Answer with Compulsory Counterclaim11 before the RTC. It denied
the material allegation of the complaint and sought the immediate lifting of the writ of attachment. It also
prayed that the bond filed by Win Multi-Rich to support its application for attachment be held to satisfy
petitioner's claim for damages due to the improper issuance of such writ.
On April 29, 2004, the RTC issued another order12 directing the deposit of the garnished funds of petitioner
to the cashier of the Clerk of Court of the RTC.
Win Multi-Rich then filed a motion,13 dated April 29, 2004, to release petitioner's cash deposit to it.
Notably, the motion was granted by the RTC in the Order, 14 dated May 3, 2004. Subsequently, on May 7,
2004, Win Multi-Rich posted Surety Bond No. 1019815 issued by respondent Far Eastern Surety and
Insurance Co., Inc. (FESICO) for the amount of P9,000,000.00, to secure the withdrawal of the cash
deposited by petitioner. Thus, Win Multi-Rich was able to receive the funds of petitioner even before the
trial began.
On June 18, 2004, petitioner filed a petition for certiorari16 under Rule 65 of the 1997 Rules of Civil
Procedure before the CA. The petition sought to. annul and set aside the April 12, 2004 and April 29, 2004
Orders of the RTC. Petitioner then filed its Supplemental Manifestation and Motion, 17 asserting that its cash
deposit with the RTC was turned over to Win Multi-Rich.
On March 14, 2006, the CA rendered a decision,18annulling the April 12 2004 and April 29, 2004 Orders of
the RTC. It ruled, however, that the RTC had jurisdiction over the case inspite of the arbitration clause
because it was a suit for collection of sum of money. The dispositive portion of which
reads:LawlibraryofCRAlaw
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IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby GRANTED. The Orders dated April
12, 2004 and April 29, 2004 of respondent judge are hereby ANNULLED and SET ASIDE. Accordingly,
the writ of preliminary injunction is hereby MADE PERMANENT.
SO ORDERED.19
Petitioner filed a motion for reconsideration arguing, among others, that the CA decision failed to state an
order to return the garnished amount of P8,634,448.[20], which was taken from its bank account and given
to Win Multi-Rich. In its Resolution,20 dated October 11, 2006, the CA denied the motion.
Aggrieved, petitioner elevated the matter to the Court by way of a petition for review on certiorari under
Rule 45, docketed as G.R. No. 175048.
On February 10, 2009, in G.R. No. 175048, the Court promulgated a decision21 in favor of petitioner and
held: first, that Win Multi-Rich was not a real party in interest; second, that the RTC should not have taken
cognizance of the collection suit because the presence of the arbitration clause vested jurisdiction on the
CIAC over all construction disputes between petitioner and Multi-Rich; and lastly, that Win Multi-Rich
could not retain the garnished amount, as the RTC did not have jurisdiction to issue the questioned writ of
attachment and to order the release of the funds. The dispositive portion reads:LawlibraryofCRAlaw
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WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is hereby MODIFIED.
Civil Case No. 04-108940 is DISMISSED. Win Multi-Rich Builders, Inc. is ORDERED to return the
garnished amount of EIGHT MILLION SIX HUNDRED THIRTY FOUR THOUSAND FOUR
HUNDRED FORTY-EIGHT PESOS AND TWENTY CENTAVOS (P8,634,448.20), which was turned
over by the Regional Trial Court, to petitioner with legal interest of 12 percent (12%) per annum upon
finality of this Decision until payment.
SO ORDERED.22
Win Multi-Rich filed a motion for reconsideration but it was denied by the Court in its April 20, 2009
Resolution.23 Pursuant to an entry of judgment,24 the Court's decision became final and executory on June 2,
2009.
On June 26, 2009, petitioner moved for execution thereof, praying for the return of its cash deposit and, in
the event of refusal of Win Multi-Rich to comply, to hold Visayan Surety and FESICO liable under their
respective bonds.25redarclaw
Win Multi-Rich, Visayan Surety and FESICO were served with copies of the motion for execution. 26During
the August 7, 2009 hearing on the motion for execution, counsels for petitioner, Win Multi-Rich and
FESICO were present.27 The hearing, however, was reset to September 16, 2009. On the said date, Win
Multi-Rich, Visayan Surety and FESICO were given fifteen (15) days to submit their respective comments
or oppositions to the motion for execution. 28redarclaw
On October 15, 2009, Win Multi-Rich opposed the motion for execution29 because the cash deposit awarded
to it by the RTC had been paid to suppliers and the said amount was long overdue and demandable.
The RTC granted the motion for execution in an Order, 30 dated October 19, 2009, and issued a writ of
execution.31 Visayan Surety and FESICO separately moved for reconsideration of the RTC order.
The RTC Ruling
On January 15, 2010, the RTC issued the order, 32 granting the surety respondents' motion for
reconsideration and lifting its October 19, 2009 Order insofar as it granted the motion for execution against
Visayan Surety and FESICO. The RTC absolved the surety respondents because petitioner did not file a
motion for judgment on the attachment bond before the finality of judgment, thus, violating the surety
respondents' right to due process. It further held that the execution against the surety respondents would go
beyond the terms of the judgment sought to be executed considering that the Court decision pertained to
Win Multi-Rich only.
Petitioner moved for reconsideration, but its motion was denied by the RTC in its May 19, 2010
Order.33redarclaw
Undaunted, petitioner appealed before the CA, arguing that there was no violation of the right to due process
because the liability of the surety respondents were based on the bonds issued by them.
The CA Ruling
In the assailed decision, dated October 21, 2013, the CA found petitioner's appeal without merit. Citing
Section 20, Rule 57 of the 1997 Rules of Civil Procedure (Section 20, Rule 57), the CA held that petitioner
failed to timely claim damages against the surety before the decision of the Court became final and
executory. It further stated that a court judgment could not bind persons who were not parties to the action
as the records showed that Visayan Surety and FESICO were neither impleaded nor informed of the
proceedings before the Court in G.R. No. 175048. It was the view of the CA that "[hjaving failed to observe
very elementary rules of procedure which are mandatory, [petitioner] caused its own predicament."
22
Petitioner filed a motion for reconsideration, but it was denied by the CA in the assailed April 1, 2014
Resolution.
Hence, this present petition, anchored on the following
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STATEMENT OF ISSUES
I
THE ASSAILED DECISION AND THE ASSAILED RESOLUTION OF THE COURT OF
APPEALS SHOULD BE REVERSED AND SET ASIDE FOR BEING CONTRARY TO LAW AND
JURISPRUDENCE CONSIDERING THAT THE RIGHT TO DUE PROCESS OF THE TWO
SURETY COMPANIES WILL NOT BE VIOLATED IF EXECUTION OF THE JUDGMENT
AGAINST THEM IS ALLOWED.
II
THE ASSAILED DECISION AND THE ASSAILED RESOLUTION OF THE COURT OF
APPEALS SHOULD BE REVERSED AND SET ASIDE FOR BEING CONTRARY TO LAW AND
JURISPRUDENCE CONSIDERING THAT TO ALLOW THE EXECUTION AGAINST THE TWO
SURETY COMPANIES WOULD GIVE FULL EFFECT TO THE TERMS OF THE JUDGMENT. 34
Petitioner contends that Visayan Surety and FESICO could be held liable because the Court, in G.R. No.
175048, ruled that it cannot allow Win Multi-Rich to retain the garnished amount turned over by the RTC,
which had no jurisdiction to issue the questioned writ of attachment. Petitioner argues that if Win Multi-
Rich fails or refuses to refund or return the cash deposit, then Visayan Surety and FESICO must be held
liable under their respective bonds. Also, petitioner claims that the surety bond of FESICO is not covered by
Section 20, Rule 57 because it did not pertain to the writ of attachment itself, but on the withdrawal of the
cash deposit.
On October 3, 2014, Visayan Surety filed its Comment.35 It asserted that no application for damages was
filed before the Court in G.R. No. 175048. Thus, there was no occasion to direct the RTC to hear and decide
the claim for damages, which constituted a violation of its right to due process. Also, Visayan Surety
contended that Section 20, Rule 57 provided a mandatory rule that an application for damages must be filed
before the judgment becomes final and executory.
On October 8, 2014, FESICO filed its Comment. 36 It averred that petitioner failed to comply with Section
20, Rule 57 of the Rules of Court because the hearing on the motion for execution was conducted after the
decision in G.R. No. 175048 had already become final and executory. It also stated that petitioner failed to
implead the surety respondents as parties in G.R. No. 175048.
On January 26, 2015, petitioner filed its Consolidated Reply. 37 It stressed that because the highest court of
the land had directed the return of the wrongfully garnished amount to petitioner, proceedings on the
application under Section 20, Rule 57, became no longer necessary.
The Court's Ruling
The petition is partly meritorious.
There was an application for damages; but there was no notice given to Visayan Surety
By its nature, preliminary attachment, under Rule 57 of the Rules of Court, "is an ancillary remedy applied
for not for its own sake but to enable the attaching party to realize upon relief sought and expected to be
granted in the main or principal action; it is a measure auxiliary or incidental to the main action. As such, it
is available during the pendency of the action which may be resorted to by a litigant to preserve and protect
certain rights and interests therein pending rendition and for purposes of the ultimate effects, of a final
judgment in the case.38 In addition, attachment is also availed of in order to acquire jurisdiction over the
action by actual or constructive seizure of the property in those instances where personal or substituted
service of summons on the defendant cannot be effected."39redarclaw
The party applying for the order of attachment must thereafter give a bond executed to the adverse party in
the amount fixed by the court in its order granting the issuance of the writ. 40 The purpose of an attachment
bond is to answer for all costs and damages which the adverse party may sustain by reason of the attachment
if the court finally rules that the applicant is not entitled to the writ. 41redarclaw
In this case, the attachment bond was issued by Visayan Surety in order for Win Multi-Rich to secure the
issuance of the writ of attachment. Hence, any application for damages arising from the improper, irregular
or excessive attachment shall be governed by Section 20, Rule 57, which provides:LawlibraryofCRAlaw
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Sec. 20. Claim for damages on account of improper, irregular or excessive attachment.
An application for damages on account of improper, irregular or excessive attachment must be filed before
the trial or before appeal is perfected or before the judgment becomes executory, with due notice to the
attaching party and his surety or sureties, setting forth the facts showing his right to damages and the amount
thereof. Such damages may be awarded only after proper hearing and shall be included in the judgment on
the main case.
If the judgment of the appellate court be favorable to the party against whom the attachment was issued, he
must claim damages sustained during the pendency of the appeal by filing an application in the appellate
court, with notice to the party in whose favor the attachment was issued or his surety or sureties, before the
judgment of the appellate court becomes executory. The appellate court may allow the application to be
heard and decided by the trial court.
Nothing herein contained shall prevent the party against whom the attachment was issued from recovering in
the same action the damages awarded to him from any property of the attaching party not exempt from
execution should the bond or deposit given by the latter be insufficient or fail to fully satisfy the award.
The history of Section 20, Rule 57 was discussed in Malayan Insurance, Inc. v. Salas42 In that case, the
Court explained that Section 20, Rule 57 was a revised version of Section 20, Rule 59 of the 1940 Rules of
Court, which, in turn, was a consolidation of Sections 170, 177, 223, 272, and 439 of the Code of Civil
Procedure regarding the damages recoverable in case of wrongful issuance of the writs of preliminary
injunction, attachment, mandamus and replevin and the appointment of a receiver.
Thus, the current provision of Section 20, Rule 57 of the 1997 Rules of Civil Procedure covers application
for damages against improper attachment, preliminary injunction, receivership, and replevin. 43Consequently,
jurisprudence concerning application for damages against preliminary injunction, receivership and replevin
bonds can be equally applied in the present case.
In a catena of cases,44 the Court has cited the requisites under Section 20, Rule 57 in order to claim damages
against the bond, as follows:LawlibraryofCRAlaw
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23
1. The application for damages must be filed in the same case where the bond was
issued;chanRoblesvirtualLawlibrary
2. Such application for damages must be filed before the entry of judgment; and
3. After hearing with notice to the surety.
The first and second requisites, as stated above, relate to the application for damages against the bond. An
application for damages must be filed in the same case where the bond was issued, either (a) before the trial
or (b) before the appeal is perfected or (c) before the judgment becomes executory. 45 The usual procedure is
to file an application for damages with due notice to the other party and his sureties. The other method
would be to incorporate the application in the answer with compulsory counterclaim. 46redarclaw
The purpose of requiring the application for damages to be filed in the same proceeding is to avoid the
multiplicity of suit and forum shopping. It is also required to file the application against the bond before the
finality of the decision to prevent the alteration of the immutable judgment. 47redarclaw
In Paramount Insurance Corp. v. CA,48 the Court allowed an application for damages incorporated in the
answer with compulsory counterclaim of the defendant therein. The sureties were properly notified of the
hearing and were given their day in court.
Conversely, in the recent case of Advent Capital and Finance Corp. v. Young,49 the application for damages
against the bond was not allowed. The respondent therein filed his omnibus motion claiming damages
against surety after the dismissal order issued by the trial court had attained finality.
In the present petition, the Court holds that petitioner sufficiently incorporated an application for damages
against the wrongful attachment in its answer with compulsory counterclaim filed before the RTC. Petitioner
alleged that the issuance of the improper writ of attachment caused it actual damages in the amount of at
least P3,000,000.00. It added that the Equitable PCI Bank Check No. 160149 it issued to the RTC Clerk of
Court, to lift the improper writ of attachment, should be returned to it. 50 Evidently, these allegations
constitute petitioner's application for damages arising from the wrongful attachment, and the said application
was timely filed as it was filed before the finality of judgment.
The next requisite that must be satisfied by petitioner to hold Visayan Surety liable would be that the
judgment against the wrongful attachment was promulgated after the hearing with notice to the surety.
Certainly, the surety must be given prior notice and an opportunity to be heard with respect to the
application for damages before the finality of the judgment. The Court rules that petitioner did not satisfy
this crucial element.
Section 20, Rule 57 specifically requires that the application for damages against the wrongful attachment,
whether filed before the trial court or appellate court, must be with due notice to the attaching party and his
surety or sureties. Such damages may be awarded only after proper hearing and shall be included in the
judgment on the main case.
Due notice to the adverse party and its surety setting forth the facts supporting the applicant's right to
damages and the amount thereof under the bond is indispensable. The surety should be given an opportunity
to be heard as to the reality or reasonableness of the damages resulting from the wrongful issuance of the
writ. In the absence of due notice to the surety, therefore, no judgment for damages may be entered and
executed against it.51redarclaw
In the old case of Visayan Surety and Insurance Corp. v. Pascual,52 the application for damages was made
before the finality of judgment, but the surety was not given due notice. The Court allowed such application
under Section 20, Rule 59 of the 1940 Rules of Court because there was no rule which stated that the failure
to give to the surety due notice of the application for damages would release the surety from the obligation
of the bond.53redarclaw
The case of Visayan Surety and Insurance Corp. v. Pascual, however, was abandoned in the subsequent
rulings of the Court because this was contrary to the explicit provision of Section 20, Rule 57. 54redarclaw
In People Surety and Insurance Co. v. CA,55 the defendant therein filed an application for damages during
the trial but the surety was not notified. The Court denied the application and stated that "it is now well
settled that a court has no jurisdiction to entertain any proceeding seeking to hold a surety liable upon its
bond, where the surety has not been given notice of the proceedings for damages against the principal and
the judgment holding the latter liable has already become final."56redarclaw
In Plaridel Surety & Insurance Co. v. De Los Angeles,57 a motion for execution against the bond of the
surety was filed after the finality of judgment. The petitioner therein asserted that the motion for execution
was a sufficient notification to the surety of its application for damages. The Court ruled, that "[t]his
notification, however, which was made after almost a year after the promulgation of the judgment by the
Court of Appeals, did not cure the tardiness of the claim upon the liability of the surety, which, by mandate
of the Rules, should have been included in the judgment."58redarclaw
In the present case, petitioner's answer with compulsory counterclaim, which contained the application for
damages, was not served on Visayan Surety.59 Also, a perusal of the records60 revealed that Visayan Surety
was not furnished any copies of the pleadings, motions, processes, and judgments concerned with the
application for damages against the surety bond. Visayan Surety was only notified of the application when
the motion for execution was filed by petitioner on June 29, 2009, after the judgment in G.R. No. 175048
had become final and executory on June 2, 2009.
Clearly, petitioner failed to comply with the requisites under Section 20, Rule 57 because Visayan Surety
was not given due notice on the application for damages before the finality of judgment. The subsequent
motion for execution, which sought to implicate Visayan Surety, cannot alter the immutable judgment
anymore.
FESICO's bond is not covered by Section 20, Rule 57
While Visayan Surety could not be held liable under Section 20, Rule 57, the same cannot be said of
FESICO. In the case at bench, to forestall the enforcement of the writ of preliminary attachment, petitioner
issued Equitable PCI Bank Check No. 160149, dated February 16, 2004, in the amount of P8,634,448.20
payable to the Clerk of Court of the RTC. Pursuant to the RTC Order, dated April 29, 2004, the garnished
funds of petitioner were deposited to the cashier of the Clerk of Court of the RTC. The procedure to
discharge the writ of preliminary attachment is stated in Section 12, Rule 57, to wit:LawlibraryofCRAlaw
Sec. 12. Discharge of attachment upon giving counterbond.
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After a writ of attachment has been enforced, the party whose property has been attached, or the person
appearing on his behalf, may move for the discharge of the attachment wholly or in part on the security
given. The court shall, after due notice and hearing, order the discharge of the attachment if the
movant makes a cash deposit, or files a counter-bond executed to the attaching party with the clerk of
the court where the application is made, in an amount equal to that fixed by the court in the order of
attachment, exclusive of costs. But if the attachment is sought to be discharged with respect to a particular
24
property, the counter-bond shall be equal to the value of that property as determined by the court. In either
case, the cash deposit or the counter-bond shall secure the payment of any judgment that the attaching party
may recover in the action. A notice of the deposit shall forthwith be served on the attaching party. Upon the
discharge of an attachment in accordance with the provisions of this section, the property attached, or the
proceeds of any sale thereof, shall be delivered to the party making the deposit or giving the counter-bond,
or to the person appearing on his behalf, the deposit or counter-bond aforesaid standing in place of the
property so released. Should such counter-bond for any reason to be found to be or become insufficient, and
the party furnishing the same fail to file an additional counter-bond, the attaching party may apply for a new
order of attachment.
[Emphasis Supplied]
Win Multi-Rich, however, took a step further and filed a motion to release petitioner's cash deposit to it.
Immediately, the RTC granted the motion and directed Win Multi-Rich to post a bond in favor of petitioner
in the amount of P9,000,000.00 to answer for the damages which the latter may sustain should the court
decide that Win Multi-Rich was not entitled to the relief sought. Subsequently, Win Multi-Rich filed a
surety bond of FESICO before the RTC and was able to obtain the P8,634,448.20 cash deposit of petitioner,
even before the trial commenced.
Strictly speaking, the surety bond of FESICO is not covered by any of the provisions in Rule 57 of the Rules
of Court because, in the first place, Win Multi-Rich should not have filed its motion to release the cash
deposit of petitioner and the RTC should not have granted the same. The release of the cash deposit to the
attaching party is anathema to the basic tenets of a preliminary attachment.
The chief purpose of the remedy of attachment is to secure a contingent lien on defendant's property until
plaintiff can, by appropriate proceedings, obtain a judgment and have such property applied to its
satisfaction, or to make some provision for unsecured debts in cases where the means of satisfaction thereof
are liable to be removed beyond the jurisdiction, or improperly disposed of or concealed, or otherwise
placed beyond the reach of creditors.61 The garnished funds or attached properties could only be released to
the attaching party after a judgment in his favor is obtained. Under no circumstance, whatsoever, can the
garnished funds or attached properties, under the custody of the sheriff or the clerk of court, be
released to the attaching party before the promulgation of judgment.
Cash deposits and counterbonds posted by the defendant to lift the writ of attachment is a security for the
payment of any judgment that the attaching party may obtain; they are, thus, mere replacements of the
property previously attached.62 Accordingly, the P8,634,448.20 cash deposit of petitioner, as replacement of
the properties to be attached, should never have been released to Win Multi-Rich.
Nevertheless, the Court must determine the nature of the surety bond of FESICO. The cash deposit or the
counter-bond was supposed to secure the payment of any judgment that the attaching party may recover in
the action.63 In this case, however, Win Multi-Rich was able to withdraw the cash deposit and, in exchange,
it posted a surety bond of FESICO in favor of petitioner to answer for the damages that the latter may
sustain. Corollarily, the surety bond of FESICO substituted the cash deposit of petitioner as a security for the
judgment. Thus, to claim damages from the surety bond of FESICO, Section 17, Rule 57 could be applied. It
reads:LawlibraryofCRAlaw
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Sec. 17. Recovery upon the counter-bond.
When the judgment has become executory, the surety or sureties on any counter-bond given pursuant to the
provisions of this Rule to secure the payment of the judgment shall become charged on such counter-bond
and bound to pay the judgment obligee upon demand the amount due under the judgment, which amount
may be recovered from such surety or sureties after notice and summary hearing in the same action. On a final note, the Court reminds the bench and the bar that lawsuits, unlike duels, are not to be won by a
From a reading of the above-quoted provision, it is evident that a surety on a counter-bond given to secure rapier's thrust. Technicality, when it deserts its proper office as an aid to justice and becomes its great
the payment of a judgment becomes liable for the payment of the amount due upon: (1) demand made upon hindrance and chief enemy, deserves scant consideration from courts. There should be no vested rights in
the surety; and (2) notice and summary hearing on the same action. 64 Noticeably, unlike Section 20, Rule 57, technicalities.74redarclaw
which requires notice and hearing before the finality of the judgment in an application for damages, Section
17, Rule 57 allows a party to claim damages on the surety bond after the judgment has become WHEREFORE, the petition is PARTIALLY GRANTED. The October 21, 2013 Decision and the April 1,
executory.65redarclaw 2014 Resolution of the Court of Appeals in CA-G.R. CV No. 95421 are AFFIRMED WITH
MODIFICATION. The Regional Trial Court of Manila, Branch 32 in Civil Case No. 04-108940 is hereby
The question remains, in contrast to Section 20, why does Section 17 sanction the notice and hearing to the ordered to proceed with the execution against Far Eastern Surety & Insurance Co., Inc., to the extent of the
surety after the finality of judgment? The answer lies in the kind of damages sought to be enforced against amount of the surety bond.
the bond.
SO ORDERED.cralawlawlibrary
Under Section 20, Rule 57, in relation to Section 4 therein, 66 the surety bond shall answer for all the costs
which may be adjudged to the adverse party and all damages which he may sustain by reason of the
attachment. In other words, the damages sought to be enforced against the surety bond are unliquidated.
Necessarily, a notice and hearing before the finality of judgment must be undertaken to properly determine
the amount of damages that was suffered by the defendant due to the improper attachment. These damages
to be imposed against the attaching party and his sureties are different from the principal case, and must be
included in the judgment.

On the other hand, under Section 17, Rule 57, in relation to Section 12 therein, the cash deposit or the
counter-bond shall secure the payment of any judgment that the attaching party may recover in the action.
Stated differently, the damages sought to be charged against the surety bond are liquidated. The final
judgment had already determined the amount to be awarded to the winning litigant on the main action. Thus,
there is nothing left to do but to execute the judgment against the losing party, or in case of insufficiency,
against its sureties.

Here, the Court is convinced that a demand against FESICO had been made, and that it was given due notice
and an opportunity to be heard on its defense. First, petitioner filed a motion for execution on June 29, 2009,
a copy of which was furnished to FESICO;67second, petitioner filed a manifestation,68 dated July 13, 2009,
that FESICO was duly served with the said motion and notified of the hearing on August 7, 2009; third,
during the August 7, 2009 hearing on the motion for execution, the counsels for petitioner, Win Multi-Rich
and FESICO were all present;69fourth, in an Order, dated September 16, 2009, FESICO was given fifteen
(15) days to submit its comment or opposition to the motion for execution;70 and lastly, FESICO filed its
comment71 on the motion on October 1, 2009. Based on the foregoing, the requirements under Section 17,
Rule 57 have been more than satisfied.

Indeed, FESICO cannot escape liability on its surety bond issued in favor of petitioner. The purpose of
FESICO's bond was to secure the withdrawal of the cash deposit and to answer any damages that would be
inflicted against petitioner in the course of the proceedings. 72 Also, the undertaking73 signed by FESICO
stated that the duration of the effeetivity of the bond shall be from its approval by the court until the action is
fully decided, resolved or terminated.

FESICO cannot simply escape liability by invoking that it was not a party in G.R. No. 175048. From the
moment that FESICO issued Surety Bond No. 10198 to Win Multi-Rich and the same was posted before the
RTC, the court has acquired jurisdiction over the surety, and the provisions of Sections 12 and 17 of Rule 57
became operational. Thus, the Court holds that FESICO is solidarity liable under its surety bond with its
principal Win Multi-Rich.

25
THIRD DIVISION
G.R. No. 181721, September 09, 2015
WATERCRAFT VENTURE CORPORATION, REPRESENTED BY ITS VICE-PRESIDENT,
ROSARIO E. RAÑOA, Petitioner, v. ALFRED RAYMOND WOLFE, Respondent.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse and set
aside the Court of Appeals (CA) Resolution1 dated January 24, 2008 denying the motion for reconsideration
of its Decision2 dated September 27, 2007 in CA-G.R. SP No. 97804.
The facts are as follows:chanRoblesvirtualLawlibrary
Petitioner Watercraft Venture Corporation (Watercraft) is engaged in the business of building, repairing,
storing and maintaining yachts, boats and other pleasure crafts at the Subic Bay Freeport Zone, Subic,
Zambales. In connection with its operations and maintenance of boat storage facilities, it charges a boat
storage fee of Two Hundred Seventy-Two US Dollars (US$272.00) per month with interest of 4% per
month for unpaid charges.
Sometime in June 1997, Watercraft hired respondent Alfred Raymond Wolfe (Wolfe), a British national and
resident of Subic Bay Freeport Zone, Zambales, as its Shipyard Manager.
During his empolyment, Wolfe stored the sailboat, Knotty Gull, within Watercraft1 s boat storage facilities,
but never paid for the storage fees.
On March 7, 2002, Watercraft terminated the employment of Wolfe.
Sometime in June 2002, Wolfe pulled out his sailboat from Watercraft's storage facilities after signing a
Boat Pull-Out Clearance dated June 29, 2002 where he allegedly acknowledged the outstanding obligation
of Sixteen Thousand Three Hundred and Twenty-Four and 82/100 US Dollars (US$16,324.82) representing
unpaid boat storage fees for the period of June 1997 to June 2002. Despite repeated demands, he failed to
pay the said amount.
Thus, on July 7, 2005, Watercraft filed against Wolfe a Complaint for Collection of Sum of Money with
Damages with an Application for the Issuance of a Writ of Preliminary Attachment. The case was docketed
as Civil Case No. 4534-MN, and raffled to Branch 1703 of the Regional Trial Court (RTC) of Malabon City.
In his Answer, Wolfe claimed he was hired as Service and Repair Manager, instead of Shipyard Manager.
He denied owing Watercraft the amount of US$16,324.82 representing storage fees for the sailboat. He
explained that the sailboat was purchased in February 1998 as part of an agreement between him and
Watercraft1 s then General Manager, Barry Bailey, and its President, Ricky Sandoval, for it to be repaired
and used as training or fill-in project for the staff, and to be sold later on. He added that pursuant to a central
Listing Agreement for the sale of the sailboat, he was appointed as agent, placed in possession thereof and
entitled to a ten percent (10%) sales commission. He insisted that nowhere in the agreement was there a
stipulation that berthing and storage fees will be charged during the entire time that the sailboat was in
Watercraft's dockyard. Thus, he claimed to have been surprised when he received five (5) invoices billing
him for the said fees two (2) months after his services were terminated. Fie pointed out that the complaint
was an offshoot of an illegal dismissal case he filed against Watercraft which had been decided in his favor
by the Labor Arbiter.
26
Meanwhile, finding Watercraft's ex-parte application for writ of preliminary attachment sufficient in form
and in substance pursuant to Section 1 of Rule 57 of the Rules of Court, the RTC granted the same in the
Order dated July 15, 2005, thus:
WHEREFORE, let a Writ of Preliminary Attachment be issued accordingly in favor of the plaintiff,
Watercraft Ventures Corporation conditioned upon the filing of attachment bond in the amount of Three
Million Two Hundred Thirty-One Thousand Five Hundred and Eighty-Nine and 25/100 Pesos
(Php3,231,589.25) and the said writ be served simultaneously with the summons, copies of the complaint,
application for attachment, applicant's affidavit and bond, and this Order upon the defendant.
SO ORDERED.4
Pursuant to the Order dated July 15, 2005, the Writ of Attachment dated August 3, 2005 and the Notice of
Attachment dated August 5, 2005 were issued, and Wolfe's two vehicles, a gray Mercedes Benz with plate
number XGJ 819 and a maroon Toyota Corolla with plate number TFW 110, were levied upon.
On August 12, 2005, Wolfe's accounts at the Bank of the Philippine Islands were also garnished.
By virtue of the Notice of Attachment and Levy dated September 5, 2005, a white Dodge pick-up truck with
plate number XXL 111 was also levied upon. However, a certain Jeremy Simpson filed a Motion for Leave
of Court to Intervene, claiming that he is the owner of the truck as shown by a duly-notarized Deed of Sale
executed on August 4, 2005, the Certificate of Registration No. 3628665-1 and the Official Receipt No.
271839105.
On November 8, 2005, Wolfe filed a Motion to Discharge the Writ of Attachment, arguing that Watercraft
failed to show the existence of fraud and that the mere failure to pay or perform an obligation does not
amount to fraud. Me also claimed that he is not a flight risk for the following reasons: (1) contrary to the
claim that his Special Working Visa expired in April 2005, his Special Subic Working Visa and Alien
Certificate of Registration are valid until April 25, 2007 and May 11, 2006, respectively; (2) he and his
family have been residing in the Philippines since 1997; (3) he is an existing stockholder and officer of
Wolfe Marine Corporation which is registered with the Securities and Exchange Commission, and a
consultant of "Sudeco/Ayala" projects in Subic, a member of the Multipartite Committee for the new port
development in Subic, and the Subic Chamber of Commerce; and (4) he intends to finish prosecuting his
pending labor case against Watercraft. On even date, Watercraft also filed a Motion for Preliminary
Hearing of its affirmative defenses of forum shopping, litis pendentia, and laches.
In an Order dated March 20, 2006, the RTC denied Wolfe's Motion to Discharge Writ of Attachment and
Motion for Preliminary Hearing for lack of merit.
Wolfe filed a motion for reconsideration, but the RTC also denied it for lack of merit in an Order dated
November 10, 2006. Aggrieved, Wolfe filed a petition for certiorari before the CA.
The CA granted Wolfe's petition in a Decision dated September 2007, the dispositive portion of which reads:
WHEREFORE, the Order dated March 20, 2006 and the Order dated November 10, 2006 of respondent
Judge are hereby ANNULLED and SET ASIDE. Accordingly, the Writ of Attachment issued on August 3,
2005, the Notice of Attachment dated August 5, 2005 and the Notice of Attachment and Levy dated
September 5, 2005 are hereby also declared NULL and VOID, and private respondent is DIRECTED to
return to their owners the vehicles that were attached pursuant to the Writ.
SO ORDERED.5
The CA ruled that the act of issuing the writ of preliminary attachment ex-parte constitutes grave abuse of
discretion on the part of the RTC, thus:
x x x In Cosiquien [v. Court of Appeals], the Supreme Court held that:
"Where a judge issues a fatally defective writ of preliminary attachment based on an affidavit which
failed to allege the requisites prescribed for the issuance of the writ of preliminary attachment, renders
the writ of preliminary attachment issued against the property of the defendant fatally defective. The
judge issuing it is deemed to have acted in excess of jurisdiction. In fact, the defect cannot even be cured
by amendment. Since the attachment is a harsh and rigorous remedy which exposed the debtor to
humiliation and annoyance, the rule authorizing its issuance must be strictly construed in favor of
defendant. It is the duty of the court before issuing the Avrit to ensure that all the requisites of the law
have been complied with. Otherwise, a judge acquires no jurisdiction to issue the writ." (emphasis
supplied)
In the instant case, the Affidavit of Merit executed by Rosario E. Rañoa, Watercraft's Vice-President, failed
to show fraudulent intent on the part of Wolfe to defraud the company. It merely enumerated the
circumstances tending to show the alleged possibility of Wolfe's flight from the country. And upon Wolfe's
filing of the Motion to Discharge the Writ, what the respondent Judge should have done was to determine,
through a hearing, whether the allegations of fraud were true. As further held in Cosiquien:
"When a judge issues a writ of preliminary attachment ex-parte, it is incumbent on him, upon proper
challenge of his order to determine whether or not the same was improvidently issued. If the party against
whom the writ is prayed for squarely controverts the allegation of fraud, it is incumbent on the applicant
to prove his allegation. The burden of proving that there indeed was fraud lies with the party making
such allegation. This finds support in Section 1, Rule 131 Rules of Court. In this jurisdiction, fraud is never
presumed." (Emphasis supplied)
As correctly noted by Wolfe, although Sec. 1 of Rule 57 allows a party to invoke fraud as a ground for the
issuance of a writ of attachment, the Rules require that in all averments of fraud, the circumstances
constituting fraud must be stated with particularity, pursuant to Rule 8, Section 5. The Complaint merely
stated, in paragraph 23 thereof that "For failing to pay the use [of] facilities and services in the form of boat
storage fees, the Defendant is clearly guilty of fraud which entitles the Plaintiff to a Writ of Preliminary
Attachment upon the property of the Defendant as security for the satisfaction of any judgment herein." This
allegation does not constitute fraud as contemplated by law, fraud being the "generic term embracing all
multifarious means which human ingenuity can devise, and which are resorted to by one individual to
secure an advantage over another by false suggestions or by suppression of truth and includes all surprise,
trick, cunning, dissembling and any unfair way by which another is cheated." In this instance, Wolfe's mere
failure to pay the boat storage fees does not necessarily amount to fraud, absent any showing that such
failure was due to [insidious] machinations and intent on his part to defraud Watercraft of the amount due
it.
As to the allegation that Wolfe is a flight risk, thereby warranting the issuance of the writ, the same lacks
merit. The mere fact that Wolfe is a British national does not automatically mean that he would leave the
country at will. As Wolfe avers, he and his family had been staying in the Philippines since 1997, with his
daughters studying at a local school. He also claims to be an existing stockholder and officer of Wolfe
Marine Corporation, a SEC-registered corporation, as well as a consultant of projects in the Subic Area, a
member of the Multipartite Committee for the new port development in Subic, and a member of the Subic
Chamber of Commerce. More importantly, Wolfe has a pending labor case against Watercraft - a fact which
the company glaringly failed to mention in its complaint - which Wolfe claims to want to prosecute until its
very end. The said circumstances, as well as the existence of said labor case where Wolfe stands not only to
be vindicated for his alleged illegal dismissal, but also to receive recompense, should have convinced the
trial court that Wolfe would not want to leave the country at will just because a suit for the collection of the
alleged unpaid boat storage fees has been filed against him by Watercraft.
27
Neither should the fact that Wolfe's Special Working Visa expired in April 2005 lead automatically to the
conclusion that he would leave the country. It is worth noting that all visas issued by the government to
foreigners staying in the Philippines have expiration periods. These visas, however, may be renewed,
subject to the requirements of the law. In Wolfe's case, he indeed renewed his visa, as shown by Special
Working Visa No. 05-WV-0124P issued by the Subic Bay Metropolitan Authority Visa Processing Office on
April 25, 2005, and with validity of two (2) years therefrom. Moreover, his Alien Certificate of
Registration was valid up to May 11, 2006.
Based on the foregoing, it is therefore clear that the writ was improvidently issued. It is well to emphasize
that "[T]he rules on the issuance of a writ of attachment must be construed strictly against the applicants.
This stringency is required because the remedy of attachment is harsh, extraordinary and summary in
nature. If all the requisites for the granting of the writ are not present, then the court which issues it acts in
excess of its jurisdiction. Thus, in this case, Watercraft failed to meet all the requisites for the issuance of
the writ. Thus, in granting the same, respondent Judge acted with grave abuse of discretion. 6
In a Resolution dated January 24, 2008, the CA denied Watercraft's motion for reconsideration of its
Decision, there being no new or significant issues raised in the motion.
Dissatisfied with the CA Decision and Resolution, Watercraft filed this petition for review on certiorari,
raising these two issues:
I.
WHETHER THE EX-PARTE ISSUANCE OF THE PRELIMINARY ATTACHMENT BY THE TRIAL COURT
IN FAVOR OF THE PETITIONER IS VALID.
II.
WHETHER THE ALLEGATIONS IN THE AFFIDAVIT OF MERIT CONCERNING FRAUD ARE
SUFFICIENT TO WARRANT THE ISSUANCE OF A PRELIMINARY WRIT OF ATTACHMENT BY THE
TRIAL COURT IN FAVOR OF THE PETITIONER.7
Watercraft argues that the CA erred in holding that the RTC committed grave abuse of discretion in issuing
the writ of preliminary attachment, and in finding that the affidavit of merit only enumerated circumstances
tending to show the possibility of Wolfe's flight from the country, but failed to show fraudulent intent on his
part to defraud the company.
Stressing that its application for such writ was anchored on two (2) grounds under Section 1, 8 Rule 57,
Watercraft insists that, contrary to the CA ruling, its affidavit of merit sufficiently averred with particularity
the circumstances constituting fraud as a common element of said grounds.
Watercraft points out that its affidavit of merit shows that from 1997, soon after Wolfe's employment as
Shipyard Manager, up to 2002, when his employment was terminated, or for a period of five (5) years, not
once did he pay the cost for the use of the company's boat storage facilities, despite knowledge of obligation
and obvious ability to pay by reason of his position.
Watercraft adds that its affidavit clearly stated that Wolfe, in an attempt to avoid settling of his outstanding
obligations to the company, signed a Boat Pull-Out Clearance where he merely acknowledged but did not
pay Sixteen Thousand Three Hundred and Twenty-Four and 82/100 US Dollars (US$16,324.82)
representing unpaid boat storage fees for the period commencing June 1997 to June 2002. It avers that the
execution of such clearance enabled Wolfe to pull out his boat from the company storage facilities without
payment of storage fees.

Watercraft also faults the CA in finding no merit in its allegation that Wolfe is a flight risk. It avers that he
was supposed to stay and work in the country for a limited period, and will eventually leave; that despite the
fact that his wife and children reside in the country, he can still leave with them anytime; and that his work
in the country will not prevent him from leaving, thereby defeating the purpose of the action, especially
since he had denied responsibility for his outstanding obligations. It submits that the CA overlooked
paragraph 28 of its Complaint which alleged that "[i]n support of the foregoing allegations and the prayer
for the issuance of a Writ of Preliminary Attachment in the instant case, the Plaintiff has attached hereto the
Affidavit of the Vice-President of the Plaintiff, MS. ROSARIO E. RANOA x x x." 9
Watercraft asserts that it has sufficiently complied with the only requisites for the issuance of the writ of
preliminary attachment under Section 3, Rule 57 of the Rules of Court, i.e., affidavit of merit and bond of the
applicant. It posits that contrary to the CA ruling, there is no requirement that evidence must first be offered
before a court can grant such writ on the basis of Section 1 (d) of Rule 57, and that the rules only require an
affidavit showing that the case is one of those mentioned in Section 1, Rule 57. It notes that although a party
is entitled to oppose an application for the issuance of the writ or to move for the discharge thereof by
controverting the allegations of fraud, such rule does not apply when the same allegations constituting fraud
are the very facts disputed in the main action, as in this case.
Watercraft also points out the inconsistent stance of Wolfe with regard to the ownership and possession of
the sailboat. Contrary to Wolfe's Answer that the purchase of the sailboat was made pursuant to a three (3)-
way partnership agreement between him and its General Manager and Executive Vice-President, Barry
Bailey, and its President, Ricky Sandoval, Watercraft claims that he made a complete turnaround and
exhibited acts of sole-ownership by signing the Boat Pull-Out Clearance in order to retrieve the sailboat. It
argues that common sense and logic would dictate that he should have invoked the existence of the
partnership to answer the demand for payment of the storage fees.
Watercraft contends that in order to pre-empt whatever action it may decide to take with respect to the
sailboat in relation to his liabilities, Wolfe accomplished in no time the clearance that paved the way for its
removal from the company's premises without paying his outstanding obligations. It claims that such act
reveals a fraudulent intent to use the company storage facilities without payment of storage fees, and
constitutes unjust enrichment.
The petition lacks merit.
A writ of preliminary attachment is defined as a provisional remedy issued upon order of the court where an
action is pending to be levied upon the property or properties of the defendant therein, the same to be held
thereafter by the sheriff as security for the satisfaction of whatever judgment that might be secured in the
said action by the attaching creditor against the defendant.10 However, it should be resorted to only when
necessary and as a last remedy because it exposes the debtor to humiliation and annoyance. 11 It must be
granted only on concrete and specific grounds and not merely on general averments quoting the words of
the rules.12 Since attachment is harsh, extraordinary, and summary in nature, 13 the rules on the application
of a writ of attachment must be strictly construed in favor of the defendant.
For the issuance of an ex-parte issuance of the preliminary attachment to be valid, an affidavit of merit and
an applicant's bond must be filed with the court 14 in which the action is pending. Such bond executed to the
adverse party in the amount fixed by the court is subject to the conditions that the applicant will pay: (1) all
costs which may be adjudged to the adverse party; and (2) all damages which such party may sustain by
reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto. 15 As to
28
the requisite affidavit of merit, Section 3,16 Rule 57 of the Rules of Court states that an order of attachment
shall be granted only when it appears in the affidavit of the applicant, or of some other person who
personally knows the facts:
that a sufficient cause of action exists;ChanRoblesVirtualawlibrary
that the case is one of those mentioned in Section 1 17 hereof;ChanRoblesVirtualawlibrary
that there is no other sufficient security for the claim sought to be enforced by the action; and
that the amount due to the applicant, or the value of the property the possession of which he is entitled to
recover, is as much as the sum for which the order is granted above all legal counterclaims.
The mere filing of an affidavit reciting the facts required by Section 3, Rule 57, however, is not enough to
compel the judge to grant the writ of preliminary attachment. Whether or not the affidavit sufficiently
established facts therein stated is a question to be determined by the court in the exercise of its
discretion.18 "The sufficiency or insufficiency of an affidavit depends upon the amount of credit given it by
the judge, and its acceptance or rejection, upon his sound discretion." 19 Thus, in reviewing the conflicting
findings of the CA and the RTC on the pivotal issue of whether or not Watercraft's affidavit of merit
sufficiently established facts which constitute as grounds upon which attachment may be issued under
Section 1 (a)20 and (d),21 Rule 57, the Court will examine the Affidavit of Preliminary Attachment 22 of
Rosario E. Rañoa, its Vice-President, which reiterated the following allegations in its complaint to
substantiate the application for a writ of preliminary attachment:
xxxx
4. Sometime in June 1997, the Defendant was hired as Watercraft's Shipyard Manager.
5. Soon thereafter, the Defendant placed his sailboat, the Knotty Gull, within the boat storage facilities of
Watercraft for purposes of storage and safekeeping.
6. Despite having been employed by Watercraft, the Defendant was not exempted from paying Watercraft
boat storage fees for the use of the said storage facilities.
7. By virtue of his then position and employment with Watercraft, the Defendant was very much
knowledgeable of the foregoing fact.
8. All throughout his employment with Watercraft, the Defendant used the boat storage facilities of
Watercraft for his Knotty Gull.
9. However, all throughout the said period of his employment, the Defendant never paid the boat storage
fees in favor of the Plaintiff.
10. The Defendant's contract of employment with Watercraft was terminated on 07 March 2002.
11. [Sometime] thereafter, that is, in or about June 2002, the Defendant pulled out the Knotty Gull from the
boat storage facilities of Watercraft.
12. Instead of settling in full his outstanding obligations concerning unpaid storage fees before pulling our
the Knotty Gull, the Defendant signed a Boat Pull-Out Clearance dated 29 June 2002 wherein he merely
acknowledged the then outstanding balance of Sixteen Thousand Three Hundred and Twenty-four and
82/100 US Dollars (US$16,324.82), representing unpaid boat storage fees for the period commencing June
1997 to June 2002, that he owed Watercraft.
13. By reason of Defendant's mere accomplishment of the said Boat Pull-Out Clearance with
acknowledgment of his outstanding obligation to Watercraft in unpaid boat storage fees, Mr. Franz
Urbanek, then the Shipyard Manager who replaced the Defendant, contrary to company policy, rules and
regulations, permitted the latter to physically pull out his boat from the storage facilities of the Plaintiff
without paying any portion of his outstanding obligation in storage fees.
14. Several demands were then made upon the Defendant for him to settle his outstanding obligations to the
Plaintiff in unpaid storage fees but the same went unheeded.
15. As of 02 April 2005, the outstanding obligation of the Defendant to the Plaintiff in unpaid boat storage
fees stands at Three Million Two Hundred Thirty-One Thousand Five Hundred and Eighty-Nine and 25/100
Pesos (Php3,231,589.25) inclusive of interest charges.
16. For failing to pay for the use [of] facilities and services—in the form of boat storage facilities—duly
enjoyed by him and for failing and refusing to fulfill his promise to pay for the said boat storage fees, the
Defendant is clearly guilty of fraud which entitles the Plaintiff to a Writ of Preliminary Attachment upon the
property of the Defendant as security for the satisfaction of any judgment in its favor in accordance with the
provisions of Paragraph (d), Section 1, Rule 57 of the Rules of Court.
17. The instant case clearly falls under the said provision of law.
18. Furthermore, lawful factual and legal grounds exist which show that the Defendant may have departed
or is about to depart the country to defraud his creditors thus rendering it imperative that a Writ of
Preliminary Attachment be issued in favor of the Plaintiff in the instant case.
19. The possibility of flight on the part of the Defendant is heightened by the existence of the following
circumstances:
a. The Special Working Visa issued in favor of the Defendant expired in April
2005;ChanRoblesVirtualawlibrary
b. The Defendant is a British national who may easily leave the country at will;ChanRoblesVirtualawlibrary
c. The Defendant has no real properties and visible, permanent business or employment in the Philippines;
and
e. The house last known to have been occupied by the Defendant is merely being rented by him.
20. All told, the Defendant is a very serious flight risk which fact will certainly render for naught the
capacity of the Plaintiff to recover in the instant case.23
After a careful perusal of the foregoing; allegations, the Court agrees with the CA that Watercraft failed to
state with particularity the circumstances constituting fraud, as required by Section 5, 24 Rule 8 of the Rules
of Court, and that Wolfe's mere failure to pay the boat storage fees does not necessarily amount to fraud,
absent any showing that such failure was due to insidious machinations and intent on his part to defraud
Watercraft of the amount due it.
In Liberty Insurance Corporation v. Court of Appeals, 25 the Court explained that to constitute a ground for
attachment in Section 1(d), Rule 57 of the Rules of Court, it must be shown that the debtor in contracting the
debt or incurring the obligation intended to defraud the creditor. A debt is fraudulently contracted if at the
29
time of contracting it, the debtor has a preconceived plan or intention not to pay. "The fraud must relate to
the execution of the agreement and must have been the reason which induced the other party into giving
consent which he would not have otherwise given." 26
Fraudulent intent is not a physical entity, but a condition of the mind beyond the reach of the senses, usually
kept secret, very unlikely to be confessed, and therefore, can only be proved by unguarded expressions,
conduct and circumstances.27 Thus, the applicant for a writ of preliminary attachment must sufficiently show
the factual circumstances of the alleged fraud because fraudulent intent cannot be inferred from the debtor's
mere non-payment of the debt or failure to comply with his obligation. 28 The particulars of such
circumstances necessarily include the time, persons, places and specific acts of fraud committed. 29 An
affidavit which does not contain concrete and specific grounds is inadequate to sustain the issuance of such
writ. In fact, mere general averments render the writ defective and the court that ordered its issuance acted
with grave abuse of discretion amounting to excess of jurisdiction. 30
In this case, Watercraft's Affidavit of Preliminary Attachment does not contain specific allegations of other
factual circumstances to show that Wolfe, at the time of contracting the obligation, had a preconceived plan
or intention not to pay. Neither can it be inferred from such affidavit the particulars of why he was guilty of
fraud in the performance of such obligation. To be specific, Watercraft's following allegation is unsupported
by any particular averment of circumstances that will show why or how such inference or conclusion was
arrived at, to wit: "16. For failing to pay for the use [of] facilities and services - in the form of boat storage
facilities - duly enjoyed by him and for failing and refusing to fulfill his promise to pay for the said boat
storage fees, the Defendant is clearly guilty of fraud x x x." 31 It is not an allegation of essential facts
constituting Watercraft's causes of action, but a mere conclusion of law.
With respect to Section 1 (a),32 Rule 57, the other ground invoked by Watercraft for the issuance of the writ
of preliminary attachment, the Court finds no compelling reason to depart from the CA's exhaustive ruling
to the effect that such writ is unnecessary because Wolfe is not a flight risk, thus:
As to the allegation that Wolfe is a (light risk, thereby warranting the issuance of the writ, the same lacks
merit. The mere fact that Wolfe is a British national does not automatically mean that he would leave the
country at will. As Wolfe avers, he and his family had been staying in the Philippines since 1997, with his
daughters studying at a local school. He also claims to be an existing stockholder and officer of Wolfe
Marine Corporation, a SEC - registered corporation, as well as a consultant of projects in the Subic Area, a
member of the Multipartite Committee for the new port development in Subic, and a member of the Subic
Chamber of Commerce. More importantly, Wolfe has a pending labor case against Watercraft - a fact which
the company glaringly failed to mention in its complaint - which Wolfe claims to want to prosecute until its
very end. The said circumstances, as well as the existence of said labor case where Wolfe stands not only to
be vindicated for his alleged illegal dismissal, but also to receive recompense, should have convinced the
trial court that Wolfe would not want to leave the country at will just because a suit for the collection of the
alleged unpaid boat storage fees has been filed against him by Watercraft.
Neither should the fact that Wolfe's Special Working Visa expired in April 2005 lead automatically to the
conclusion that he would leave the country. It is worth noting that all visas issued by the government to
foreigner staying in the Philippines have expiration periods. These visas, however, may be renewed, subject
to the requirements of the law. In Wolfe's case, he indeed renewed his visa, as shown by Special Working
Visa No. 05-WV-0124P issued by the Subic Bay Metropolitan Authority Visa Processing Office on April 25,
2005, and with validity of two (2) years therefrom. Moreover, his Alien Certificate of Registration was valid
up to May 11, 2006.33
Meanwhile, Watercraft's reliance on Chuidian v. Sandiganbayan34 is displaced. It is well settled that:
x x x when the preliminary attachment is issued upon a ground which is at the same time the applicant's
cause of action; e.g., "an action for money or property embezzled or fraudulently misapplied or converted
to his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker, agent, or
clerk, in the course of his employment as such, or by any other person in a fiduciary capacity, or for a
willful violation of duty," or "an action against a party who has been guilty of fraud in contracting the debt
or incurring the obligation upon which the action is brought," the defendant is not allowed to file a motion
to dissolve the attachment under Section 13 of Rule 57 by offering to show the falsity of the factual
averments in the plaintiffs application and affidavits on which the writ was based - and consequently that
the writ based thereon had been improperly or irregularly issued - the reason being that the hearing on
such a motion for dissolution of the writ would be tantamount to a trial of the merits of the action. In
other words, the merits of the action would be ventilated at a mere hearing of a motion, instead of at the
regular trial.35
Be that as it may, the foregoing rule is not applicable in this case because when Wolfe filed a motion to
dissolve the writ of preliminary attachment, he did not offer to show the falsity of the factual averments in
Watercraft's application and affidavit on which the writ was based. Instead, he sought the discharge of the
writ on the ground that Watercraft failed to particularly allege any circumstance amounting to fraud. No trial
on the merits of the action at a mere hearing of such motion will be had since only the sufficiency of the
factual averments in the application and affidavit of merit will be examined in order to find out whether or
not Wolfe was guilty of fraud in contracting the debt or incurring the obligation upon which the action is
brought, or in the performance thereof.

Furthermore, the other ground upon which the writ of preliminary attachment was issued by the RTC is not
at the same time the applicant's cause of action. Assuming arguendo that the RTC was correct in issuing
such writ on the ground that Watercraft's complaint involves an action for the recovery of a specified
amount of money or damages against a party, like Wolfe, who is about to depart from the Philippines with
intent to defraud his creditors, the Court stresses that the circumstances 36 cited in support thereof are merely
allegations in support of its application for such writ. 37 Such circumstances, however, are neither the core of
Watercraft's complaint for collection of sum of money and damages, nor one of its three (3) causes of action
therein.38

All told, the CA correctly ruled that Watercraft failed to meet one of the requisites for the issuance of a writ
of preliminary attachment, i.e., that the case is one of those mentioned in Section 1 of Rule 57, and that the
RTC gravely abused its discretion in improvidently issuing such writ. Watercraft failed to particularly state
in its affidavit of merit the circumstances constituting intent to defraud creditors on the part of Wolfe in
contracting or in the performance of his purported obligation to pay boat storage fees, as well as to establish
that he is a flight risk. Indeed, if all the requisites for granting such writ are not present, then the court which
issues it acts in excess of its jurisdiction.39chanroblesvirtuallawlibrary

WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated
September 27, 2007 and its Resolution dated January 24, 2008 in CA-G.R. SP No. 97804, are AFFIRMED.

SO ORDERED.chanroblesvirtuallawlibrary

30
SECOND DIVISION
G.R. No. 193821, November 23, 2015 All the post-dated checks were dishonored when Phil-Air subsequently presented them for payment. Check
PHIL-AIR CONDITIONING CENTER, Petitioner, v. RCJ LINES AND ROLANDO ABADILLA, No. 479759 was returned because it was drawn against insufficient funds, while Check Nos. 479760 and
JR., Respondent. 479761 were returned because payments were stopped. 10
DECISION
BRION, J.: Before presenting the third check for payment, Phil-Air sent a demand letter11 to Rolando Abadilla, Sr. on
Phil-Air Conditioning Center (Phil-Air) filed this petition for review on certiorari1 to assail the September April 7, 1992, asking him to fund the post-dated checks.
15, 2010 decision2 of the Court of Appeals (CA) in CA-G.R. CV No. 85866.
On July 17, 1996, Phil-Air demanded payment from Rolando Abadilla, Jr., for the total amount of
The CA affirmed the September 8, 2004 decision of the Regional Trial Court (RTC), Branch 119 of Pasay P734,994.00 plus interest, and attorney's fees equivalent to 25% of the amount due. Phil-Air warned that it
City, dismissing Phil-Air's complaint for sum of money with prayer for a writ of preliminary attachment. 3 would take court action if payment is not made within five days from demand. 12

Designated as Acting Member in lieu of Associate Justice Antonio T. Carpio, per Special Order No. 2282 In view of the failure of RCJ Lines to pay the balance despite demand, Phil-Air filed on April 1, 1998 the
dated November 13, 2015. complaint13 for sum of money with prayer for the issuance of a writ of preliminary attachment. 14 Phil-Air
sought to recover from RCJ Lines:chanRoblesvirtualLawlibrary
Designated as Acting Chairperson in lieu of Associate Justice Antonio T. Carpio, per Special Order No.
2281 dated November 13, 2015. a) The total amount of P840,000.00 exclusive of interest for the unpaid delivered air-conditioning units;
Antecedents
b) The amount of P60,000.00 for the unpaid repair services;

On various dates between March 5, 1990, and August 29, 1990, petitioner Phil-Air sold to respondent RCJ
Lines four Carrier Paris 240 air-conditioning units for buses (units). The units included compressors,
condensers, evaporators, switches, wiring, circuit boards, brackets, and fittings. 4
The total purchases amounted to P1,240,000.00 as shown on a sales invoice dated November 5, 1990.5RCJ
Lines paid P400,000.00, leaving a balance of P840,000.00. 6
RCJ Lines accepted the delivery of the units, which Phil-Air then installed after they were inspected by RCJ
Lines president Rolando Abadilla, Sr.7
Phil-Air allegedly performed regular maintenance checks on the units pursuant to the one-year warranty on
parts and labor. After some months from installation, Phil-Air supposedly boosted the capacity of the units
by upgrading them to the Carrier Paris 280 model.8 It also purportedly repaired the control switch panel of
one of the units for an additional cost of P60,000.00. 9
RCJ Lines issued three post-dated checks in favor of Phil-Air to partly cover the unpaid
balance:chanRoblesvirtualLawlibrary
Check No. Amount Post-dated
479759 Php 244,998.00 February 28, 1992
c) The total interest in the amount of P756,000.00 (P840,000.00 x 12% x 7 years + P60,000.00 x 12% x 7
years);
d) The sum equivalent to 25% of the total amount due as attorney's fees, plus P3,000.00 per court
appearance; and
e) Costs of the suit.
In its answer with compulsory counterclaim,15RCJ Lines admitted that it purchased the units in the total
amount of PI,240,000.00 and that it had only paid P400,000.00. It refused to pay the balance because Phil-
Air allegedly breached its warranty.16
RCJ Lines averred that the units did not sufficiently cool the buses despite repeated repairs. Phil-Air
purportedly represented that the units were in accord with RCJ Lines' cooling requirements as shown in
Phil-Air's price quotation17 dated August 4, 1989. The price quotation provided that full payment should be
made upon the units' complete installation. Complete installation, according to RCJ Lines, is equivalent to
being in operational condition.
As it turned out, the Carrier Paris 240 model was not suited to the 45 to 49-seater buses operated by RCJ
Lines. The units, according to RCJ Lines, were defective and did not attain full operational condition. 18

479760 Php 244,998.00 March 31, 1992 Further, RCJ Lines claimed that it was also entitled to be reimbursed for costs and damages occasioned by
the enforcement of the writ of attachment.
479761 Php 244,998.00 April 30, 1992
RCJ Lines thus urged the RTC to order Phil-Air to pay (1) the replacement costs of the units; (2) lost profits
TOTAL Php 734,994.00 for nine days from April 22 to April 30, 1999, resulting from the attachment of its two buses amounting to
P207,000.00;19 and (3) P64,390.00 for the counter-bond premium, moral damages, exemplary damages and
cralawlawlibrary attorney's fees.

31
The RTC Ruling
The RTC granted the application for the issuance of a writ of preliminary attachment after Phil-Air posted
an attachment bond in the amount of P1,656,000.00. 20 Two buses of RCJ Lines were attached pursuant to
the writ dated December 18, 1998.21 The writ was executed on April 21, 1999.22 The attachment, however,
was later lifted when the RTC granted RCJ Lines' urgent motion to discharge the writ of attachment. 23 RCJ
Lines posted a counter-bond in the same amount as the attachment bond.24
Ruling on the merits after trial, the RTC found that Phil-Air was guilty of laches and estopped from pursuing
its claim. It also sustained the allegation that Phil-Air had breached its warranty.
The dispositive portion of the RTC judgment reads:chanRoblesvirtualLawlibrary
WHEREFORE, judgment is hereby rendered as follows:
A. Dismissing the complaint of plaintiff for lack of merit.
B. Directing the plaintiff to pay the defendants the amount of PI00,000.00 as attorney's fees as they
were forced to spend and hire a lawyer to litigate for seven (7) years in this Court the unfounded
and invalid cause of action of plaintiff.
C. Directing the plaintiff to pay P82,274.00 as refund of the premium xxx for defendant's counter-
bond for the release of the two buses which were attached per Writ of Attachment of this Court.
D. Directing the plaintiff to pay P216,000.00 for the lost profits of defendants for the attachment of
their two buses as there was no fraud in the transaction of the parties and plaintiff had no sufficient
cause of action for the issuance of the writ of attachment.
E. Dismissing all other claims of defendants as stated in their counter-claims.
F. Costs against plaintiff. SO ORDERED.25
cralawlawlibrary
The CA Ruling
The CA affirmed the RTC decision in toto.26
First, the CA held that Phil-Air's cause of action was barred by laches.27
The CA concluded that "Phil-Air's inaction on RCJ Lines' repeated demands and inexplicable failure to
comply with its obligations had certainly led the latter to believe [Phil-Air] was no longer interested in
pursuing any claim" and that "[Phil-Air] had been conspicuously silent for so long a time which is
disturbingly unusual for one claiming to have been aggrieved by another." 28
Second, the CA held that Phil-Air breached its warranty. The price quotation supposedly warranted that the
Carrier Paris 240 model was suitable for 50-60-passenger coaches and especially recommended for
operation in the tropics.29
The CA gave credence to the testimony of the country manager of Carrier Refrigeration Philippines Inc.
(Carrier Philippines) who testified that the Carrier Paris 240 model is suited for buses with a maximum
seating capacity of up to 35 persons; beyond that, the units would not function properly. 30 The CA also
found convincing the testimonies of two RCJ Lines employees who testified that they experienced firsthand
the inefficient cooling of the Carrier Paris 240.31
Relying on these testimonies, the CA found that the four units did not meet the cooling requirements of RCJ
Lines.32
32
Third, the CA ordered Phil-Air to reimburse the premium on the counter-bond amounting to P82,274.00
since the writ was improvidently issued.
Fourth, the CA affirmed the finding of the RTC that RCJ Lines suffered losses when the RTC attached two
of its buses.
The RTC and the CA relied on the testimony of Rolando Abadilla, Jr., who claimed to be in charge of the
daily operations of RCJ Lines. He testified that they suffered losses for nine days as a result of the
enforcement of the writ of preliminary attachment. The lost profits purportedly amounted to P227,280.00.
To support this claim, RCJ Lines adduced as evidence the summary of the daily cash collections 33 from the
buses that were not attached, on various dates in August and September 2000. 34
Finally, the CA sustained the award of attorney's fees for PI 00,000.00 in favor of RCJ lines for having been
compelled to litigate.
The Petition
First, Phil-Air argues that the doctrine of laches is not applicable when the action is filed within the
prescriptive period. Laches, being a doctrine of equity, should only be applied to fill a void in the law.35
Phil-Air asserts that it filed the complaint on April 1, 1998, or less than eight years from the execution of the
sales invoice dated November 5, 1990. The complaint was thus filed within the ten-year prescriptive period
for actions based upon a written contract.
Second, Phil-Air denies that it breached its warranty.
It maintains that all the units were brand new and were accepted by RCJ Lines in good, working, and
operational condition. The units were inspected, tested, and approved by then RCJ Lines president, Rolando
Abadilla, Sr., as proved by the delivery receipts in which he affixed his signature. 36
Phil-Air further avers that it was not notified of the alleged breach of warranty. Assuming it breached its
warranty, Phil-Air submits that the action to enforce the warranty had already prescribed.
Third, Phil-Air rejects the CA's order that it must reimburse the premium payment for the counter-bond and
the alleged losses suffered by RCJ Lines. The attachment bond should be answerable for damages, if any.
Respondent's Comment
RCJ Lines reiterates all the arguments it raised in its counterclaim. It admits that it did not pay the balance of
the purchase price.37 It maintains, however, that it was justified in doing so because Phil-Air breached its
warranty. It insists that Phil-Air was guilty of laches because it waited for eight years to file the collection
case.38
Issues
Based on the foregoing, the Court resolves the following issues:chanRoblesvirtualLawlibrary
(1)Whether the claim of Phil-Air was barred by laches;
(2)Whether Phil-Air should reimburse RCJ Lines for the counter- bond premium and its alleged unrealized
profits;
(3)Whether RCJ Lines proved its alleged unrealized profits arising from the enforcement of the preliminary
writ of attachment; and
(4)Whether RCJ Lines proved that Phil-Air breached its warranty.
Our Ruling
We grant the petition.
Phil-Air's claim is not
barred by laches.
In general, there is no room to apply the concept of laches when the law provides the period within which to
enforce a claim or file an action in court. Phil-Air's complaint for sum of money is based on a written
contract of sale. The ten-year prescriptive period under Article 1144 of the Civil Code thus applies. 39
In the present case, both parties admit the existence and validity of the contract of sale. They recognize that
the price quotation dated August 4, 1989, contained the terms and conditions of the sale contract. They also
agree that the price and description of the units were indicated on the sales invoice dated November 5, 1990.
The sales were in fact consummated on various dates between March 5, 1990 and August 29, 1990, as
proved by several delivery receipts.
The Court therefore can resolve whether Phil-Air's action to enforce the contract was timely filed even in the
apparent absence of a formal or notarized deed of sale.40 More significantly, Rolando Abadilla, Jr., admitted
under oath that the sale was in writing.41
We note that Phil-Air filed the complaint with the RTC on April 1, 1998. Counting from the date of the sales
invoice, or from the date of the delivery receipts, or even from the date of the price quotation, it is clear that
the complaint was filed within the ten-year prescriptive period. Contrary to the CA's ruling, laches does not
apply.
Laches is defined as the failure or neglect for an unreasonable and unexplained length of time, to do that
which by exercising due diligence, could or should have been done earlier; it is negligence or omission to
assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has
abandoned it or declined to assert it.42
While the CA correctly held that prescription and estoppel by laches are two different concepts, it failed to
appreciate the marked distinctions between the two concepts.
On the one hand, the question of laches is addressed to the sound discretion of the court. 43 The court
resolves whether the claimant asserted its claim within a reasonable time and whether its failure to do so
warrants the presumption that it either has abandoned it or declined to assert it. The court determines the
claimant's intent to assert its claim based on its past actions or lack of action. After all, what is invoked in
instances where a party raises laches as a defense is the equity jurisdiction of the court. 44
On the other hand, if the law gives the period within which to enforce a claim or file an action in court, the
court confirms whether the claim is asserted or the action is filed in court within the prescriptive period.
The court determines the claimant's intent to assert its claim by simply measuring the time elapsed from the
proper reckoning point (e.g., the date of the written contract) to the filing of the action or assertion of the
claim.
In sum, where the law provides the period within which to assert a claim or file an action in court, the
33
assertion of the claim or the filing of the action in court at any time within the prescriptive period is
generally deemed reasonable, and thus, does not call for the application of laches. As we held in one
case, unless reasons of inequitable proportions are adduced, any imputed delay within the prescriptive
period is not delay in law that would bar relief.45
In Agra, et al. v. Philippine National Bank,46 we held that "[l]aches is a recourse in equity [and] is applied
only in the absence, never in contravention, of statutory law. Thus, laches cannot, as a rule, abate a
collection suit filed within the prescriptive period mandated by the Civil Code."
Agra involved an action for collection of a sum of money arising from an unpaid loan. In resisting payment,
the sureties invoked laches and maintained that the creditor-bank with full knowledge of the deteriorating
financial condition of the principal debtor did not take steps to collect from the latter while still solvent. The
sureties thus argued that the creditor-bank's action was barred by laches.
We found that the sureties failed to prove all the elements of laches, namely:
(1) conduct on the part of the defendant or one under whom he claims, giving rise to the situation of
which complaint is made and for which the complainant seeks a remedy;
(2) delay in asserting the complainant's right, the complainant having had knowledge or notice of
defendant's conduct and having been afforded an opportunity to institute a suit;
(3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on
which he bases his claim; and
(4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not
held barred.47
cralawlawlibrary
Examining these elements, we found that only the first element was present. There was no delay (second
element) because the creditor-bank filed the action within the ten-year prescriptive period. Since the claim
was timely filed, the defendants did not lack notice that the creditor-bank would assert its claim (third
element). Nor was the assertion of the right deemed injurious to the defendants (fourth element); the
creditor-bank could assert its claim at any time within the prescriptive period.
The same conclusion holds true in the present case; not all the elements of laches are present. To repeat,
Phil-Air filed the complaint with the RTC on April 1, 1998. The time elapsed from August 4, 1989 (the date
of the price quotation, which is the earliest possible reckoning point), is eight years and eight months, well
within the ten-year prescriptive period. There was simply no delay (second element of laches) where Phil-
Air can be said to have negligently slept on its rights.
More significantly, there is no basis for laches as the facts of the present case do not give rise to an
inequitable situation that calls for the application of equity and the principle of laches.48
Phil-Air is not directly liable
for the counter-bond premium and
RCJ Lines' alleged unrealized profits.
The CA and the RTC erred when it held Phil-Air directly liable for the counter-bond premium and RCJ
Lines' alleged unrealized profits. Granting that RCJ Lines suffered losses, the judgment award should have
been first executed on the attachment bond. Only if the attachment bond is insufficient to cover the
judgment award can Phil-Air be held liable.49
We explain below the purpose of a preliminary attachment, the procedure in obtaining it, and the manner of
having it lifted.
A writ of preliminary attachment is a provisional remedy issued by the court where an action is pending to
be levied upon the property or properties of the defendant. The property is held by the sheriff as security for
the satisfaction of whatever judgment that might be secured by the attaching party against the defendant. 50
The grant of the writ is conditioned not only on the finding of the court that there exists a valid ground for
its issuance.51 The Rules also require the applicant to post a bond.
Section 4 of Rule 57 of the Rules of Civil Procedure (Rules) provides that "the party applying for the order
must...give a bond executed to the adverse party in the amount fixed by the court, in its order granting the
issuance of the writ, conditioned that the latter will pay all the costs that may be adjudged to the
adverse party and all damages that he may sustain by reason of the attachment, if the court shall
finally adjudge that the applicant was not entitled thereto."
The enforcement of the writ notwithstanding, the party whose property is attached is afforded relief to have
the attachment lifted.
There are various modes of discharging an attachment under Rule 57, viz.: (1) by depositing cash or posting
a counter-bond under Section 12;52 (2) by proving that the attachment bond was improperly or irregularly
issued or enforced, or that the bond is insufficient under Section 13; 53 (3) by showing that the attachment is
excessive under Section 13; and (4) by claiming that the property is exempt from execution under Section
2.54
RCJ Lines availed of the first mode by posting a counter-bond.
Under the first mode, the court will order the discharge of the attachment after (1) the movant makes a cash
deposit or posts a counter-bond and (2) the court hears the motion to discharge the attachment with due
notice to the adverse party.55
The amount of the cash deposit or counter-bond must be equal to that fixed by the court in the order of
attachment, exclusive of costs. The cash deposit or counter-bond shall secure the payment of any judgment
that the attaching party may recover in the action.56
The filing of a counter-bond to discharge the attachment applies when there has already been a seizure of
property by the sheriff and all that is entailed is the presentation of a motion to the proper court, seeking
approval of a cash or surety bond in an amount equivalent to the value of the property seized and the lifting
of the attachment on the basis thereof. The counter-bond stands in place of the property so released.57
To be clear, the discharge of the attachment by depositing cash or posting a counter-bond under Section 12
should not be confused with the discharge sanctioned under Section 13. Section 13 speaks of discharge on
the ground that the writ was improperly or irregularly issued or enforced, or that the attachment bond is
insufficient, or that the attachment is excessive.
34
To reiterate, the discharge under Section 12 takes effect upon posting of a counter-bond or depositing cash,
and after hearing to determine the sufficiency of the cash deposit or counter-bond. On the other hand, the
discharge under Section 13 takes effect only upon showing that the plaintiffs attachment bond was
improperly or irregularly issued, or that the bond is insufficient. The discharge of the attachment under
Section 13 must be made only after hearing.58
These differences notwithstanding, the discharge of the preliminary attachment either through Section 12 or
Section 13 has no effect on and does not discharge the attachment bond. The dissolution of the
preliminary attachment does not result in the dissolution of the attachment bond. Justice Narvasa,
writing his separate opinion in one case, explained:chanRoblesvirtualLawlibrary
The dissolution of the preliminary attachment upon security given [Section 12], or a showing of its
irregular or improper issuance [Section 13], does not of course operate to discharge the sureties on
plaintiffs own attachment bond. The reason is simple. That bond is executed to the adverse party,. . .
conditioned that the ... (applicant) will pay all the costs which may be adjudged to the adverse party and all
damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the
applicant was not entitled thereto." Hence, until that determination is made, as to the applicant's entitlement
to the attachment, his bond must stand and cannot be withdrawn.59[emphasis and underscoring supplied,
citations omitted]cralawlawlibrary
In the present case, the RTC lifted the preliminary attachment after it heard RCJ Lines' urgent motion to
discharge attachment and the latter posted a counter-bond. The RTC found that there was no fraud and Phil-
Air had no sufficient cause of action for the issuance of the writ of the attachment. As a consequence, it
ordered Phil-Air to refund the premium payment for the counter-bond and the losses suffered by RCJ Lines
resulting from the enforcement of the writ. The CA affirmed the RTC ruling in toto.
We reverse the CA and RTC rulings.
As discussed above, it is patent that under the Rules, the attachment bond answers for all damages incurred
by the party against whom the attachment was issued.60
Thus, Phil-Air cannot be held directly liable for the costs adjudged to and the damages sustained by RCJ
Lines because of the attachment. Section 4 of Rule 57 positively lays down the rule that the attachment bond
will pay "all the costs which may be adjudged to the adverse party and all damages which he may
sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not
entitled thereto."
The RTC, instead of declaring Phil-Air liable for the alleged unrealized profits and counter-bond premium,
should have ordered the execution of the judgment award on the attachment bond. To impose direct liability
to Phil-Air would defeat the purpose of the attachment bond, which was not dissolved despite the lifting of
the writ of preliminary attachment.
The order to refund the counter-bond premium is likewise erroneous. The premium payment may be deemed
a cost incurred by RCJ Lines to lift the attachment. Such cost may be charged against the attachment bond.
RCJ Lines failed to prove its
alleged unrealized profits.
In finding that RCJ Lines suffered damages because of the attachment, the RTC and the CA gave complete
credence to the testimony of Rolando Abadilla, Jr. He claimed that RCJ Lines lost P216,000.00 in
unrealized profits for nine days when the buses were wrongfully seized.
To arrive at this amount, RCJ Lines alleged that a bus travelling from Manila to Ilocos and vice versa earned
an average daily income of P12,000.00. To back this claim, RCJ Lines prepared a summary of the daily cash
collections of its nine buses on certain days of August and September 2000.
The summary of daily cash collections apparently prepared by one RCJ Lines employee was in turn based
on the reports of the dispatchers indicating the number of passengers and the amount of fare collected on a
particular trip. Except for one bus which travelled round-trip on August 22-23, 2000, the daily cash
collections all pertained to the round-trip of eight buses on September 2-3, 2000.
These documents are insufficient to prove actual damages.
In Spouses Yu v. Ngo Yet Te,61 we held that if the claim for actual damages covers unrealized profits, the
amount of unrealized profits must be established and supported by independent evidence of the mean
income of the business undertaking interrupted by the illegal seizure.
We explained in Spouses Yu that to merit an award of actual damages arising from a wrongful attachment,
the attachment defendant must prove, with the best evidence obtainable, the fact of loss or injury suffered
and the amount thereof. Such loss or injury must be of the kind which is not only capable of proof but must
actually be proved with a reasonable degree of certainty. As to its amount, the same must be measurable
based on specific facts, and not on guesswork or speculation.62
Spouses Yu is on all fours with the present dispute because it also involved a claim for actual damages
arising from the illegal attachment of the claimant's properties, one of which was a passenger bus.
The claimants in that case attempted to prove actual damages by computing the daily average income of its
bus operation based on the value of three ticket stubs sold over five separate days. The claimants likewise
cited unused ticket stubs as proof of income foregone when the bus was wrongfully seized.
We found the claimant's evidence insufficient to prove actual damages. While we recognized that they
suffered some damages, we held that "[b]y no stretch of the imagination can we consider ticket sales for five
days sufficient evidence of the average daily income of the passenger bus, much less its mean income. Not
even the unrebutted testimony of [the claimant] can add credence to such evidence for the testimony itself
lacks corroboration."63
Similarly, the evidence adduced by RCJ Lines to show actual damages fell short of the required proof. Its
average daily income cannot be derived from the summary of daily cash collections from only two separate
occasions, i.e., August 22-23 and September 2-3, 2000. The data submitted is too meager and insignificant
to conclude that the buses were indeed earning an average daily income of P12,000.00.
More significant, the person who prepared the unsigned summary of daily cash collections was not
presented before the RTC to verify and explain how she arrived at the computation. The dispatchers who
prepared the collection reports were likewise not presented; some of the reports were also unsigned. While
the summary was approved by Rolando Abadilla, Jr., his testimony on the alleged unrealized profits was
uncorroborated and self-serving.
Nonetheless, we recognize that RCJ Lines suffered some form of pecuniary loss when two of its buses were
35
wrongfully seized, although the amount cannot be determined with certainty.
We note that in its prayer for the issuance of the writ of preliminary attachment, Phil-Air alleged that RCJ
Lines was guilty of fraud in entering into the sale transaction. A perusal of the record, however, would show
that Phil-Air failed to prove this bare assertion. This justifies an award of temperate or moderate damages in
the amount of Php 50,000.00.64
The allegation of breach
of express warranty was
notproved.
We are not convinced that Phil-Air breached its express warranty. RCJ Lines had no right to recoupment in
diminution of the price.65
The Civil Code defines an express warranty as any affirmation of fact or any promise by the seller relating
to the thing if the natural tendency of such affirmation or promise is to induce the buyer to purchase the
same, and if the buyer purchases the thing relying thereon.66
The question whether there was a breach of warranty is factual. Consequently, the Court should rely on the
factual findings of the CA and RTC, which are generally deemed binding and conclusive to the Court. More
so in a Rule 45 petition where only questions of law can be raised. Further, factual findings of the RTC,
when affirmed by the CA, are conclusive on the Court when supported by the evidence on record. 67
The evidence on record does not support the findings of the CA and RTC.
We emphasize that there are recognized cases where the Court can disregard the factual findings of the RTC
and CA. In these cases, the Court draws its own conclusion based on the evidence on record. 68
In this case, Phil-Air denies that it breached its express warranty and strongly argues that the CA and RTC
completely ignored its evidence while it sustained the bare allegations of Rolando Abadilla, Jr.
We agree with Phil-Air. Our examination of the record reveals that the RTC and CA manifestly overlooked
certain relevant facts not disputed by the parties which, if properly considered, would justify a different
conclusion.
To prove that Phil-Air breached its express warranty, RCJ Lines presented the following testimonial and
documentary evidence:chanRoblesvirtualLawlibrary
1) Rolando Abadilla, Jr. who claimed that their employees reported the defect of the units to him and to
his late father. His late father allegedly demanded Phil-Air to repair the defects. But despite repeated
verbal demands, Phil-Air purportedly failed to comply with its one-year warranty on parts and labor.
2) Two RCJ Lines employees who claimed that they experienced firsthand the inefficient cooling of the
units.
3) The general manager of Carrier Philippines who testified that the Carrier 240 model was not suitable
for buses with a capacity of more than 35 passengers, like those operated by RCJ Lines.
4) Summary of expenses, sales invoices, provisional receipts, and statements of accounts issued by other
 suppliers and shops (Car Cool Philippines, Inc. and Sta. Rosa Motor Works, Inc.) engaged by RCJ
Lines during the period of warranty to repair the defective units, amounting to P208,132.00
5) Commercial invoice for the $68,780.00 US Dollars worth of new units bought from another supplier
after the lapse of warranty to replace the units supplied by Phil-Air.69
In defense, Phil-Air claimed that it regularly checked the units and that during the effectivity of the one-year
warranty, RCJ Lines never once complained of defects; if there were defects, the latter should have
demanded Phil-Air to perform its warranty in writing; the reason it had no proof it made repairs and
delivered spare parts was precisely because it was not apprised of any defect; and that the testimonies of the
RCJ Lines witnesses were self-serving.70
The RTC noted that Phil-Air did not present evidence to rebut the allegation of breach. 71 Phil-Air instead
opposed the admission of the documentary evidence of RCJ Lines for failing to comply with the best
evidence rule.72
We hold that the evidence that RCJ Lines submitted failed to prove breach of express warranty.
As to the testimonial evidence
The testimonies of the RCJ Lines witnesses were self-serving and uncorroborated.
The claim of Rolando Abadilla, Jr. that his late father verbally communicated the defects of the units to Phil-
Air was hearsay and not admissible.73 He admitted that he was not around when his father phoned Phil-Air
to demand the repair of the units. He likewise admitted that they did not attempt to personally meet with nor
send a letter to Phil-Air to demand the repairs.74
More tellingly, Rolando Abadilla, Jr. admitted that they issued the post-dated checks to Phil-Air to cover the
balance of the purchase price sometime in 1992, viz-
Q. Mr. Witness is it not in this case that you personally issued three (3) checks draws against the name
Rolando Abadilla and Susan or Rolando Abadilla, and this was some time in 1992?
A. Yes, Sir.
Q. And you confirm that these were all dated March 31, April 30 and February 29, 1992?
A. Yes, Sir.
Q. Despite your claim that these air-conditioning units were defective and despite your claim that these
air-conditioning units were not repaired by plaintiff, hence you referred them for repair to other
companies who are not authorized, do you still affirm the fact that you issued the postdated checks,
the total of which is exactly the balance of the purchase price as quoted in the price quotation, yes or
no? [Emphasis supplied]
A. Yes, Sir.75
36
xxx
cralawlawlibrary
We note that the alleged repairs made by Car Cool Philippines, Inc. and Sta. Rosa Motor Works, Inc. started
in 1991.76 If RCJ Lines knew as early as 1991 that the units were defective and that Phil-Air refused to
perform its warranty despite repeated demands, we wonder why RCJ Lines still issued the post-dated checks
in 1992 to cover the balance of the purchase price.
The record also reveals that Car Cool Philippines, Inc. and Sta. Rosa Motor Works, Inc. were not authorized
by the Carrier brand to repair the units, a fact not denied by Rolando Abadilla, Jr. 77 It was likewise
established that some of the parts/items purportedly provided by the other suppliers were expressly excluded
from the list of parts/items that Phil-Air was supposed to supply, again, a fact admitted by Rolando Abadilla,
Jr.78 It was likewise unclear that the repairs made by the other service providers were done on the same
buses on which the subject units were installed.79
We also find glaring the fact that RCJ Lines did not respond to the April 7, 1992 demand letter sent by Phil-
Air, viz. -
Dear Mr. Abadilla,
I have been trying to get in touch with you and Junjun the past several weeks but have been unsuccessful
xxx The two checks that you used to partly pay for the four units bus air conditions [sic] were all dishonored
by the bank [because they were drawn against insufficient funds].
We are but a small company and our cash flow was adversely affected by the return of the checks, xxx It
would mean so much if you could somehow help us replenished these checks, xxx We look forward to
hearing from you Respectfully, we remain.
Yours truly,
Ricardo Cokieng
cralawlawlibrary
If RCJ Lines was aware all along that the units were defective and that Phil-Air refused to heed
its verbaldemands to make repairs, we do not understand why it ignored Phil-Air's written demand to
replenish the returned checks. We also find it unthinkable that RCJ Lines would spend for parts and services
from other suppliers and providers, during the period of warranty, without demanding first in writing that
Phil-Air make good its express warranty.
In this regard, we note that the right of the buyer to the recoupment in the diminution of the price under
Article 1599 (1) should be read together with Article 1586 of the Civil Code,80 which provides
that:chanRoblesvirtualLawlibrary
Art. 1586. In the absence of express or implied agreement of the parties, acceptance of the goods by the
buyer shall not discharge the seller from liability in damages or other legal remedy for breach of any
promise or warranty in the contract of sale. But, if, after acceptance of the goods, the buyer fails to give
notice to the seller of the breach in any promise of warranty within a reasonable time after the buyer
knows, or ought to know of such breach, the seller shall not be liable therefor.cralawlawlibrary
The obvious purpose of the notice is to protect the seller against belated claims. If the seller is not duly
notified, he is prevented from making prompt investigation to determine the cause and extent of his
liability.81 Consequently, he is barred from repairing or rectifying whatever defects the goods sold had.

RCJ Lines failed to convince us that it notified Phil-Air of the breach of warranty within a reasonable time.
In truth, we are not convinced at all that it had even notified Phil-Air. Although Article 1586 does not
require that the notice to the seller be in writing, we cannot accept the claim of Rolando Abadilla, Jr. that his
late father verbally notified Phil-Air of the defects, without violating the rule on hearsay.
Also, the testimonies of the two RCJ Lines employees that they experienced firsthand the insufficient
cooling of the units were self-serving and uncorroborated by a disinterested party.
counsel for RCJ Lines requested that the evidence be conditionally accepted and marked, which the trial
court granted.
Nowhere on record, however, was it ever established that the originals were later submitted. It was also not
shown that the originals were indeed lost, which could have justified the submission of secondary
evidence.84 The RTC simply ignored this fact when it finally decided the case.
Conclusion

Further, the reliance of the CA and the RTC on the testimony82 of the general manager of Carrier Philippines Based on the foregoing analysis, we find- that RCJ Lines failed to prove its allegation that Phil-Air breached
was misplaced and unwarranted. It appears that the computation of the cooling efficiency of the Carrier 240 its express warranty. RCJ Lines is thus held liable to pay the balance of the purchase price plus interest and
model was merely theoretical, based only on the specifications of the model and not on actual test, viz. — attorney's fees.85 RCJ Lines, however, is entitled to temperate damages as a result of the wrongful
attachment of its buses and to the refund of the premium payment for the counter-bond.
Q: Have you seen RCJ Bus?
WHEREFORE, in view of the foregoing, we hereby GRANT the petition. The September 15, 2010
A: I did see. decision of the Court of Appeals in CA-G.R. CV No. 85866 is REVERSED and SET ASIDE.
xxx ACCORDINGLY, RCJ Lines is DIRECTED to pay:
1. Eight Hundred Forty Thousand Pesos (P840,000.00) representing the unpaid balance of the
Q: With respect to car aircon Paris 240 installed, have you seen this bus? purchase price;
2. Interest of twelve percent (12%) per annum on the unpaid balance to be computed from November
A: No, I did not. 5, 199086 until June 30, 2013;
3. Interest of six percent (6%) per annum on the unpaid balance to be computed from July 1,
Q: Mr. Witness, this case involves a particular product a brand of the product that you did not try [sic] 2013,87 until fully paid;
but specifically Paris 240. Have you seen it personally, the four units installed? 4. Attorney's fees in the fixed amount of P30,000.00. 88
The total amount to be recovered shall further be subject to the legal interest rate of six percent (6 %) per
A: No I did not. annum from the finality of this decision until fully paid. 89

Q: Even one unit? The attachment bond posted by Phil-Air shall be levied upon to satisfy the P50,000.00 temperate damages
awarded to RCJ Lines and the P82,274.00 refund of the counter-bond premium.
A: No Sir.
SO ORDERED.chanroblesvirtuallawlibrary
cralawlawlibrary

The meat of his testimony centered not on the subject units but on the cooling capacity of the product that
Carrier Philippines was then selling in the market. In fact, he admitted that his role in the company had
nothing to do with repairs of air-conditioning units.

On this basis, we do not find his testimony conclusive as to the alleged breach of express warranty. It was
too tangential and speculative. We note that he was not even presented as an expert witness. Even if we
assume that the computation of the cooling capacity of the Carrier 240 was accurate, RCJ Lines still failed to
prove that it duly and promptly informed Phil-Air of the alleged breach.

On the documentary evidence

The pieces of documentary evidence submitted by RCJ Lines to prove breach of express warranty failed to
comply with the best evidence rule. It is established on record that the sales invoices and provisional receipts
issued by the other suppliers and service providers were mere photocopies. 83 The counsel of Phil-Air
objected to the admission of the secondary evidence without proof that the originals were indeed lost. The

37
G.R. No. 141853 February 7, 2001
TERESITA V. IDOLOR, petitioner,
vs.
HON. COURT OF APPEALS, SPS. GUMERSINDO DE GUZMAN and ILUMINADA DE GUZMAN and
HON. PRUDENCIO A. CASTILLO, JR., Presiding Judge, Regional Trial Court, National Capital Judicial
Region, Branch 220, Quezon City, respondents.
GONZAGA-REYES, J.:
This is a petition for review on certiorari filed by petitioner Teresita Idolor which seeks to set aside the
decision1 of the respondent Court of Appeals which reversed the Order2 of the Regional Trial Court of
Quezon City3 granting Idolor's prayer for the issuance of a writ of preliminary injunction and the resolution
denying petitioner's motion for reconsideration. 4
On March 21, 1994, to secure a loan of P520,000.00, petitioner Teresita Idolor executed in favor of private
respondent Gumersindo De Guzman a Deed of Real Estate Mortgage with right of extra-judicial foreclosure
upon failure to redeem the mortgage on or before September 20, 1994. The object of said mortgage is a 200-
square meter property with improvements located at 66 Ilocos Sur Street, Barangay Ramon Magsaysay,
Quezon City covered by TCT No. 25659.
On September 21, 1996, private respondent Iluminada de Guzman, wife of Gumersindo de Guzman, filed a
complaint against petitioner Idolor before the Office of the Barangay Captain of Barangay Ramon
Magsaysay, Quezon City, which resulted in a "Kasunduang Pag-aayos" which agreement is quoted in full5:
"Kami, ang (mga) may sumbong at (mga) ipinagsusumbong sa usaping binabanggit sa itaas, ay
nagkakasundo sa pamamagitan nito na ayusin ang aming alitan gaya ng sumusunod:
Na ako si Teresita V. Idolor of legal age ay nakahiram ng halagang P520,000.00 noong September 20,
1994.
Na ang nasabing halaga ay may nakasanlang titulo ng lupa (TCT No. 25659) under Registry receipt 3420
dated July 15, 1996.
Na ako si Teresita V. Idolor ay humihingi ng 90 days palugit (grace period) to settle the said amount.
Failure to settle the above account on or before December 21, 1996, I agree to execute a deed of sale with
the agreement to repurchase without interest within one year.
Total amount of P1,233,288.23 inclusive of interest earned.
At nangangako kami na tutupad na tunay at matapat sa mga katakdaan ng pag-aayos na inilahad sa itaas."
Petitioner failed to comply with her undertaking; thus private respondent Gumersindo filed a motion for
execution before the Office of the Barangay captain who subsequently issued a certification to file action.
On March 21, 1997, respondent Gumersindo De Guzman filed an extra judicial foreclosure of the real estate
mortgage pursuant to the parties agreement set forth in the real estate mortgage dated March 21, 1994.
On May 23, 1997, the mortgaged property was sold in a public auction to respondent Gumersindo, as the
highest bidder and consequently, the Sheriff's Certificate of Sale was registered with the Registry of Deeds
of Quezon City on June 23, 1997.
On June 25, 1998, petitioner filed with the Regional Trial Court of Quezon City, Branch 220, a complaint
for annulment of Sheriff's Certificate of Sale with prayer for the issuance of a temporary restraining order
(TRO) and a writ of preliminary injunction against private respondents, Deputy Sheriffs Marino Cachero
and Rodolfo Lescano and the Registry of Deeds of Quezon City alleging among others alleged irregularity
and lack of notice in the extra-judicial foreclosure proceedings subject of the real estate mortgage. In the
meantime, a temporary restraining order was issued by the trial court. 1âwphi1.nêt
On July 28, 1998, the trial court issued a writ of preliminary injunction enjoining private respondents, the
Deputy Sheriffs and the Registry of Deeds of Quezon City from causing the issuance of a final deed of sale
and consolidation of ownership of the subject property in favor of the De Guzman spouses. The trial court
denied the motion for reconsideration filed by the de Guzman spouses.
Spouses de Guzman filed with the respondent Court of Appeals a petition for certiorari seeking annulment
of the trial court's order dated July 28, 1998 which granted the issuance of a preliminary injunction.
38
On September 28, 1999, the respondent court granted the petition and annulled the assailed writ of
preliminary injunction. Teresita Idolor filed her motion for reconsideration which was denied in a resolution
dated February 4, 2000.
Hence this petition for review on certiorari filed by petitioner Teresita V. Idolor. The issues raised by
petitioner are: whether or not the respondent Court of Appeals erred in ruling (1) that petitioner has no more
proprietary right to the issuance of the writ of injunction, (2) that the "Kasunduang Pag-aayos" did not ipso
facto result innovation of the real estate mortgage, (3) that the "Kasunduang Pag-aayos" is merely a
promissory note of petitioner to private respondent spouses; and (4) that the questioned writ of preliminary
injunction was issued with grave abuse of discretion.
The core issue in this petition is whether or not the respondent Court erred in finding that the trial court
committed grave abuse of discretion in enjoining the private and public respondents from causing the
issuance of a final deed of sale and consolidation of ownership of the subject parcel of land in favor of
private respondents.
Petitioner claims that her proprietary right over the subject parcel of land was not yet lost since her right to
redeem the subject land for a period of one year had neither lapsed nor run as the sheriff's certificate of sale
was null and void; that petitioner and the general public have not been validly notified of the auction sale
conducted by respondent sheriffs; that the newspaper utilized in the publication of the notice of sale was not
a newspaper of general circulation.
We do not agree.
Injunction is a preservative remedy aimed at protecting substantive rights and interests. 6 Before an
injunction can be issued, it is essential that the following requisites be present: 1) there must be aright in
esse or the existence of a right to be protected; 2) the act against which the injunction is to be directed is a
violation of such right.7 Hence the existence of a right violated, is a prerequisite to the granting of an
injunction. Injunction is not designed to protect contingent or future rights. Failure to establish either the
existence of a clear and positive right which should be judicially protected through the writ of injunction or
that the defendant has committed or has attempted to commit any act which has endangered or tends to
endanger the existence of said right, is a sufficient ground for denying the injunction. 8 The controlling
reason for the existence of the judicial power to issue the writ is that the court may thereby prevent a
threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly
investigated and advisedly adjudicated.9 It is to be resorted to only when there is a pressing necessity to
avoid injurious consequences which cannot be remedied under any standard of compensation. 10
In the instant case, we agree with the respondent Court that petitioner has no more proprietary right to speak
of over the foreclosed property to entitle her to the issuance of a writ of injunction. It appears that the
mortgaged property was sold in a public auction to private respondent Gumersindo on May 23, 1997 and the
sheriff's certificate of sale was registered with the Registry of Deeds of Quezon City on June 23, 1997.
Petitioner had one year from the registration of the sheriff's sale to redeem the property but she failed to
exercise her right on or before June 23, 1998, thus spouses de Guzman are now entitled to a conveyance and
possession of the foreclosed property. When petitioner filed her complaint for annulment of sheriff's sale
against private respondents with prayer for the issuance of a writ of preliminary injunction on June 25, 1998,
she failed to show sufficient interest or title in the property sought to be protected as her right of redemption
had already expired on June 23, 1998, i.e. two (2) days before the filing of the complaint. It is always a
ground for denying injunction that the party seeking it has insufficient title or interest to sustain it, and no
claim to the ultimate relief sought - in other words, that she shows no equity.11 The possibility of irreparable
damage without proof of actual existing right is not aground for an injunction. 12
Petitioner's allegation regarding the invalidity of the sheriff's sale dwells on the merits of the case; We
cannot rule on the same considering that the matter should be resolved during the trial on the merits.
Petitioner next contends that the execution of the "Kasunduang Pag-aayos" dated September 21, 1996
between her and spouses de Guzman before the Office of the Lupon Tagapamayapa showed the express and
unequivocal intention of the parties to novate or modify the real estate mortgage; that a comparison of the
real estate mortgage dated March 21, 1994 and the "Kasunduang Pag-aayos" dated September 21, 1996 Notably, the provision in the "Kasunduang Pag-aayos" regarding the execution of a deed of sale with right
revealed the irreconciliable incompatibility between them, i.e., that under the first agreement, the amount to repurchase within one year would have the same effect as the extra-judicial foreclosure of the real estate
due was five hundred twenty thousand (P520,000) pesos only payable by petitioner within six (6) months, mortgage wherein petitioner was given one year from the registration of the sheriff's sale in the Registry of
after which it shall earn interest at the legal rate per annum and non-payment of which within the stipulated property to redeem the property, i.e., failure to exercise the right of redemption would entitle the purchaser
period, private respondents have the right to extra-judicially foreclose the real estate mortgage while under to possession of the property. It is not proper to consider an obligation novated by. unimportant
the second agreement, the amount due was one million two hundred thirty three thousand two hundred modifications which do not alter its essence.18 It bears stress that the period to pay the total amount of
eighty eight and 23/100 (P1,233,288.23) inclusive of interest, payable within 90 days and in. case of non petitioner's indebtedness inclusive of interest amounted to P1,233,288.23 expired on December 21, 1996 and
payment of the same on or before December 21, 1996, petitioner should execute a deed of sale with right to petitioner failed to execute a deed of sale with right to repurchase on the said date up to the time private
repurchase within one year without interest; that the second agreement "Kasunduang Pag-aayos" was a valid respondents filed their petition for extra-judicial foreclosure of real estate mortgage. The failure of petitioner
new contract as it was duly executed by the parties and it changed the principal conditions of petitioner's to comply with her undertaking in the "kasunduan" to settle her obligation effectively delayed private
original obligations. Petitioner insists that the "Kasunduang Pag-aayos" was not a mere promissory note respondents' right to extra-judicially foreclose the real estate mortgage which right accrued as far back as
contrary to respondent court's conclusion since it was entered by the parties before the Lupon 1994. Thus, petitioner has not shown that she is entitled to the equitable relief of injunction. 1âwphi1.nêt
Tagapamayapa which has the effect of a final judgment.13 WHEREFORE, the petition is DENIED. The decision of the respondent Court of Appeals dated September
We are not persuaded. 28, 1999 is hereby AFFIRMED.
Novation is the extinguishment of an obligation by the substitution or change of the obligation by a SO ORDERED.
subsequent one which terminates it, either by changing its objects or principal conditions, or by substituting
a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor. 14 Under
the law, novation is never presumed. The parties to a contract must expressly agree that they are abrogating
their old contract in favor of a new one.15 Accordingly, it was held that no novation of a contract had
occurred when the new agreement entered into between the parties was intended to give life to the old one.16
A review of the "Kasunduang Pag-aayos" which is quoted earlier does not support petitioner's contention
that it novated the real estate mortgage since the will to novate did not appear by express agreement of the
parties nor the old and the new contracts were incompatible in air points. In fact, petitioner expressly
recognized in the Kasunduan the existence and the validity of the old obligation where she acknowledged
her long overdue account since September 20, 1994 which was secured by a real estate mortgage and asked
for a ninety (90) days grace period to settle her obligation on or before December 21, 1996 and that upon
failure to do so, she will execute a deed of sale with a right to repurchase without interest within one year in
favor of private respondents. Where the parties to the new obligation expressly recognize the continuing
existence and validity of the old one, where, in other words, the parties expressly negated the lapsing of the
old obligation, there can be no novation.17 We find no cogent reason to disagree with the respondent court's
pronouncement as follows:
"In the present case. there exists no such express abrogation of the original undertaking. The agreement
adverted to (Annex 2 of Comment, p.75 Rollo) executed by the parties on September 21, 1996 merely
gave life to the March 21, 1994 mortgage contract which was then more than two years overdue.
Respondent acknowledged therein her total indebtedness in the sum of P1,233,288.23 including the
interests due on the unpaid mortgage loan which amount she promised to liquidate within ninety (90) days
or until December 21, 1996, failing which she also agreed to execute in favor of the .mortgagee a deed of
sale of the mortgaged property for the same amount w1thout interest. Evidently, it was executed to
facilitate easy compliance by respondent mortgagor with her mortgage obligation. It (the September 21,
1996 agreement) is not incompatible and can stand together with the mortgage contract of March 21, 1994.
A compromise agreement clarifying the total sum owned by a buyer with the view that he would find it
easier to comply with his obligations under the Contract to Sell does not novate said Contract to Sell (Rillo
v. Court of Appeals, 274 SCRA 461 [1997]).
Respondent correctly argues that the compromise agreement has the force and effect of a final judgment.
That precisely is the reason why petitioner resorted to the foreclosure of the mortgage on March 27, 1997,
after her failure to comply with her obligation which expired on December 21, 1996.
Reliance by private respondent upon Section 417 of the New Local Government Code of 1991, which
requires the lapse of six (6) months before the amicable settlement may be, enforced, is misplaced. The
instant case deals with extra judicial foreclosure governed by ACT No. 3135 as amended."

39
SECOND DIVISION
A.M. No. MTJ-00-1250 February 28, 2001
[Formerly OCA IPI No. 97-332-MTJ]
RIMEO S. GUSTILO, complainant,
vs.
HON. RICARDO S. REAL, SR., Presiding Judge, 2nd Municipal Circuit Trial Court of Victorias-Manapla,
Negros Occidental, respondent.
QUISUMBING, J.:
In a verified complaint1 dated June 15, 1997, Rimeo S. Gustilo charged respondent Judge Ricardo S. Real,
Sr., of the Municipal Circuit Trial Court of Victorias-Manapla, Negros Occidental with gross misconduct,
gross incompetence, gross ignorance of the law, and violation of the Anti-Graft and Corrupt Practices Act
relative to Civil Case No. 703-M entitled "Weddy C. Libo-on v. Rimeo S. Gustilo, et al. " for recounting of
ballots of Precinct Nos. 27 and 27-A, Barangay Punta Mesa, Manapla, Negros Occidental.
Complainant avers that he was a candidate for punong barangay of Barangay Punta Mesa, Manapla, Negros
Occidental in the May 12, 1997 elections. His lone opponent was Weddy C. Libo-on, then the
incumbent punong barangay and the representative of the Association of Barangay Captains (ABC) to
the Sangguniang Bayan of Manapla and the Sangguniang Panlalawigan of Negros Occidental. Both
complainant and Libo-on garnered eight hundred nineteen (819) votes during the elections, resulting in a tie.
The breaking of the tie by the Board of Canvassers was in complainant's favor and he was proclaimed duly
elected punong barangay of Punta Mesa, Manapla.2
On May 20, 1997, his opponent filed an election protest case, docketed as Civil Case No. 703-M, before the
MCTC of Victorias-Manapla, Negros Occidental. Libo-on sought the recounting of ballots in two precincts,
preliminary prohibitory injunction, and damages.1âwphi1.nêt
On May 21, 1997, respondent ordered the issuance of summons to the parties and set the hearing on June 6,
1997.3
On May 27, 1997, however, Libo-on filed a motion to advance the hearing to May 29 and 30, 1997.
The next day, respondent granted Libo-on's motion. The hearing was advanced to May 29 and 30, 1997
cancelling the hearing for June 6, 1997.4 Complainant avers that he was not furnished a copy of this Order
dated May 28, 1997.
On May 29, 1997, respondent judge issued a temporary restraining order (TRO) and annulled the
proclamation of complainant as the duly elected punong barangay of Punta Mesa, Manapla.5 Complainant
declares that no copy of this Order dated May 29, 1997 was served on him. That same day, however, he was
able to secure copies of the orders of respondent dated May 28 and May 29, 1997 from the COMELEC
Registrar of Manapla, Negros Occidental and the Department of Interior and Local Government (DILG).
Moreover, it was only in the afternoon of May 29, 1997 that complainant received a copy of Libo-on's
petition in Civil Case No. 703-M and respondent's Order dated May 21, 1997.
On May 30, 1997, complainant took his oath of office as punong barangay.6 That same day, he also filed a
petition for certiorari before the Regional Trial Court of Silay City, Negros Occidental, Branch 69 docketed
as Special Civil Action No. 1936-69.
On June 5, 1997, the RTC lifted the TRO issued by respondent and declared as null and void the order
nullifying complainant's proclamation as duly elected punong barangay.7
Believing that respondent could not decide Civil Case No. 703-M impartially, complainant moved for his
inhibition.
On June 11, 1997, respondent denied complainant's motion for inhibition and after hearing Libo-on's motion
for permanent injunction, issued a second TRO "to maintain the status quo between the contending parties."8
Complainant argues that by issuing the second TRO, respondent reversed the order of the RTC of Silay City
dated June 5, 1997. He also claims that by preventing him from assuming office, he was excluded by the
DILG from participating in the election of the Liga ng Mga Barangay on June 14, 1997.
40
In his Comment, respondent denied the allegations. He claimed that when Libo-on filed his motion to
advance the hearing of the prayer for injunction on May 27, 1997 in Civil Case No. 703-M, complainant was
served a copy by registered mail as shown by the registry receipts attached to said motion. Considering the
urgency of the matter and since there was substantial compliance with due process, he issued the Order of
May 28, 1997 which cancelled the hearing set for June 6, 1997 and advanced it to May 29 and 30, 1997.
Respondent claims that on May 29, 1997, Libo-on and his counsel appeared but complainant did not, despite
due notice. The hearing then proceeded, with Libo-on presenting his evidence. As a result, he issued the
TRO prayed for and annulled complainant's proclamation. Respondent admits that the Order of May 29,
1997, particularly the annulment of complainant's proclamation, was outside the jurisdiction of his court.
But since the COMELEC ignored Libo-on's petition for correction of erroneous tabulation and Libo-on had
no other remedy under the law, he was constrained to annul complainant's proclamation, which from the
very beginning was illegal. He justified his action by our rulings in Bince, Jr. v. COMELEC, 312 Phil. 316
(1995) and Tatlonghari v. COMELEC, 199 SCRA 849 (1991), which held that a faulty tabulation cannot be
the basis of a valid proclamation.
Respondent also faults the RTC of Silay City for issuing the Order dated June 5, 1997, which lifted the TRO
he issued and declared void his nullification of complainant's proclamation. Respondent contends that
complainant should first have exhausted all remedies in his court before resorting to the special civil action
for certiorari with the RTC. The latter court, in turn, should have dismissed the action for certiorari for
failure to exhaust judicial remedies.
With respect to his Order of June 11, 1997, respondent explains that it was never meant to reverse the Order
of the RTC of Silay City dated June 5, 1997. He points out that both parties in Civil Case No. 703-M were
present during the hearing after due notice. After receiving their evidence, he found that unless a TRO was
issued, Libo-on would suffer a grave injustice and irreparable injury .He submits that absent fraud,
dishonesty, or corruption, his acts, even if erroneous, are not the subject of disciplinary action.
In its evaluation and recommendation report dated November 29, 1999, the Office of the Court
Administrator (OCA) found that respondent's errors were not honest mistakes in the performance of his
duties. Rather, his actions showed a bias in favor of Libo-on and "evinced a pattern to prevent the
complainant from assuming office as the duly elected punong barangay despite his having been proclaimed
as such by the Board of Canvassers." The OCA recommends that respondent be fined P20,000.00 and
warned that a repetition of similar acts in the future will be dealt with more severely.
Supreme Court Administrative Circular No. 20-95 provides:
2. The application for a TRO shall be acted upon only after all parties are heard in a summary
hearingconducted within twenty-four (24) hours after the records are transmitted to the branch
selected by raffle. The records shall be transmitted immediately after raffle (Emphasis supplied).
xxx
4. With the exception of the provisions which necessarily involve multiple-sala stations, these rules
shall apply to single-sala stations especially with regard to immediate notice to all parties of all
applications for TRO.
The foregoing clearly show that whenever an application for a TRO is filed, the court may act on the
application only after all parties have been notified and heard in a summary hearing. In other words, a
summary hearing may not be dispensed with.9 In the instant case, respondent admits that he issued the
injunctive writ sought on May 29, 1997 after receiving the applicant's evidence ex parte. His failure to abide
by Administrative Circular No. 20-95 in issuing the first TRO is grave abuse of authority, misconduct, and
conduct prejudicial to the proper administration of justice.
Worse, he compounded the infraction by annulling complainant's proclamation as the duly elected punong
barangay of Punta Mesa, Manapla and prohibiting him from assuming office. Respondent admits that his
court was not vested with the power or jurisdiction to annul the proclamation, but seeks to justify his action
on the ground that the proclamation was void ab initio. In so doing, respondent wantonly usurped a power
exclusively vested by law in the COMELEC.10 A judge is expected to know the jurisdictional boundaries of
courts and quasi-judicial bodies like the COMELEC as mapped out by the Constitution and statutes and to bias and partiality. Accordingly, a fine of Twenty Thousand Pesos (P20,000.00) is hereby imposed upon
act only within said limits. A judge who wantonly arrogates unto himself the authority and power vested in respondent with a STERN WARNING that a repetition of the same or similar acts will be dealt with more
other agencies not only acts in oppressive disregard of the basic requirements of due process, but also severely.
creates chaos and contributes to confusion in the administration of justice. Respondent, in transgressing the SO ORDERED.
jurisdictional demarcation lines between his court and the COMELEC, clearly failed to realize the position
that his court occupies in the interrelation and operation of the country's justice system. He displayed a
marked ignorance of basic laws and principles. Rule 3.01 of the Code of Judicial Conduct provides that a
"judge shall be faithful to the law and maintain professional competence." By annulling complainant's
proclamation as the duly elected punong barangay, despite being aware of the fact that his court had no
power to do so, not only is respondent guilty of grave' abuse of authority, he also manifests unfaithfulness to
a basic legal rule as well as injudicious conduct.
Moreover, in willfully nullifying complainant's proclamation despite his court's want of authority,
respondent knowingly issued an unjust order.
Note that the RTC of Silay City corrected respondent's errors by declaring null and void his Order dated
May 29, 1997. Nonetheless, he compounded his previous errors of judgment by proceeding to hear Libo-
on's motion for permanent injunction and issuing a second TRO on June 11, 1997 on the ground that
"extreme urgency" and "grave injustice and irreparable injury will arise" if no injunctive remedy were
granted. Respondent insists that his act did not reverse the Order of the RTC in Special Civil Action
No.1936-69, since the second TRO he issued satisfied the notice and hearing requirements of Circular No.
20-95.
Before an injunctive writ can be issued, it is essential that the following requisites be present: (1) there must
be aright in esse or the existence of a right to be protected; and (2) the act against which injunction to be
directed is a violation of such right.11 The onus probandi is on movant to show that there exists a right to be
protected, which is directly threatened by the act sought to be enjoined. Further, there must be a showing
that the invasion of the right is material and substantial and that there is an urgent and paramount necessity
for the writ to prevent a serious damage.12 In this case, complainant had been duly proclaimed as the
winning candidate for punong barangay. He had taken his oath of office. Unless his election was annulled,
he was entitled to all the rights of said office. We do not see how the complainant's exercise of such rights
would cause an irreparable injury or violate the right of the losing candidate so as to justify the issuance of a
temporary restraining order "to maintain the status quo." We see no reason to disagree with the finding of
the OCA that the evident purpose of the second TRO was to prevent complainant from participating in the
election of the Liga ng mga Barangay. Respondent must be held liable for violating Rule 3.02 of the Code
of Judicial Conduct which provides that, "In every case, a judge shall endeavor diligently to ascertain the
facts and the applicable law unswayed by partisan interests, public opinion, or fear of criticism."
In a similar case, a judge was fined P5,000.00 for failure to observe the requirements of Administrative
Circular No. 20-95 when he issued a TRO enjoining a duly proclaimed barangay captain from participating
in the elections of officers of the ABC of Tart, Eastern Samar.13 Note, however, that in the instant case, the
respondent's infractions are not limited to the mere issuance of a restraining order without conducting the
summary conference required by Administrative Circular No. 20-95. He also annulled the proclamation of
the complainant knowing very well that he had no such authority. When his first restraining order was set
aside and nullification of complainant's proclamation was declared null and void by the RTC of Silay City, a
superior court, he again issued a TRO, which showed his partiality to complainant's political rival.
Respondent is thus guilty of violating Rules 3.01 and 3.02 of the Code of Judicial Conduct; knowingly
rendering an unjust order; gross ignorance of the law or procedure; as well as bias and partiality. All of the
foregoing are serious charges under Rule 140, Section 3 of the Rules of Court. We agree with the sanction
recommended by the OCA, finding it to be in accord with Rule 140, Section 10 (A) of the Rules of
Court.1âwphi1.nêt
WHEREFORE, this COURT finds respondent judge GUILTY of violating Rules 3.01 and 3.02 of the Code
of Judicial Conduct, knowingly rendering an unjust order, gross ignorance of the law and procedure, and

41
SECOND DIVISION also observed that the misconduct was not directed against a co-employee who just happened to be
MICHAEL J. LAGROSAS, G.R. No. 168637 accidentally hit in the process. Nevertheless, Labor Arbiter Hernandez imposed a penalty of three months
Petitioner, Present: suspension or forfeiture of pay to remind Lagrosas not to be carried away by the mindless dictates of his
- versus - Quisumbing, J., Chairperson, passion. Thus, the Arbiter ruled:
BRISTOL-MYERS SQUIBB (PHIL.), INC./MEAD Carpio Morales, WHEREFORE, premises considered, judgment is hereby [rendered] finding that respondent company
JOHNSON PHIL., RICHARD SMYTH as General Manager Tinga, illegally dismissed complainant thus, ORDERING it:
and FERDIE SARFATI, as Medical Sales Director, VELASCO, JR., and 1) [t]o reinstate him to his former position without loss of seniority rights, privileges and benefits and to pay
Respondents. BRION, JJ. him full backwages reckoned from [the] date of his illegal dismissal on 23 March 2000 including the
x- - - - - - - - - - - - - - - - - - - - - - - - - -x monetary value of his vacation/sick leave of 16 days per year reckoned from July 1, 2000 until actually
BRISTOL-MYERS SQUIBB (PHIL.), G.R. No. 170684 reinstated, less three (3) months salary as penalty for his infraction;
INC./MEAD JOHNSON PHIL., 2) to pay him the monetary equivalent of his accrued and unused combined sick/vacation leaves as of June
Petitioner, 30, 2000 of 16 days x 3 years and 4 months – 10 days x P545.45 = P23,636.16 and the present fair market
- versus - value of his Team Share stock option grant for eight hundred (800) BMS common shares of stock listed in
the New York Stock Exchange which vested in complainant as of 01 July 1997, provisionally computed as
COURT OF APPEALS and MICHAEL J. LAGROSAS, Promulgated:
90% (800 shares x US$40.00 per share x P43.20/US$ = P1,244,160.00).
Respondents. September 12, 2008
3) to pay him Attorney’s fee of 10% on the entire computable amount.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
All other claims of complainant are dismissed for lack of merit.
DECISION
SO ORDERED.10
QUISUMBING, J.:
On appeal, the National Labor Relations Commission (NLRC) set aside the Decision of Labor Arbiter
Before this Court are two consolidated petitions. The first petition, docketed as G.R. No. 168637, filed by
Hernandez in its Decision11 dated September 24, 2002. It held that Lagrosas was validly dismissed for
Michael J. Lagrosas, assails the Decision1 dated January 28, 2005 and the Resolution 2 dated June 23, 2005
serious misconduct in hitting his co-employee and another person with a metal steering wheel lock. The
of the Court of Appeals in CA-G.R. SP No. 83885. The second petition, docketed as G.R. No. 170684, filed
gravity and seriousness of his misconduct is clear from the fact that he deliberately waited for Lim and
by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil., assails the Resolutions 3 dated August 12, 2005
Menquito to return to McDonald’s. The NLRC also ruled that the misconduct was committed in connection
and October 28, 2005 of the Court of Appeals in CA-G.R. SP No. 83885.
with his duty as Territory Manager since it occurred immediately after the district meeting of territory
The facts are undisputed.
managers.
Michael J. Lagrosas was employed by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil. from January
Lagrosas moved for reconsideration. On May 7, 2003, the NLRC issued a Resolution 12 reversing its earlier
6, 1997 until March 23, 2000 as Territory Manager in its Medical Sales Force Division.4
ruling. It ratiocinated that the incident was not work-related since it occurred only after the district meeting
On February 4, 2000, Ma. Dulcinea S. Lim, also a Territory Manager and Lagrosas’ former girlfriend,
of territory managers. It emphasized that for a serious misconduct to merit dismissal, it must be connected
attended a district meeting of territory managers at McDonald’s Alabang Town Center. After the meeting,
with the employee’s work. The dispositive portion of the Resolution states:
she dined out with her friends. She left her car at McDonald’s and rode with Cesar R. Menquito, Jr. When
WHEREFORE, premises considered, We find this time no reason to alter the Labor Arbiter’s Decision of
they returned to McDonald’s, Lim saw Lagrosas’ car parked beside her car. Lim told Menquito not to stop
February 28, 2002 and hereby affirm the same in toto. We vacate our previous Decision of September 24,
his car but Lagrosas followed them and slammed Menquito’s car thrice. Menquito and Lim alighted from
2002.
the car. Lagrosas approached them and hit Menquito with a metal steering wheel lock. When Lim tried to
SO ORDERED.13
intervene, Lagrosas accidentally hit her head.
Bristol-Myers filed a motion for reconsideration which the NLRC denied in an Order dated February 4,
Upon learning of the incident, Bristol-Myers required Lagrosas to explain in writing why he should not be
2004 in NLRC NCR Case No. 00-03-02821-99 (NLRC NCR CA No. 031646-02).14 Later, Labor Arbiter
dismissed for assaulting a co-employee outside of business hours. While the offense is not covered by the
Hernandez issued a writ of execution.15 Notices of garnishment were then served upon the Philippine British
Code of Discipline for Territory Managers, the Code states that "other infractions not provided for herein
Assurance Co., Inc. for the supersedeas bond posted by Bristol-Myers and the Bank of the Philippine Islands
shall be penalized in the most appropriate manner at the discretion of management." 5 In his memo, Lagrosas
for the balance of the judgment award.16
admitted that he accidentally hit Lim when she tried to intervene. He explained that he did not intend to hit
Bristol-Myers moved to quash the writ of execution contending that it timely filed a petition for certiorari
her as shown by the fact that he never left the hospital until he was assured that she was all right. 6
with the Court of Appeals. The appellate court gave due course to Bristol-Myers’ petition and issued a
In the disciplinary hearing that followed, it was established that Lagrosas and Lim had physical
temporary restraining order (TRO)17enjoining the enforcement of the writ of execution and notices of
confrontations prior to the incident. But Lagrosas denied saying that he might not be able to control himself
garnishment. Upon the expiration of the TRO, the appellate court issued a writ of preliminary injunction
and hurt Lim and her boyfriend if he sees them together.
dated September 17, 2004.18
On March 23, 2000, Bristol-Myers dismissed Lagrosas effective immediately.7 Lagrosas then filed a
Bristol-Myers then moved to discharge and release the TRO cash bond. It argued that since it has posted an
complaint8 for illegal dismissal, non-payment of vacation and sick leave benefits, 13th month pay, attorney’s
injunction cash bond, the TRO cash bond should be legally discharged and released.
fees, damages and fair market value of his Team Share Stock Option Grant.
On January 28, 2005, the appellate court rendered the following Decision:
On February 28, 2002, Labor Arbiter Renaldo O. Hernandez rendered a Decision 9 in NLRC NCR Case No.
WHEREFORE, the petition is GRANTED. The Resolution of May 7, 2003 and the Order of February 4,
00-03-02821-99, declaring the dismissal illegal. He noted that while Lagrosas committed a misconduct, it
2004 in NLRC NCR Case No. [00-03-02821-99] (NLRC NCR CA No. [031646-02]), are REVERSED and
was not connected with his work. The incident occurred outside of company premises and office hours. He
SET ASIDE. The public respondent NLRC’s Decision dated September 24, 2002 which reversed the Labor

42
Arbiter’s decision and in effect sustained the legality of the private respondent’s termination and the
dismissal of his claim for the fair market value of the [Team Share] stock option grant is REINSTATED and
AFFIRMED, with MODIFICATION that the petitioner shall pay the private respondent the monetary
equivalent of his accrued and unused combined sick/vacation leave plus ten (10%) percent thereof, as
attorney’s fees. The injunction bond and the TRO bond previously posted by the petitioner
are DISCHARGED.
SO ORDERED.19
The appellate court considered the misconduct as having been committed in connection with Lagrosas’ duty
as Territory Manager since it occurred immediately after the district meeting of territory managers. It also
held that the gravity and seriousness of the misconduct cannot be denied. Lagrosas employed such a degree
of violence that caused damage not only to Menquito’s car but also physical injuries to Lim and Menquito.
Lagrosas filed a motion for reconsideration which the appellate court denied.
In the meantime, Bristol-Myers moved to release the TRO cash bond and injunction cash bond in view of
the Decision dated January 28, 2005. On August 12, 2005, the appellate court denied the motion as
premature since the decision is not yet final and executory due to Lagrosas’ appeal to this Court. 20
Bristol-Myers filed a motion for reconsideration. On October 28, 2005, the appellate court resolved:
WHEREFORE, the petitioner’s Motion [f]or Reconsideration dated September 6, 2005 is PARTIALLY
GRANTED and the Resolution of August 12, 2005 is RECONSIDERED and SET ASIDE. The temporary
restraining order cash bond in the amount of SIX HUNDRED THOUSAND PESOS (P600,000.00) which
was posted by the petitioners on July 19, 2004 is ordered DISCHARGED and RELEASED to the
petitioners.
SO ORDERED.21
The appellate court held that upon the expiration of the TRO, the cash bond intended for it also expired.
Thus, the discharge and release of the cash bond for the expired TRO is proper. But the appellate court
disallowed the discharge of the injunction cash bond since the writ of preliminary injunction was issued
pendente lite. Since there is a pending appeal with the Supreme Court, the Decision dated January 28, 2005
is not yet final and executory.
Hence, the instant petitions.
In G.R. No. 168637, Lagrosas assigns the following errors:
I.
…the Honorable Court of Appeals in declaring that the termination of employment of the petitioner-
appellant was legal had decided a question of substance in a way not in accord with the labor laws and
jurisprudence and departed from the accepted and usual course of judicial proceedings, as to call for the
exercise of this Honorable Court’s power of review and/or supervision.
II.
…the Honorable Court of Appeals in imposing the penalty of dismissal, being a penalty too harsh in this
case, decided a question of substance in a way not in accord with the labor laws and jurisprudence and
departed from the accepted and usual course of judicial proceedings, as to call for the exercise of this
Honorable Court’s power of review and/or supervision.22
In G.R. No. 170684, Bristol-Myers raises the following issue:
[Whether or not the Honorable] Court of Appeals committed grave abuse of discretion amounting to lack or
excess of jurisdiction in disallowing the release and discharge of petitioner’s injunction bond. 23
Simply put, the basic issues in the instant petitions are: (1) Did the Court of Appeals err in finding the
dismissal of Lagrosas legal? and (2) Did the Court of Appeals err in disallowing the discharge and release of
the injunction cash bond?
On the first issue, serious misconduct as a valid cause for the dismissal of an employee is defined simply as
improper or wrong conduct. It is a transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment.
To be serious within the meaning and intendment of the law, the misconduct must be of such grave and
43
aggravated character and not merely trivial or unimportant. However serious such misconduct, it must,
nevertheless, be in connection with the employee’s work to constitute just cause for his separation. The act
complained of must be related to the performance of the employee’s duties such as would show him to be
unfit to continue working for the employer.24
Thus, for misconduct or improper behavior to be a just cause for dismissal, it (a) must be serious; (b) must
relate to the performance of the employee’s duties; and (c) must show that the employee has become unfit to
continue working for the employer.25
Tested against the foregoing standards, it is clear that Lagrosas was not guilty of serious misconduct. It may
be that the injury sustained by Lim was serious since it rendered her unconscious and caused her to suffer
cerebral contusion that necessitated hospitalization for several days. But we fail to see how such misconduct
could be characterized as work-related and reflective of Lagrosas’ unfitness to continue working for Bristol-
Myers.
Although we have recognized that fighting within company premises may constitute serious misconduct, we
have also held that not every fight within company premises in which an employee is involved would
automatically warrant dismissal from service.26 More so, in this case where the incident occurred outside of
company premises and office hours and not intentionally directed against a co-employee, as hereafter
explained.
First, the incident occurred outside of company premises and after office hours since the district meeting of
territory managers which Lim attended at McDonald’s had long been finished. McDonald’s may be
considered an extension of Bristol-Myers’ office and any business conducted therein as within office hours,
but the moment the district meeting was concluded, that ceased too. When Lim dined with her friends, it was
no longer part of the district meeting and considered official time. Thus, when Lagrosas assaulted Lim and
Menquito upon their return, it was no longer within company premises and during office hours. Second,
Bristol-Myers itself admitted that Lagrosas intended to hit Menquito only. In the Memorandum 27 dated
March 23, 2000, it was stated that "You got out from your car holding an umbrella steering wheel lock and
proceeded to hit Mr. Menquito. Dulce tried to intervene, but you accidentally hit her on the head, knocking
her unconscious."28 Indeed, the misconduct was not directed against a co-employee who unfortunately got
hit in the process. Third, Lagrosas was not performing official work at the time of the incident. He was not
even a participant in the district meeting. Hence, we fail to see how his action could have reflected his
unfitness to continue working for Bristol-Myers.
In light of Bristol-Myers’ failure to adduce substantial evidence to prove that Lagrosas was guilty of serious
misconduct, it cannot use this ground to justify his dismissal. Thus, the dismissal of Lagrosas’ employment
was without factual and legal basis.
On the second issue, it is settled that the purpose of a preliminary injunction is to prevent threatened or
continuous irremediable injury to some of the parties before their claims can be thoroughly studied and
adjudicated. Its sole aim is to preserve the status quo until the merits of the case can be heard fully. 29
A preliminary injunction may be granted only when, among other things, the applicant, not explicitly
exempted, files with the court where the action or proceeding is pending, a bond executed to the party or
person enjoined, in an amount to be fixed by the court, to the effect that the applicant will pay such party or
person all damages which he may sustain by reason of the injunction or temporary restraining order if the
court should finally decide that the applicant was not entitled thereto. Upon approval of the requisite bond, a
writ of preliminary injunction shall be issued.30
The injunction bond is intended as a security for damages in case it is finally decided that the injunction
ought not to have been granted. Its principal purpose is to protect the enjoined party against loss or damage
by reason of the injunction, and the bond is usually conditioned accordingly. 31
In this case, the Court of Appeals issued the writ of preliminary injunction to enjoin the implementation of
the writ of execution and notices of garnishment "pending final resolution of this case or unless the [w]rit is
sooner lifted by the Court."32
By its Decision dated January 28, 2005, the appellate court disposed of the case by granting Bristol-Myers’
petition and reinstating the Decision dated September 24, 2002 of the NLRC which dismissed the complaint
for dismissal. It also ordered the discharge of the TRO cash bond and injunction cash bond. Thus, both
conditions of the writ of preliminary injunction were satisfied.
Notably, the appellate court ruled that Lagrosas had no right to the monetary awards granted by the labor
arbiter and the NLRC, and that the implementation of the writ of execution and notices of garnishment was
properly enjoined. This in effect amounted to a finding that Lagrosas did not sustain any damage by reason
of the injunction. To reiterate, the injunction bond is intended to protect Lagrosas against loss or damage by
reason of the injunction only. Contrary to Lagrosas’ claim, it is not a security for the judgment award by the
labor arbiter.33
Considering the foregoing, we hold that the appellate court erred in disallowing the discharge and release of
the injunction cash bond.
WHEREFORE, the two consolidated petitions are GRANTED. In G.R. No. 168637, filed by Michael J.
Lagrosas, the Decision dated January 28, 2005, and the Resolution dated June 23, 2005 of the Court of
Appeals in CA-G.R. SP No. 83885 are REVERSED. The Resolution dated May 7, 2003, and the Order
dated February 4, 2004 of the NLRC in NLRC NCR Case No. 00-03-02821-99 (NLRC NCR CA No.
031646-02) are REINSTATED and hereby AFFIRMED.
In G.R. No. 170684, filed by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil., the Resolutions dated
August 12, 2005 and October 28, 2005 of the Court of Appeals in CA-G.R. SP No. 83885 are REVERSED.
The injunction cash bond in the amount of SIX HUNDRED THOUSAND PESOS (P600,000) which was
posted by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil. on September 17, 2004 is hereby ordered
DISCHARGED and RELEASED to it.
No pronouncement as to costs.
SO ORDERED.

44
 Manila
SECOND DIVISION
G.R. No. 172138 September 8, 2010
NELSON JENOSA and his son NIÑO CARLO JENOSA, SOCORRO CANTO and her son PATRICK
CANTO, CYNTHIA APALISOK and her daughter CYNDY APALISOK, EDUARDO VARGAS and his
son CLINT EDUARD VARGAS, and NELIA DURO and her son NONELL GREGORY
DURO, Petitioners,
vs.
REV. FR. JOSE RENE C. DELARIARTE, O.S.A., in his capacity as the incumbent Principal of the High
School Department of the University of San Agustin, and the UNIVERSITY OF SAN AGUSTIN, herein
represented by its incumbent President REV. FR. MANUEL G. VERGARA, O.S.A., Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the 16 June 2005 Decision2 and 22 March 20063 Resolution of the Court of
Appeals in CA-G.R. SP No. 78894. In its 16 June 2005 Decision, the Court of Appeals granted the petition
of respondents University of San Augustin (University), represented by its incumbent President Rev. Fr.
Manuel G. Vergara, O.S.A. (University President), and Rev. Fr. Jose Rene C. Delariarte, O.S.A. (Principal),
in his capacity as the incumbent Principal of the High School Department of the University (respondents)
and ordered the dismissal of Civil Case Nos. 03-27460 and 03-27646 for lack of jurisdiction over the subject
matter. In its 22 March 2006 Resolution, the Court of Appeals denied the motion for reconsideration of
petitioners Nelson Jenosa and his son Niño Carlo Jenosa, Socorro Canto and her son Patrick Canto, Cynthia
Apalisok and her daughter Cyndy Apalisok, Eduardo Vargas and his son Clint Eduard Vargas, and Nelia
Duro and her son Nonell Gregory Duro (petitioners).
The Facts
On 22 November 2002, some students of the University, among them petitioners Niño Carlo Jenosa, Patrick
Canto, Cyndy Apalisok, Clint Eduard Vargas, and Nonell Gregory Duro (petitioner students), were caught
engaging in hazing outside the school premises.1awphi1 The hazing incident was entered into the blotter of
the Iloilo City Police.4
Thereafter, dialogues and consultations were conducted among the school authorities, the apprehended
students and their parents. During the 28 November 2002 meeting, the parties agreed that, instead of the
possibility of being charged and found guilty of hazing, the students who participated in the hazing incident
as initiators, including petitioner students, would just transfer to another school, while those who
participated as neophytes would be suspended for one month. The parents of the apprehended students,
including petitioners, affixed their signatures to the minutes of the meeting to signify their conformity. 5 In
view of the agreement, the University did not anymore convene the Committee on Student Discipline
(COSD) to investigate the hazing incident.
On 5 December 2002, the parents of petitioner students (petitioner parents) sent a letter to the University
President urging him not to implement the 28 November 2002 agreement.6 According to petitioner parents,
the Principal, without convening the COSD, decided to order the immediate transfer of petitioner students.
On 10 December 2002, petitioner parents also wrote a letter to Mrs. Ida B. Endonila, School Division
Superintendent, Department of Education (DepEd), Iloilo City, seeking her intervention and prayed that
petitioner students be allowed to take the home study program instead of transferring to another school. 7 The
DepEd asked the University to comment on the letter.8 The University replied and attached the minutes of
the 28 November 2002 meeting.9
On 3 January 2003, petitioners filed a complaint for injunction and damages with the Regional Trial Court,
Branch 29, Iloilo City (trial court) docketed as Civil Case No. 03-27460.10 Petitioners assailed the
Principal’s decision to order the immediate transfer of petitioner students as a violation of their right to due
process because the COSD was not convened.
45
On 5 February 2003, the trial court issued a writ of preliminary injunction and directed respondents to admit
petitioner students during the pendency of the case. 11 The 5 February 2003 Order reads:
WHEREFORE, let [a] Writ of Preliminary Mandatory Injunction issue. The defendants are hereby directed
to allow the plaintiff’s minor children to attend their classes during the pendency of this case, without
prejudice to any disciplinary proceeding to which any or all of them may be liable.
SO ORDERED.12
Respondents filed a motion for reconsideration and asked for the dissolution of the writ. The trial court
denied respondents’ motion. Respondents complied but with reservations.
On 25 March 2003, respondents filed a motion to dismiss. Respondents alleged that the trial court had no
jurisdiction over the subject matter of the case and that petitioners were guilty of forum shopping. On 19
May 2003, the trial court denied respondents’ motion. Respondents filed a motion for reconsideration.
On 21 April 2003, petitioners wrote the DepEd and asked that it direct the University to release the report
cards and other credentials of petitioner students. 13 On 8 May 2003, the DepEd sent a letter to the University
advising it to release petitioner students’ report cards and other credentials if there was no valid reason to
withhold the same.14On 14 May 2003, the DepEd sent another letter to the University to follow-up
petitioners’ request.15 On 20 May 2003, the University replied that it could not release petitioner students’
report cards due to their pending disciplinary case with the COSD. 16
On 28 May 2003, petitioners filed another complaint for mandatory injunction praying for the release of
petitioner students’ report cards and other credentials docketed as Civil Case No. 03-27646.17
The trial court consolidated the two cases.18
On 17 June 2003, the trial court issued a writ of preliminary injunction and directed the University to release
petitioner students’ report cards and other credentials. 19 Respondents filed a motion for reconsideration.
Respondents alleged that they could not comply with the writ because of the on-going disciplinary case
against petitioner students.
On 26 June 2003, the COSD met with petitioners for a preliminary conference on the hazing incident. On 7
July 2003, the University, through the COSD, issued its report finding petitioner students guilty of hazing.
The COSD also recommended the exclusion of petitioner students from its rolls effective 28 November
2002.
On 14 July 2003, the trial court issued an Order denying both motions for reconsideration. 20
On 1 September 2003, respondents filed a special civil action for certiorari with the Court of Appeals.
Respondents insisted that the trial court had no jurisdiction over the subject matter of Civil Case Nos. 03-
27460 and 03-27646. Respondents also alleged that petitioners were guilty of forum shopping.
The Ruling of the Court of Appeals
In its 16 June 2005 Decision, the Court of Appeals granted respondents’ petition and ordered the trial court
to dismiss Civil Case Nos. 03-27460 and 03-27646 for lack of jurisdiction over the subject matter because of
petitioners’ failure to exhaust administrative remedies or for being premature. According to the Court of
Appeals, petitioners should have waited for the action of the DepEd or of the University President before
resorting to judicial action. The Court of Appeals held:
From the foregoing, it is clear that the court a quo committed grave [abuse] of discretion amounting to
LACK OF JURISDICTION in INTERFERING, pre-maturely, with the exclusive and inherent authority of
educational institutions to discipline.
In directing herein petitioners [respondents in this case] to re-admit herein private respondents [petitioners in
this case] and eventually, to release the report cards and other school credentials, prior to the action of the
President of USA and of the recommendation of the COSD, the court a quo is guilty of improper judicial
intrusion by encroaching into the exclusive prerogative of educational institutions. 21
Petitioners filed a motion for reconsideration.22 In its 22 March 2006 Resolution, the Court of Appeals
denied petitioners’ motion for lack of merit.
The Issues
Petitioners raise the following issues:
 1. Was the Court of Appeals correct in holding that Branch 29 of the Regional Trial Court of Iloilo
City in Civil Case Nos. 03-27460 and 03-27646 did not acquire jurisdiction over the subject matter
of this case for failure of petitioners to exhaust administrative remedies?
2. Was the recommendation/report/order of the Committee on Student Discipline dated 7 July 2003
valid, and did it justify the order of exclusion of petitioner students retroactive to 28 November
2002?23
The Ruling of the Court
The petition has no merit.
Discipline in education is specifically mandated by the 1987 Constitution which provides that all
educational institutions shall "teach the rights and duties of citizenship, strengthen ethical and spiritual
values, develop moral character and personal discipline."24 Schools and school administrators have the
authority to maintain school discipline25 and the right to impose appropriate and reasonable disciplinary
measures.26 On the other hand, students have the duty and the responsibility to promote and maintain the
peace and tranquility of the school by observing the rules of discipline. 27
In this case, we rule that the Principal had the authority to order the immediate transfer of petitioner students
because of the 28 November 2002 agreement.28 Petitioner parents affixed their signatures to the minutes of
the 28 November 2002 meeting and signified their conformity to transfer their children to another school.
Petitioners Socorro Canto and Nelia Duro even wrote a letter to inform the University that they would
transfer their children to another school and requested for the pertinent papers needed for the transfer. 29 In
turn, the University did not anymore convene the COSD. The University agreed that it would no longer
conduct disciplinary proceedings and instead issue the transfer credentials of petitioner students. Then
petitioners reneged on their agreement without any justifiable reason. Since petitioners’ present complaint is
one for injunction, and injunction is the strong arm of equity, petitioners must come to court with clean
hands. In University of the Philippines v. Hon. Catungal, Jr.,30 a case involving student misconduct, this
Court ruled:
Since injunction is the strong arm of equity, he who must apply for it must come with equity or with clean
hands. This is so because among the maxims of equity are (1) he who seeks equity must do equity, and (2)
he who comes into equity must come with clean hands. The latter is a frequently stated maxim which is also
expressed in the principle that he who has done inequity shall not have equity. It signifies that a litigant may
be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and
dishonest, or fraudulent, or deceitful as to the controversy in issue.31
Here, petitioners, having reneged on their agreement without any justifiable reason, come to court with
unclean hands. This Court may deny a litigant relief if his conduct has been inequitable, unfair and dishonest
as to the controversy in issue.1avvphi1
Since petitioners have come to court with inequitable and unfair conduct, we deny them relief. We uphold
the validity of the 28 November 2002 agreement and rule that the Principal had the authority to order the
immediate transfer of petitioner students based on the 28 November 2002 agreement.
WHEREFORE, we DENY the petition. We AFFIRM the 16 June 2005 Decision and the 22 March 2006
Resolution of the Court of Appeals.
SO ORDERED.

46
 FIRST DIVISION
G.R. No. 179665 April 3, 2013
SOLID BUILDERS, INC. and MEDINA FOODS INDUSTRIES, INC., Petitioners,
vs.
CHINA BANKING CORPORATION, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
This petition for review on certiorari1 assails the Decision2 dated April 16, 2007 and the Resolution3 dated
September 18, 2007 of the Court of Appeals in CA-G.R. SP No. 81968.
During the period from September 4, 1992 to March 27, 1996, China Banking Corporation (CBC) granted
several loans to Solid Builders, Inc. (SBI), which amounted to ₱139,999,234.34, exclusive of interests and
other charges. To secure the loans, Medina Foods Industries, Inc. (MFII) executed in CBC’s favor several
surety agreements and contracts of real estate mortgage over parcels of land in the Loyola Grand Villas in
Quezon City and New Cubao Central in Cainta, Rizal.4
Subsequently, SBI proposed to CBC a scheme through which SBI would sell the mortgaged properties and
share the proceeds with CBC on a 50-50 basis until such time that the whole obligation would be fully paid.
SBI also proposed that there be partial releases of the certificates of title of the mortgaged properties without
the burden of updating interests on all loans.5
In a letter dated March 20, 2000 addressed to CBC, SBI requested the restructuring of its loans, a reduction
of interests and penalties and the implementation of a dacion en pago of the New Cubao Central property. 6
The letter reads:
March 20, 2000
CHINA BANKING CORPORATION
Dasmarinas cor. Juan Luna Sts.
Binondo, Manila
Attn: Mr. George Yap
Account Officer
Dear Mr. Yap,
This is to refer to our meeting held at your office last March 10, 2000.
In this regard, please allow us to call your attention on the following important matters we have discussed:
1. With respect to the penalties, we are requesting for a reduction in the rates as we find it
onerous considering the big amount of our loan (₱218,540,648.00). The interest together
with the penalties that you are imposing is similar to the ones being charged by private
lending institutions, i.e., 4.5%/month total.
2. As I had discussed with you regarding Dacion en Pago, which you categorically stated
that it could be a possibility, we are considering putting our New Cubao Central (NCC)
on Dacion and restructuring our loan with regards to our Loyola Grand Villas.
Considering that you had stated that our restructuring had not been finalized, we find it timely to raise these
urgent matters and possibly agree on a realistic and workable scheme that we can incorporate on our final
agreement.
Thank you and we strongly hope for your prompt consideration on our request.
Very truly yours,
V. BENITO R. SOLIVEN (Sgd.)
President7
In response, CBC sent SBI a letter dated April 17, 2000 stating that the loans had been completely
restructured effective March 1, 1999 in the amount of ₱218,540,646.00. On the aspect of interests and
charges, CBC suggested the updating of the obligation to avoid paying interests and charges. 8 The relevant
portion of the letter dated April 17, 2000 reads:
47
First of all, to clarify, the loan’s restructuring has been finalized and completed on 3/01/99 with the booking
of the Restructured loan of ₱218,540,646. Only two Amendments of Real Estate Mortgages remain to be
registered to date. Certain documents that we requested from your company since last year, that could
facilitate this amendment have not yet been forwarded to us until now. Nevertheless, this does not change
the fact that the restructuring of the loan has been done with and finalized.
This in turn is with regards to statement[s] no. 1 & 2 of your letter, referring to the interest rates and
penalties. As per our records, the rates are actually the prevailing bank interest rates. In addition, penalty
charges are imposed in the event of non-payment. To avoid experiencing having to pay more due to the
penalty charges, updating of obligations is necessary. Thus, we advise updating of your obligations to avoid
penalty charges. However, should you be able to update both interest and penalty through a "one-time"
payment, we shall present your request to Senior Management for possible reduction in penalty charges.
Concerning statement no. 3 containing your request for the possible Dacion en Pago of your NCC
properties, as was discussed already in the meeting, it is a concern that has to be discussed with Senior
Management and approved by the Executive Committee before we can commit to you on the matter. We
suggest that your company, Solid Builders, exhaust all possibilities to sell the NCC properties yourselves
because, being a real estate company, Solid has better ways and means of selling the properties. 9
This was followed by another communication from CBC to SBI reiterating, among others, that the loan has
been restructured effective March 1, 1999 upon issuance by SBI of promissory notes in favor of CBC. The
relevant portion of that letter dated May 19, 2000 reads:
Again, in response to your query with regards the issue of the loans restructuring, to reiterate, the loan
restructuring has been finalized and completed on 3/01/99 with the booking of the Restructured loan of
₱231,716,646. The Restructured Loan was effective ever since the new Promissory Note was signed on the
said date.
The interest rates for the loans are actually rates booked since the new Promissory Notes were
effective.1âwphi1 Any move of changing it or "re-pricing" the interest is only possible every 90 days from
the booking date, which represents the interest amortization payment dates. No change or "re-pricing" in
interest rates is possible since interest payment/obligations have not yet been paid.
With regards to the possible Dacion en Pago of your NCC properties, as was discussed already in the
meeting, it is a concern that has to be discussed with Senior Management and approved by the Executive
Committee before we can commit to you on the matter. We suggest that your company, Solid Builders,
exhaust all possibilities to sell the NCC properties yourselves because, being a real estate company, Solid
has better ways and means of selling the properties. 10
Subsequently, in a letter dated September 18, 2000, CBC demanded SBI to settle its outstanding account
within ten days from receipt thereof. The letter dated September 18, 2000 reads:
September 18, 2000
SOLID BUILDERS, INC.
V.V. Soliven Bldg., I
EDSA, San Juan, Metro Manila
1âwphi1
PN NUMBER O/S BALANCE DUE DATE INTEREST
PN-MK-TS-342924 PHP 89,700,000.00 03/01/2004 04/13/1999
PN-MK-TS-342931 19,350,000.00 03/01/2004 08/05/1999
PN-MK-TS-342948 35,888,000.00 03/01/2004 ---------------
PN-MK-TS-342955 6,870,000.00 03/01/2004 ---------------
 PN-MK-TS-342962 5,533,646.00 03/01/2004 07/26/1999 interest rate shall be at 18.5% per annum. For its part, MFII executed third party real estate mortgage over
its properties in favor of CBC to secure the payment of SBI’s restructured loan. As SBI was delinquent in
PN-MK-TS-342979 21,950,000.00 03/01/2004 --------------- the payment of the principal as well as the interest thereon, CBC demanded settlement of SBI’s account. 14
After hearing the parties, the trial court issued an Order dated December 14, 2000 granting the application of
PN-MK-TS-342986 3,505,000.00 03/01/2004 08/09/1999 SBI and MFII for the issuance of a writ of preliminary injunction. The trial court held that SBI and MFII
were able to sufficiently comply with the requisites for the issuance of an injunctive writ:
PN-MK-TS-342993 19,455,000.00 03/01/2004 --------------- It is well-settled that to be entitled to an injunctive writ, a party must show that: (1) the invasion of right
sought to be protected is material and substantial; (2) the right of complainant is clear and unmistakable;
PN-MK-TS-343002 4,168,000.00 03/01/2004 --------------- and, (3) there is an urgent and paramount necessity for the writ to prevent serious damage.
The Court opines that the above-mentioned requisites have been sufficiently shown by plaintiffs in this case,
PN-MK-TS-343026 12,121,000.00 03/01/2004 ---------------
accordingly, a writ of preliminary injunction is in order.
PH₱218,540,646.00 The three subject letters, particularly the letter dated September 18, 2000, indicate that the promissory notes
================ executed by Benito Soliven as President of plaintiff SBI amounted to ₱218,540,646.00, excluding interest,
penalties and other charges remained unpaid, and demand that the account be settled within ten days, else
Greetings! defendant bank shall refer the latter to its lawyers for collection.
We refer again to the balances of the abovementioned Promissory Notes amounting to PH₱218,540,646.00 The message in the letter is clear: If the account is not settled within the grace period, defendant bank will
excluding interest, penalties and other charges signed by you jointly and severally in our favor, which resort to foreclosure of mortgage on the subject properties.
remains unpaid up to this date despite repeated demands for payment. The actual or imminent damage to plaintiffs is likewise clear. Considering the number of parcels of land and
In view of the strict regulations of Bangko Sentral ng Pilipinas on past due accounts, we regret that we area involved, if these are foreclosed by defendant bank, plaintiffs’ properties and source of income will be
cannot hold these accounts further in abeyance. Accordingly, we are reiterating our request that effectively diminished, possibly to the point of closure.
arrangements to have these accounts settled within ten (10) days from receipt hereof, otherwise, we shall be The only issue remaining is whether or not plaintiffs have the right to ask for an injunctive writ in order to
constrained to refer the matter to our lawyers for collection. prevent defendant bank from taking over their properties.
We enclose a Statement of Account as of September 30, 2000 for your reference and guidance. Plaintiffs argued that the interest and penalties charged them in the subject letters and attached statements of
Very truly yours, account increased during a seven-month period to an amount they described as "onerous", "usurious" ad
MERCEDES E. GERMAN (Sgd.) "greedy".
Manager They likewise asserted that there were on-going talks between officers of the corporations involved to treat
Loans & Discounts Department – H.O.11 or restructure the contracts to a dacion en pago, as there was a proposed plan of action by representatives of
On October 5, 2000, claiming that the interests, penalties and charges imposed by CBC were iniquitous and plaintiffs during the meetings.
unconscionable and to enjoin CBC from initiating foreclosure proceedings, SBI and MFII filed a Complaint Defendant, on the other hand, sought to explain the increase in the interest as contained in the promissory
"To Compel Execution of Contract and for Performance and Damages, With Prayer for Writ of Preliminary notes which were voluntarily and willingly signed by Soliven, therefore, binding on plaintiffs and that the
Injunction and Ex-Parte Temporary Restraining Order" in the Regional Trial Court (RTC) of Pasig City. The proposed plan of action is merely an oral contract still in the negotiation stage and not binding.
case was docketed as Civil Case No. 68105 and assigned to Branch 264. 12 The condition on the interest payments as contained in the promissory notes are as follows:
In support of their application for the issuance of writ of preliminary injunction, SBI and MFII alleged: "Interest for the first quarter shall be @ 18.5% P.A. Thereafter, it shall be payable quarterly in arrears based
IV. APPLICATION FOR PRELIMINARY INJUNCTION WITH EX- PARTE TEMPORARY on three months average rate."
RESTRAINING ORDER In its Memorandum, defendant bank tried to show that the questioned increase in the interests was merely in
A. GROUNDS FOR PRELIMINARY INJUNCTION compliance with the above condition. To this Court, the explanation is insufficient. A more detailed
1. That SBI and MFII are entitled to the reliefs demanded, among which is enjoining/restraining rationalization is required to convince the court of the fairness of the increase in interests and penalties.
the commission of the acts complained of, the continuance of which will work injustice to the However, the coming explanation may probably be heard only during trial on the merits, and by then this
plaintiffs; that such acts are in violation of the rights of plaintiffs and, if not enjoined/restrained, pending incident or the entire case, may already be moot and academic if the injunctive writ is not issued.15
will render the judgment sought herein ineffectual. The dispositive portion of the trial court’s Order dated December 14, 2000 reads:
2. That under the circumstances, it is necessary to require, through preliminary injunction, CBC to WHEREFORE, premises considered, the application for issuance of writ of preliminary injunction is
refrain from immediately enforcing its letters dated April 17, 2000 and May 19, 2000 and GRANTED.
September 18, 2000 during the pendency of this complaint, and Defendant CHINA BANKING CORPORATION, its representatives, agents and all persons working in its
3. That SBI and MFII submit that they are exempt from filing of a bond considering that the letters behalf are hereby enjoined from enforcing the contents of its letters to plaintiffs dated April 17, 2000, May
dated April 17, 2000, May 19, 2000 and September 18, 2000 are a patent nullity, and in the event 19, 2000 and September 18, 2000, particularly the bank’s legal department or other counsel commencing
they are not, they are willing to post such bond this Honorable Court may determine and under the collection proceedings against plaintiffs in the amount stated in the letters and statements of account.
conditions required by Section 4, Rule 58.13 The Writ of Preliminary Injunction shall be issued upon plaintiffs’ posting of a bond executed to defendant
In its Answer and Opposition to the issuance of the writ of preliminary injunction, CBC alleged that to in the amount of Two Million Pesos (₱2,000,000.00) to the effect [that] the plaintiffs will pay defendant all
implement the agreed restructuring of the loan, SBI executed ten promissory notes stipulating that the

48
damages which the latter may sustain by reason of the injunction if it be ultimately decided that the
injunction is unwarranted.16
CBC sought reconsideration but the trial court denied it in an Order 17 dated December 10, 2001.
Subsequently, CBC filed a "Motion to Dissolve Injunction Order" but this was denied in an Order 18 dated
November 10, 2003. The trial court ruled that the motion was in the nature of a mere belated second motion
for reconsideration of the Order dated December 14, 2000. It also declared that CBC failed to substantiate its
prayer for the dissolution of the injunctive writ.
Aggrieved, CBC filed a Petition for Certiorari docketed as CA-G.R. SP No. 81968 in the Court of Appeals
where it claimed that the Orders dated December 14, 2000 (granting the application of petitioners SBI and
MFII for the issuance of writ of preliminary injunction), December 10, 2001 (denying reconsideration of the
order dated December 14, 2000), and November 10, 2003 (denying the CBC’s motion to dissolve injunction
order) were all issued with grave abuse of discretion amounting to lack of jurisdiction.19
In a Decision dated April 16, 2007, the Court of Appeals found that, on its face, the trial court’s Order dated
December 14, 2000 granting the application of SBI and MFII for the issuance of a writ of preliminary
injunction had no basis as there were no findings of fact or law which would indicate the existence of any of
the requisites for the grant of an injunctive writ. It appeared to the Court of Appeals that, in ordering the
issuance of a writ of injunction, the trial court simply relied on the imposition by CBC of the interest rates to
the loans obtained by SBI and MFII. According to the Court of Appeals, however, the records do not reveal
a clear and unmistakable right on the part of SBI and MFII that would entitle them to the protection of a writ
of preliminary injunction. Thus, the Court of Appeals granted the petition of CBC, set aside the Orders dated
December 14, 2000, December 10, 2001, and November 10, 2003 and dissolved the injunctive writ issued
by the RTC of Pasig City.20
SBI and MFII filed a motion for reconsideration but it was denied by the Court of Appeals in a Resolution
dated September 18, 2007.
Hence, this petition.
SBI and MFII assert that the Decision dated April 16, 2007 of the Court of Appeals is legally infirm as its
conclusions are contrary to the judicial admissions of CBC. They allege that, in its Answer, CBC admitted
paragraphs 25 and 26 of the Complaint regarding the interests and charges amounting to ₱35,093,980.14 and
₱80,614,525.15, respectively, which constituted more than 50% of the total obligation of ₱334,249,151.29
as of February 15, 2000. For SBI and MFII, CBC’s admission of paragraphs 25 and 26 of the Complaint is
an admission that the interest rate imposed by CBC is usurious, exorbitant and confiscatory. Thus, when the
Court of Appeals granted the petition of CBC and ordered the lifting of the writ of preliminary injunction it
effectively disposed of the main case, Civil Case No. 68105, without trial on the merits and rendered moot
and academic as it enabled CBC to foreclose on the mortgages despite the usurious, exorbitant and
confiscatory interest rates.21
SBI and MFII also claim that the Court of Appeals either overlooked or disregarded undisputed and
admitted facts which, if properly considered, would have called for the maintenance and preservation of the
preliminary injunction issued by the trial court. They argue that the Court of Appeals did not even consider
Article 1229 of the Civil Code which provides:
Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or
irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be
reduced by the courts if it is iniquitous or unconscionable.
For SBI and MFII, the failure of the Court of Appeals to take into account Article 1229 of the Civil Code
and its act of lifting the preliminary injunction "would definitely pave the way for CBC’s unbridled
imposition of illegal rates of interest and immediate foreclosure" of the properties of SBI and MFII "without
the benefit of a full blown trial."22
For its part, CBC assails the petition contending that it is not allowed under Rule 45 of the Rules of Court
because it simply raises issues of fact and not issues of law. CBC further asserts that the Decision of the
49
Court of Appeals is an exercise of sound judicial discretion as it is in accord with the law and the applicable
provisions of this Court.23
The petition fails.
This Court has recently reiterated the general principles in issuing a writ of preliminary injunction in Palm
Tree Estates, Inc. v. Philippine National Bank24:
A preliminary injunction is an order granted at any stage of an action prior to judgment of final order,
requiring a party, court, agency, or person to refrain from a particular act or acts. It is a preservative remedy
to ensure the protection of a party’s substantive rights or interests pending the final judgment in the principal
action. A plea for an injunctive writ lies upon the existence of a claimed emergency or extraordinary
situation which should be avoided for otherwise, the outcome of a litigation would be useless as far as the
party applying for the writ is concerned.
At times referred to as the "Strong Arm of Equity," we have consistently ruled that there is no power the
exercise of which is more delicate and which calls for greater circumspection than the issuance of an
injunction. It should only be extended in cases of great injury where courts of law cannot afford an adequate
or commensurate remedy in damages; "in cases of extreme urgency; where the right is very clear; where
considerations of relative inconvenience bear strongly in complainant’s favor; where there is a willful and
unlawful invasion of plaintiff’s right against his protest and remonstrance, the injury being a continuing one,
and where the effect of the mandatory injunction is rather to reestablish and maintain a preexisting
continuing relation between the parties, recently and arbitrarily interrupted by the defendant, than to
establish a new relation."
A writ of preliminary injunction is an extraordinary event which must be granted only in the face of actual
and existing substantial rights. The duty of the court taking cognizance of a prayer for a writ of preliminary
injunction is to determine whether the requisites necessary for the grant of an injunction are present in the
case before it.25 In this connection, a writ of preliminary injunction is issued to preserve the status quo ante,
upon the applicant’s showing of two important requisite conditions, namely: (1) the right to be protected
exists prima facie, and (2) the acts sought to be enjoined are violative of that right. It must be proven that the
violation sought to be prevented would cause an irreparable injury. 26
Here, SBI and MFII basically claim a right to have their mortgaged properties shielded from foreclosure by
CBC on the ground that the interest rate and penalty charges imposed by CBC on the loans availed of by
SBI are iniquitous and unconscionable. In particular, SBI and MFII assert:
There is therefore an urgent necessity for the issuance of a writ of preliminary injunction or at least a status
quo [order], otherwise, respondent bank will definitely foreclose petitioners’ properties without awaiting the
trial of the main case on the merits, with said usurious and confiscatory rates of interest as basis. 27
and
There is therefore no legal justification for the Honorable Court of Appeals to lift/dissolve the injunction
issued by the trial court, otherwise, respondent bank – on the basis of this illegal imposition of interest – can
already foreclose the properties of petitioners and render the whole case (sans trial on the merits) moot and
academic.28
On this matter, the Order dated December 14, 2000 of the trial court enumerates as the first argument raised
by SBI and MFII in support of their application for the issuance of a writ of preliminary injunction:
1. Their rights basically are for the protection of their properties put up as collateral for the loans extended
by defendant bank to them.29
As debtor-mortgagors, however, SBI and MFII do not have a right to prevent the creditor-mortgagee CBC
from foreclosing on the mortgaged properties simply on the basis of alleged "usurious, exorbitant and
confiscatory rate of interest."30 First, assuming that the interest rate agreed upon by the parties is usurious,
the nullity of the stipulation of usurious interest does not affect the lender’s right to recover the principal
loan, nor affect the other terms thereof.31 Thus, in a usurious loan with mortgage, the right to foreclose the
mortgage subsists, and this right can be exercised by the creditor upon failure by the debtor to pay the debt
due.32
Second, even the Order dated December 14, 2000 of the trial court, which granted the application for the
issuance of a writ of preliminary injunction, recognizes that the parties still have to be heard on the alleged
lack of "fairness of the increase in interests and penalties" during the trial on the merits. 33 Thus, the basis of
the right claimed by SBI and MFII remains to be controversial or disputable as there is still a need to
determine whether or not, upon consideration of the various circumstances surrounding the agreement of the
parties, the interest rates and penalty charges are unconscionable. Therefore, such claimed right cannot be
considered clear, actual and subsisting. In the absence of a clear legal right, the issuance of the injunctive
writ constitutes grave abuse of discretion.34
The Order dated December 10, 2001 also shows the reasoning of the trial court which betrays that its grant
of the application of SBI and MFII for the issuance of a writ of preliminary injunction was not based on a
clear legal right. Said the trial court:
It was likewise shown that plaintiffs SBI and MFII had the clear right and urgency to ask for injunction
because of the issue of validity of the increase in the amount of the loan obligation. 35 (Emphasis supplied.)
At most, the above finding of the trial court that the validity of the increase in the amount of the loan
obligation is in issue simply amounted to a finding that the rights of SBI and MFII vis-à-vis that of CBC are
disputed and debatable. In such a case where the complainant-movant’s right is doubtful or disputed, the
issuance of an injunctive writ is not proper.36
Even assuming that SBI and MFII are correct in claiming their supposed right, it nonetheless disintegrates in
the face of the ten promissory notes in the total amount of ₱218,540,648.00, exclusive of interest and
penalties, issued by SBI in favor of CBC on March 1, 1999 which until now remain unpaid despite the
maturity of the said notes on March 1, 2004 and CBC’s repeated demands for payment. 37 Foreclosure is but
a necessary consequence of nonpayment of mortgage indebtedness. 38 As this Court held in Equitable PCI
Bank, Inc. v. OJ-Mark Trading, Inc.39:
Where the parties stipulated in their credit agreements, mortgage contracts and promissory notes that the
mortgagee is authorized to foreclose the mortgaged properties in case of default by the mortgagors, the
mortgagee has a clear right to foreclosure in case of default, making the issuance of a Writ of Preliminary
Injunction improper. x x x. (Citation omitted.)
In addition, the default of SBI and MFII to pay the mortgage indebtedness disqualifies them from availing of
the equitable relief that is the injunctive writ. In particular, SBI and MFII have stated in their Complaint that
they have made various requests to CBC for restructuring of the loan. 40 The trial court’s Order dated
December 14, 2000 also found that SBI wrote several letters to CBC "requesting, among others, for a
reduction of interests and penalties and restructuring of the loan."41 A debtor’s various and constant requests
for deferment of payment and restructuring of loan, without actually paying the amount due, are clear
indications that said debtor was unable to settle his obligation. 42 SBI’s default or failure to settle its
obligation is a breach of contractual obligation which tainted its hands and disqualified it from availing of
the equitable remedy of preliminary injunction.
As SBI is not entitled to the issuance of a writ of preliminary injunction, so is MFII. The accessory follows
the principal. The accessory obligation of MFII as accommodation mortgagor and surety is tied to SBI’s
principal obligation to CBC and arises only in the event of SBI’s default.
Thus, MFII’s interest in the issuance of the writ of preliminary injunction is necessarily prejudiced by SBI’s
wrongful conduct and breach of contract.
Even Article 1229 of the Civil Code, which SBI and MFII invoke, works against them. Under that provision,
the equitable reduction of the penalty stipulated by the parties in their contract will be based on a finding by
the court that such penalty is iniquitous or unconscionable. Here, the trial court has not yet made a ruling as
to whether the penalty agreed upon by CBC with SBI and MFII is unconscionable. Such finding will be
made by the trial court only after it has heard both parties and weighed their respective evidence in light of
all relevant circumstances. Hence, for SBI and MFII to claim any right or benefit under that provision at this
point is premature.
50
As no clear right that warrants the extraordinary protection of an injunctive writ has been shown by SBI and
MFII to exist in their favor, the first requirement for the grant of a preliminary injunction has not been
satisfied. In the absence of any requisite, and where facts are shown to be wanting in bringing the matter
within the conditions for its issuance, the ancillary writ of injunction must be struck down for having been
rendered in grave abuse of discretion.43 Thus, the Court of Appeals did not err when it granted the petition
for certiorari of CBC and ordered the dissolution of the writ of preliminary injunction issued by the trial
court.
Neither has there been a showing of irreparable injury. An injury is considered irreparable if it is of such
constant and frequent recurrence that no fair or reasonable redress can be had therefor in a court of law, or
where there is no standard by which their amount can be measured with reasonable accuracy, that is, it is not
susceptible of mathematical computation. The provisional remedy of preliminary injunction may only be
resorted to when there is a pressing necessity to avoid injurious consequences which cannot be remedied
under any standard of compensation.44
In the first place, any injury that SBI and MFII may suffer in case of foreclosure of the mortgaged properties
will be purely monetary and compensable by an appropriate judgment in a proper case against CBC.
Moreover, where there is a valid cause to foreclose on the mortgages, it cannot be correctly claimed that the
irreparable damage sought to be prevented by the application for preliminary injunction is the loss of the
mortgaged properties to auction sale.45 The alleged entitlement of SBI and MFII to the "protection of their
properties put up as collateral for the loans" they procured from CBC is not the kind of irreparable injury
contemplated by law. Foreclosure of mortgaged property is not an irreparable damage that will merit for the
debtor-mortgagor the extraordinary provisional remedy of preliminary injunction. As this Court stated in
Philippine National Bank v. Castalloy Technology Corporation 46:
All is not lost for defaulting mortgagors whose properties were foreclosed by creditors-mortgagees. The
respondents will not be deprived outrightly of their property, given the right of redemption granted to them
under the law. Moreover, in extrajudicial foreclosures, mortgagors have the right to receive any surplus in
the selling price. Thus, if the mortgagee is retaining more of the proceeds of the sale than he is entitled to,
this fact alone will not affect the validity of the sale but will give the mortgagor a cause of action to recover
such surplus. (Citation omitted.)
The En Banc Resolution in A.M. No. 99-10-05-0, Re: Procedure in Extrajudicial or Judicial Foreclosure of
Real Estate Mortgages, further stacks the odds against SBI and MFII. Issued on February 20, 2007, or some
two months before the Court of Appeals promulgated its decision in this case, the resolution embodies the
additional guidelines intended to aid courts in foreclosure proceedings, specifically limiting the instances,
and citing the conditions, when a writ against foreclosure of a mortgage may be issued, to wit:
(1) No temporary restraining order or writ of preliminary injunction against the extrajudicial
foreclosure of real estate mortgage shall be issued on the allegation that the loan secured by the
mortgage has been paid or is not delinquent unless the application is verified and supported by
evidence of payment.
(2) No temporary restraining order or writ of preliminary injunction against the extrajudicial
foreclosure of real estate mortgage shall be issued on the allegation that the interest on the loan is
unconscionable, unless the debtor pays the mortgagee at least twelve percent per annum interest on
the principal obligation as stated in the application for foreclosure sale, which shall be updated
monthly while the case is pending.
(3) Where a writ of preliminary injunction has been issued against a foreclosure of mortgage, the
disposition of the case shall be speedily resolved. To this end, the court concerned shall submit to
the Supreme Court, through the Office of the Court Administrator, quarterly reports on the
progress of the cases involving ten million pesos and above.
(4) All requirements and restrictions prescribed for the issuance of a temporary restraining
order/writ of preliminary injunction, such as the posting of a bond, which shall be equal to the
 amount of the outstanding debt, and the time limitation for its effectivity, shall apply as well to a
status quo order.47
The guidelines speak of strict exceptions and conditions. 48 To reverse the decision of the Court of Appeals
and reinstate the writ of preliminary injunction issued by the trial court will be to allow SBI and MFII to
circumvent the guidelines and conditions provided by the En Banc Resolution in A.M. No. 99-10-05-0 dated
February 20, 2007 and prevent CBC from foreclosing on the mortgaged properties based simply on the
allegation that the interest on the loan is unconscionable. This Court will not permit such a situation. What
cannot be done directly cannot be done indirectly.49
All told, the relevant circumstances in this case show that there was failure to satisfy the requisites for the
issuance of a writ of preliminary injunction. The injunctive writ issued by the trial court should therefore be
lifted and dissolved. That was how the Court of Appeals decided. That is how it should be.
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.

51
 SECOND DIVISION
G.R. No. 172909 March 5, 2014
SPOUSES SILVESTRE O. PLAZA AND ELENA Y. PLAZA, Petitioners,
vs.
GUILLERMO LUSTIVA, ELEODORA VDA. DE MARTINEZ AND VICKY SAYSON
GOLOSENO, Respondents.
DECISION
BRION, J.:
Through a petition for review on certiorari,1 filed under Rule 45 of the Rules of Court, the petitioners,
spouses Silvestre O. Plaza and Elena Y. Plaza, seek the reversal of the decision 2 dated October 24, 2005 and
the Resolution3 dated April 6, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 59859.
THE FACTS
On August 28, 1997, the CA4 ruled that among the Plaza siblings, namely: Aureliano, Emiliana, Vidal,
Marciano, and Barbara, Barbara was the owner of the subject agricultural land. The decision became final
and executory and Barbara's successors, respondents Guillermo Lustiva, Eleodora Vda. de Martinez and
Vicky Sayson Goloseno, have continued occupying the property.
On September 14, 1999, Vidal’s son and daughter-in-law, the petitioners, filed a Complaint for Injunction,
Damages, Attorney’s Fees with Prayer for the Issuance of the Writ of Preliminary Injunction and/or
Temporary Restraining Order against the respondents and the City Government of Butuan. They prayed that
the respondents be enjoined from unlawfully and illegally threatening to take possession of the subject
property. According to the petitioners, they acquired the land from Virginia Tuazon in 1997; Tuazon was the
sole bidder and winner in a tax delinquency sale conducted by the City of Butuan on December 27, 1996.
In their answer, the respondents pointed out that they were never delinquent in paying the land taxes and
were in fact not aware that their property had been offered for public auction. Moreover, Tuazon, being a
government employee, was disqualified to bid in the public auction, as stated in Section 89 of the Local
Government Code of 1991.5 As Tuazon’s participation in the sale was void, she could have not transferred
ownership to the petitioners. Equally important, the petitioners merely falsified the property tax declaration
by inserting the name of the petitioners’ father, making him appear as a co-owner of the auctioned land.
Armed with the falsified tax declaration, the petitioners, as heirs of their father, fraudulently redeemed the
land from Tuazon. Nonetheless, there was nothing to redeem as the land was not sold. For these
irregularities, the petitioners had no right to the Writ of Preliminary Injunction and/or Temporary
Restraining Order prayed for against them.
THE RTC’S RULING
In its December 14, 1999 order,6 the Regional Trial Court (RTC) of Butuan City, Branch 5, reconsidered its
earlier order,7 denied the prayer for a Writ of Preliminary Injunction, and ordered that the possession and
occupation of the land be returned to the respondents. The RTC found that the auction sale was tainted with
irregularity as the bidder was a government employee disqualified in accordance with Section 89 of the
Local Government Code of 1991. The petitioners are not buyers in good faith either. On the contrary, they
were in bad faith for having falsified the tax declaration they redeemed the property with.
THE CA’S RULING
Through a petition for review on certiorari under Rule 65, the petitioners challenged the RTC’s order before
the CA.
While the petition for review on certiorari was pending before the CA, the petitioners filed an action for
specific performance8 against the City Government of Butuan. According to the petitioners, they acquired
possession and ownership over the auctioned property when they redeemed it from Tuazon. The City
Government of Butuan must therefore issue them a certificate of sale. 9
In its October 24, 2005 decision,10 the CA affirmed the RTC’s ruling, found the petitioners guilty of forum
shopping, dismissed the case, and referred the case to the Court and to the Integrated Bar of the Philippines
for investigation and institution of the appropriate administrative action. 11 The CA, after legal analysis,
52
similarly concluded that for being disqualified to bid under Section 89 of the Local Government Code of
1991, Tuazon never obtained ownership over the property; much less transmit any proprietary rights to the
petitioners. Clearly, the petitioners failed to establish any clear and unmistakable right enforceable by the
injunctive relief.
On April 6, 2006, the CA rejected the petitioners’ motion for reconsideration.
THE PARTIES’ ARGUMENTS
The petitioners filed the present petition for review on certiorari with this Court to challenge the CA rulings.
The petitioners maintain that they did not falsify the tax declaration in acquiring the auctioned property.
Moreover, assuming that Tuazon, the sole bidder, was indeed disqualified from participating in the public
auction, Section 18112of the Local Government Code of 1991 finds application. Applying the law, it is as if
there was no bidder, for which the City Government of Butuan was to be considered the purchaser of the
land in auction. Therefore, when the petitioners bought the land, they bought it directly from the purchaser -
City Government of Butuan - and not from Tuazon, as redeemers.
Also, the respondents may not question the validity of the public auction for failing to deposit with the court
the amount required by Section 26713 of the Local Government Code of 1991.
Finally, the petitioners argue that they did not commit forum shopping, as the reliefs prayed for in the
present case and in the specific performance case are not the same. In the present case, they merely
impleaded the City Government of Butuan as a nominal party to pay for the value of the land only if
possession of the land was awarded to the respondents. On the other hand, the complaint for specific
performance prayed that the City Government of Butuan execute the necessary certificate of sale and other
relevant documents pertaining to the auction.
The respondents, for their part, reiterate the lower courts’ findings that there could have been no legal
redemption in favor of the petitioners as the highest bidder was disqualified from bidding. Moreover, the CA
correctly applied the law in finding the petitioners guilty of forum shopping. Most importantly, the grant of
preliminary injunction lies in the sound discretion of the court and the petitioners failed to show proof that
they are entitled to it.
Meanwhile, on August 8, 2013, the RTC dismissed the main action and ordered the petitioners to pay the
respondents attorney’s fees and litigation expenses. 14
THE COURT’S RULING
We resolve to deny the petition for lack of merit.
The petitioners may not
raise factual issues
The petitioners maintain that they did not falsify the tax declaration they reimbursed the property with.
According to them, the document already existed in 1987, way before they acquired the land in 1997.
Contrary likewise to the lower courts’ finding, they did not purchase the land from Tuazon as
redemptioners; they directly bought the property from the City Government of Butuan.
These factual contests are not appropriate for a petition for review on certiorari under Rule 45. The Court is
not a trier of facts.15 The Court will not revisit, re-examine, and re-evaluate the evidence and the factual
conclusions arrived at by the lower courts.16 In the absence of compelling reasons, the Court will not disturb
the rule that factual findings of the lower tribunals are final and binding on this Court. 17
Sections 181 and 267 of the Local Government Code of 1991 are inapplicable; these provisions do not apply
to the present case
The petitioners may not invoke Section 18118 of the Local Government Code of 1991 to validate their
alleged title. The law authorizes the local government unit to purchase the auctioned property only in
instances where "there is no bidder" or "the highest bid is xxx insufficient." A disqualified bidder is not
among the authorized grounds. The local government also never undertook steps to purchase the property
under Section 181 of the Local Government Code of 1991, presumably because it knew the invoked
provision does not apply.
Neither can the Court agree with the petitioners’ stance that the respondents’ defense — the petitioners’
defective title — must fail for want of deposit to the court the amount required by Section 267 of the Local
Government Code. The provision states:
Section 267. Action Assailing Validity of Tax Sale. - No court shall entertain any action assailing the
validity or any sale at public auction of real property or rights therein under this Title until the taxpayer shall
have deposited with the court the amount for which the real property was sold, together with interest of two
percent (2%) per month from the date of sale to the time of the institution of the action. The amount so
deposited shall be paid to the purchaser at the auction sale if the deed is declared invalid but it shall be
returned to the depositor if the action fails.
Neither shall any court declare a sale at public auction invalid by reason or irregularities or informalities in
the proceedings unless the substantive rights of the delinquent owner of the real property or the person
having legal interest therein have been impaired. [underscores ours; italics supplied]
A simple reading of the title readily reveals that the provision relates to actions for annulment of tax sales.
The section likewise makes use of terms "entertain" and "institution" to mean that the deposit requirement
applies only to initiatory actions assailing the validity of tax sales. The intent of the provision to limit the
deposit requirement to actions for annulment of tax sales led to the Court’s ruling in National Housing
Authority v. Iloilo City, et al.19 that the deposit requirement is jurisdictional — a condition necessary for the
court to entertain the action:
As is apparent from a reading of the foregoing provision, a deposit equivalent to the amount of the sale at
public auction plus two percent (2%) interest per month from the date of the sale to the time the court action
is instituted is a condition — a "prerequisite," to borrow the term used by the acknowledged father of the
Local Government Code — which must be satisfied before the court can entertain any action assailing the
validity of the public auction sale. The law, in plain and unequivocal language, prevents the court from
entertaining a suit unless a deposit is made. xxx. Otherwise stated, the deposit is a jurisdictional requirement
the nonpayment of which warrants the failure of the action.
xxxx
Clearly, the deposit precondition is an ingenious legal device to guarantee the satisfaction of the tax
delinquency, with the local government unit keeping the payment on the bid price no matter the final
outcome of the suit to nullify the tax sale.20
The Court would later reiterate the jurisdictional nature of the deposit in Wong v. City of Iloilo, 21 and
pronounce:
In this regard, National Housing Authority v. Iloilo City holds that the deposit required under Section 267 of
the Local Government Code is a jurisdictional requirement, the nonpayment of which warrants the dismissal
of the action. Because petitioners in this case did not make such deposit, the RTC never acquired jurisdiction
over the complaints.22
These rulings clearly render inapplicable the petitioners’ insistence that the respondents should have made a
deposit to the court. The suit filed by the petitioners was an action for injunction and damages; the issue of
nullity of the auction was raised by the respondents themselves merely as a defense and in no way converted
the action to an action for annulment of a tax sale.
The petitioners failed to show clear
and unmistakable rights to be protected
by the writ; the present action has been
rendered moot and academic by the
dismissal of the main action
As the lower courts correctly found, Tuazon had no ownership to confer to the petitioners despite the latter’s
reimbursement of Tuazon’s purchase expenses. Because they were never owners of the property, the
petitioners failed to establish entitlement to the writ of preliminary injunction. "[T]o be entitled to an
injunctive writ, the right to be protected and the violation against that right must be shown. A writ of
preliminary injunction may be issued only upon clear showing of an actual existing right to be protected
53
during the pendency of the principal action. When the complainant’s right or title is doubtful or disputed, he
does not have a clear legal right and, therefore, the issuance of injunctive relief is not proper." 23
Likewise, upon the dismissal of the main case by the RTC on August 8, 2013, the question of issuance of the
writ of preliminary injunction has become moot and academic. In Arevalo v. Planters Development
Bank,24 the Court ruled that a case becomes moot and academic when there is no more issue between the
parties or object that can be served in deciding the merits of the case. Upon the dismissal of the main action,
the question of the non-issuance of a writ of preliminary injunction automatically died with it. A writ of
preliminary injunction is a provisional remedy; it is auxiliary, an adjunct of, and subject to the determination
of the main action. It is deemed lifted upon the dismissal of the main case, any appeal therefrom
notwithstanding.25
The petitioners are guilty
of forum shopping
We agree with the CA that the petitioners committed forum shopping when they filed the specific
performance case despite the pendency of the present case before the CA. In the recent case of Heirs of
Marcelo Sotto, etc., et al. v. Matilde S. Palicte,26 the Court laid down the three ways forum shopping may be
committed: 1) through litis pendentia — filing multiple cases based on the same cause of action and with the
same prayer, the previous case not having been resolved yet; 2) through res judicata — filing multiple cases
based on the same cause of action and the same prayer, the previous case having been finally resolved; and
3) splitting of causes of action — filing multiple cases based on the same cause of action but with different
prayers — the ground to dismiss being either litis pendentia or res judicata. "The requisites of litis pendentia
are: (a) the identity of parties, or at least such as representing the same interests in both actions; (b) the
identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the
identity of the two cases such that judgment in one, regardless of which party is successful, would amount to
res judicata in the other."27
Noticeable among these three types of forum shopping is the identity of the cause of action in the different
cases filed. Cause of action is "the act or omission by which a party violates the right of another." 28
The cause of action in the present case (and the main case) is the petitioners’ claim of ownership of the land
when they bought it, either from the City Government of Butuan or from Tuazon. This ownership is the
petitioners’ basis in enjoining the respondents from dispossessing them of the property. On the other hand,
the specific performance case prayed that the City Government of Butuan be ordered to issue the petitioners
the certificate of sale grounded on the petitioners’ ownership of the land when they had bought it, either
from the City Government of Butuan or from Tuazon. While it may appear that the main relief prayed for in
the present injunction case is different from what was prayed for in the specific performance case, the cause
of action which serves as the basis for the reliefs remains the same — the petitioners’ alleged ownership of
the property after its purchase in a public auction.
Thus, the petitioners' subsequent filing of the specific performance action is forum shopping of the third
kind-splitting causes of action or filing multiple cases based on the same cause of action, but with different
prayers. As the Court has held in the past, "there is still forum shopping even if the reliefs prayed for in the
two cases are different, so long as both cases raise substantially the same issues."29
Similarly, the CA correctly found that the petitioners and their counsel were guilty of forum shopping based
on litis pendentia. Not only were the parties in both cases the same insofar as the City Government of
Butuan is concerned, there was also identity of rights asserted and identity of facts alleged. The cause of
action in the specific performance case had already been ruled upon in the present case, although it was still
pending appeal before the CA. Likewise, the prayer sought in the specific performance case-for the City
Government ofButuan to execute a deed of sale in favor of the petitioners - had been indirectly ruled upon in
the present case when the R TC declared that no certificate of sale could be issued because there had been
no valid sale.
WHEREFORE, premises considered, the Court DENIES the petition for review on certiorari.1âwphi1 The
decision dated October 24, 2005 and the resolution dated April 6, 2006 of the Court of Appeals in CA-G.R.
SP No. 59859 are hereby AFFIRMED.
SO ORDERED.

54
THIRD DIVISION
G.R. No. 172206, July 03, 2013
OFFICE OF THE OMBUDSMAN, Petitioner, v. ERNESTO M. DE CHAVEZ, ROLANDO L.
LONTOC, SR., DR. PORFIRIO C. LIGAYA, ROLANDO L. LONTOC, JR. AND GLORIA M.
MENDOZA, Respondents.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying that the
Resolution1 of the Court of Appeals (CA), dated April 7, 2006, be reversed and set aside.
The crux of the controversy is whether the Batangas State University Board of Regents (BSU-BOR) could
validly enforce the Office of the Ombudsman's Joint Decision dated February 14, 2005 and Supplemental
Resolution dated July 12, 2005, finding herein respondents guilty of dishonesty and grave misconduct
and imposing the penalty of dismissal from service with its accessory penalties,despite the fact that said
Joint Decision and Supplemental Resolution are pending appeal before the CA.
On August 18, 2005, the BSU-BOR received an Order from Deputy Ombudsman Victor Fernandez
directing the former to enforce the aforementioned Office of the Ombudsman's Joint Decision and
Supplemental Resolution. Pursuant to said Order, the BSU-BOR issued Resolution No. 18, series of 2005,
dated August 22, 2005, resolving to implement the Order of the Office of the Ombudsman. Thus, herein
respondents filed a petition for injunction with prayer for issuance of a temporary restraining order or
preliminary injunction before the Regional Trial Court of Batangas City, Branch 4 (RTC), against the BSU-
BOR. The gist of the petition before the RTC is that the BSU-BOR should be enjoined from enforcing the
Ombudsman's Joint Decision and Supplemental Resolution because the same are still on appeal and,
therefore, are not yet final and executory.
On September 26, 2005, the RTC ordered the dismissal of herein respondents' petition for injunction on the
ground of lack of cause of action. Respondents filed their notice of appeal and promptly filed a Motion for
Issuance of a Temporary Restraining Order and/or Injunction dated December 8, 2005 with the CA. On
February 17, 2006, the CA issued a Resolution granting respondents' prayer for a temporary restraining
order enjoining the BSU-BOR from enforcing its Resolution No. 18, series of 2005.
Thereafter, on March 7, 2006, the Office of the Ombudsman filed a Motion to Intervene and to Admit
Attached Motion to Recall Temporary Restraining Order, with the Motion to Recall Temporary Restraining
Order attached thereto. Respondents opposed said motion and then filed an Urgent Motion for Issuance of a
Writ of Preliminary Injunction. On April 7, 2006, the CA issued the Resolution subject of the present
petition, pertinent portions of which are reproduced below:cralavvonlinelawlibrary
At the outset, let it be emphasized that We are accepting and taking cognizance of the pleadings lodged by
the Office of the Ombudsman only in so far as to afford it with ample opportunity to comment on and
oppose appellants' application for injunctive relief, but not for the purpose of allowing the Ombudsman to
formally and actively intervene in the instant appeal. Basically, this is a regular appeal impugning the
disposition of the trial court, the pivotal issue of which is only for the appellants and the Board of Regents of
BSU to settle and contest, and which may be completely adjudicated upon without the active participation of
the Office of the Ombudsman.
55
xxxx
In the final reckoning, We stand firm by Our conclusion that the administrative penalty of dismissal from
the service imposed upon herein appellants is not yet final and immediately executory in nature in view of
the appeal interposed therefrom by the appellants before this Court, and this fact, in the end, impelled Us to
act with favor upon appellants' prayer for injunctive relief to stay the execution of the impugned Resolution
of the Board of Regents of BSU.
Wherefore, premises considered, the Ombudsman's Motion to Recall the TRO is denied. On the other hand,
appellants' Urgent Motion for Issuance of a Writ of Preliminary Injunction is granted. Accordingly, let a
Writ of Preliminary Injunction be issued, as it is hereby issued, conditioned upon the posting by the
appellants of an Injunction Bond in the sum of Php10,000.00, enjoining the Board of Regents of BSU, and
all other persons and agents acting under its command authority, pending the complete resolution of this
appeal, from effecting the enforcement and implementation of its Resolution No. 18, Series of 2005 issued
pursuant to the July 12, 2005 Supplemental Resolution of the Ombudsman, Central Office.
SO ORDERED.2
Petitioners then filed a petition for review on certiorari before this Court, assailing the aforequoted CA
Resolution dated April 7, 2006, alleging that:cralavvonlinelawlibrary
I.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS DISREGARDED THE WELL-
ENTRENCHED RULE AGAINST FORUM SHOPPING WHEN, INSTEAD OF OUTRIGHTLY
DISMISSING RESPONDENTS' PETITION, THE SAID COURT TOOK COGNIZANCE OF THE
PETITION AND SUBSEQUENTLY ISSUED ITS RESOLUTIONS DATED 17 FEBRUARY 2006 AND 7
APRIL 2006, RESPECTIVELY;chanroblesvirtualawlibrary
II.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS SERIOUSLY OVERLOOKED THE
PROVISIONS OF RULE 58 OF THE 1997 REVISED RULES OF CIVIL PROCEDURE WHEN IT TOOK
COGNIZANCE OF RESPONDENTS' UNVERIFIED PETITION AND SUBSEQUENTLY ISSUED ITS
17 FEBRUARY 2006 AND 7 APRIL 2006 RESOLUTIONS;chanroblesvirtualawlibrary
III.
THE ISSUANCE BY THE HONORABLE COURT OF APPEALS OF THE 17 FEBRUARY 2006 AND 7
APRIL 2006 RESOLUTIONS ENJOINING THE IMPLEMENTATION OF BOARD RESOLUTION NO.
18, SERIES OF 2005 ISSUED BY THE BOARD OF REGENTS OF BATANGAS STATE UNIVERSITY
UNDULY DISREGARDS THE ESTABLISHED RULES RELATIVE TO IMPLEMENTATION OF
OMBUDSMAN DECISION PENDING APPEAL, CONSIDERING THAT:cralavvonlinelawlibrary
A. BOARD RESOLUTION NO. 18, SERIES OF 2005 WAS ISSUED BY THE BOARD OF
REGENTS OF THE BATANGAS STATE UNIVERSITY PURSUANT TO THE JOINT
 DECISION AND SUPPLEMENTAL RESOLUTION ISSUED BY THE OFFICE OF THE
OMBUDSMAN.
B. UNDER THE OMBUDSMAN RULES OF PROCEDURE, AN APPEAL DOES NOT STAY
THE EXECUTION OF DECISIONS, RESOLUTIONS OR ORDERS ISSUED BY THE OFFICE
OF THE OMBUDSMAN.
IV.
RESPONDENTS ARE NOT ENTITLED TO THE INJUNCTIVE RELIEF PRAYED FOR IN THEIR
UNVERIFIED MOTION FILED BEFORE THE HONORABLE COURT OF
APPEALS.3nadcralavvonlinelawlibrary
Controverting petitioner's claims, respondents in turn allege that:cralavvonlinelawlibrary
1. PETITIONER (OMBUDSMAN) HAS NO LEGAL PERSONALITY TO INSTITUTE THE INSTANT
PETITION INASMUCH AS IT IS NOT A PARTY TO THE APPEALED CASE PENDING BEFORE
THE COURT OF APPEALS;chanroblesvirtualawlibrary
2. ASSUMING THAT THE PETITIONER HAS THE LEGAL PERSONALITY TO INTERVENE IN THE
APPEALED CASE BEFORE THE COURT OF APPEALS, THE INSTANT PETITION IS NOT THE
PROPER RECOURSE AVAILABLE TO THE PETITIONER; AND
3. THE COURT OF APPEALS DID NOT COMMIT ANY GRAVE ABUSE OF DISCRETION IN
ISSUING THE ASSAILED RESOLUTIONS.4
At the outset, the Court must clarify that a petition for review on certiorari is not the proper remedy to
question the CA Resolution dated April 7, 2006 granting the Writ of Preliminary Injunction and denying
petitioner's motion for intervention. Said Resolution did not completely dispose of the case on the merits,
hence, it is merely an interlocutory order. As such, Section 1, Rule 41 of the Rules of Court provides that no
appeal may be taken therefrom. However, where the assailed interlocutory order is patently erroneous and
the remedy of appeal would not afford adequate and expeditious relief, the Court allows certiorari as a
mode of redress.5
In this case, the discussion below will show that the assailed Resolution is patently erroneous, and that
granting the Office of the Ombudsman the opportunity to be heard in the case pending before the lower
court is of primordial importance. Thus, the Court resolves to relax the application of procedural rules by
treating the petition as one for certiorari under Rule 65 of the Rules of Court.
The CA should have allowed the Office of the Ombudsman to intervene in the appeal pending with the
lower court. The wisdom of this course of action has been exhaustively explained in Office of the
Ombudsman v. Samaniego.6 In said case, the CA also issued a Resolution denying the Office of the
56
Ombudsman's motion to intervene. In resolving the issue of whether the Office of the Ombudsman has legal
interest to intervene in the appeal of its Decision, the Court expounded, thus:cralavvonlinelawlibrary
x x x the Ombudsman is in a league of its own. It is different from other investigatory and prosecutory
agencies of the government because the people under its jurisdiction are public officials who, through
pressure and influence, can quash, delay or dismiss investigations directed against them. Its function is
critical because public interest (in the accountability of public officers and employees) is at stake.
xxxx
The Office of the Obudsman sufficiently alleged its legal interest in the subject matter of litigation.
Paragraph 2 of its motion for intervention and to admit the attached motion to recall writ of preliminary
injunction averred:cralavvonlinelawlibrary
“2. As a competent disciplining body, the Ombudsman has the right to seek redress on the apparently
erroneous issuance by this Honorable Court of the Writ of Preliminary Injunction enjoining the
implementation of the Ombudsman's Joint Decision x x x.”
In asserting that it was a "competent disciplining body," the Office of the Ombudsman correctly summed up
its legal interest in the matter in controversy. In support of its claim, it invoked its role as a constitutionally
mandated "protector of the people," a disciplinary authority vested with quasi-judicial function to resolve
administrative disciplinary cases against public officials. To hold otherwise would have been tantamount to
abdicating its salutary functions as the guardian of public trust and accountability.
Moreover, the Office of the Ombudsman had a clear legal interest in the inquiry into whether respondent
committed acts constituting grave misconduct, an offense punishable under the Uniform Rules in
Administrative Cases in the Civil Service. It was in keeping with its duty to act as a champion of the
people and preserve the integrity of public service that petitioner had to be given the opportunity to
act fully within the parameters of its authority.
It is true that under our rule on intervention, the allowance or disallowance of a motion to intervene is left to
the sound discretion of the court after a consideration of the appropriate circumstances. However, such
discretion is not without limitations. One of the limits in the exercise of such discretion is that it must not be
exercised in disregard of law and the Constitution. The CA should have considered the nature of the
Ombudsman's powers as provided in the Constitution and RA 6770.
xxxx
Both the CA and respondent likened the Office of the Ombudsman to a judge whose decision was in
question. This was a tad too simplistic (or perhaps even rather disdainful) of the power, duties and functions
of the Office of the Ombudsman. The Office of the Ombudsman cannot be detached, disinterested and
neutral specially when defending its decisions. Moreover, in administrative cases against government
personnel, the offense is committed against the government and public interest.What further proof of a
direct constitutional and legal interest in the accountability of public officers is necessary? 7
Here, since its power to ensure enforcement of its Joint Decision and Supplemental Resolution is in danger
of being impaired, the Office of the Ombudsman had a clear legal interest in defending its right to have its
judgment carried out. The CA patently erred in denying the Office of the Ombudsman's motion for
intervention.
A discussion of the next issue of the propriety of the issuance of a writ of preliminary injunction in this case
would necessarily touch on the very merits of the case, i.e., whether the concerned government agencies and
instrumentalities may execute the Office of the Ombudsman's order to dismiss a government employee from
service even if the Ombudsman's decision is pending appeal. It would also be a great waste of time to
remand the case back to the CA, considering that the entire records of the proceedings have already been
elevated to this Court. Thus, at this point, the Court shall fully adjudicate the main issue in the case.
Note that for a writ of preliminary injunction to issue, the following essential requisites must concur, to wit:
(1) that the invasion of the right is material and substantial; (2) that the right of complainant is clear and
unmistakable; and, (3) that there is an urgent and paramount necessity for the writ to prevent serious
damage.8 In the present case, the right of respondents cannot be said to be clear and unmistakable, because
the prevailing jurisprudence is that the penalty of dismissal from the service meted on government
employees or officials is immediately executory in accordance with the valid rule of execution pending
appeal uniformly observed in administrative disciplinary cases. In Facura v. Court of Appeals,9 the Court
fully threshed out this matter, thus:cralavvonlinelawlibrary
The issue of whether or not an appeal of the Ombudsman decision in an administrative case carries with it
the immediate suspension of the imposed penalty has been laid to rest in the recent resolution of the case of
Ombudsman v. Samaniego, where this Court held that the decision of the Ombudsman is immediately
executory pending appeal and may not be stayed by the filing of an appeal or the issuance of an injunctive
writ, to wit:cralavvonlinelawlibrary
“Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman, as amended by
Administrative Order No. 17 dated September 15, 2003, provides:cralavvonlinelawlibrary
SEC. 7. Finality and execution of decision. - Where the respondent is absolved of the charge, and in case of
conviction where the penalty imposed is public censure or reprimand, suspension of not more than one
month, or a fine equivalent to one month salary, the decision shall be final, executory and unappealable. In
all other cases, the decision may be appealed to the Court of Appeals on a verified petition for review under
the requirements and conditions set forth in Rule 43 of the Rules of Court, within fifteen (15) days from
receipt of the written Notice of the Decision or Order denying the motion for reconsideration.
An appeal shall not stop the decision from being executory. In case the penalty is suspension or
removal and the respondent wins such appeal, he shall be considered as having been under preventive
suspension and shall be paid the salary and such other emoluments that he did not receive by reason
of the suspension or removal.
A decision of the Office of the Ombudsman in administrative cases shall be executed as a matter of
course. The Office of the Ombudsman shall ensure that the decision shall be strictly enforced and properly
implemented. The refusal or failure by any officer without just cause to comply with an order of the Office
of the Ombudsman to remove, suspend, demote, fine, or censure shall be a ground for disciplinary action
against such officer. [Emphases supplied]
The Ombudsman's decision imposing the penalty of suspension for one year is immediately executory
57
pending appeal. It cannot be stayed by the mere filing of an appeal to the CA. This rule is similar to that
provided under Section 47 of the Uniform Rules on Administrative Cases in the Civil Service.
In the case of In the Matter to Declare in Contempt of Court Hon. Simeon A. Datumanong, Secretary of the
DPWH, we held:cralavvonlinelawlibrary
The Rules of Procedure of the Office of the Ombudsman are clearly procedural and no vested right of the
petitioner is violated as he is considered preventively suspended while his case is on appeal. Moreover, in
the event he wins on appeal, he shall be paid the salary and such other emoluments that he did not receive by
reason of the suspension or removal. Besides, there is no such thing as a vested interest in an office, or even
an absolute right to hold office. Excepting constitutional offices which provide for special immunity as
regards salary and tenure, no one can be said to have any vested right in an office.
xxxx
x x x Here, Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman, as amended, is
categorical, an appeal shall not stop the decision from being executory.
Moreover, Section 13 (8), Article XI of the Constitution authorizes the Office of the Ombudsman to
promulgate its own rules of procedure. In this connection, Sections 18 and 27 of the Ombudsman Act of
1989 also provide that the Office of the Ombudsman has the power to "promulgate its rules of procedure for
the effective exercise or performance of its powers, functions and duties" and to amend or modify its rules
as the interest of justice may require. For the CA to issue a preliminary injunction that will stay the
penalty imposed by the Ombudsman in an administrative case would be to encroach on the rule-
making powers of the Office of the Ombudsman under the Constitution and RA 6770 as the injunctive
writ will render nugatory the provisions of Section 7, Rule III of the Rules of Procedure of the Office
of the Ombudsman.
Clearly, Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman supersedes the
discretion given to the CA in Section 12, Rule 43 of the Rules of Court when a decision of the Ombudsman
in an administrative case is appealed to the CA. The provision in the Rules of Procedure of the Office of the
Ombudsman that a decision is immediately executory is a special rule that prevails over the provisions of the
Rules of Court. Specialis derogat generali. When two rules apply to a particular case, that which was
specially designed for the said case must prevail over the other. [Emphases supplied]
Thus, Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman, as amended by
Administrative Order (A.O.) No. 17, is categorical in providing that an appeal shall not stop an Ombudsman
decision from being executory. This rule applies to the appealable decisions of the Ombudsman, namely,
those where the penalty imposed is other than public censure or reprimand, or a penalty of suspension of
more than one month, or a fine equivalent to more than one month's salary. Hence, the dismissal of De Jesus
and Parungao from the government service is immediately executory pending appeal.
The aforementioned Section 7 is also clear in providing that in case the penalty is removal and the
respondent wins his appeal, he shall be considered as having been under preventive suspension and shall be
paid the salary and such other emoluments that he did not receive by reason of the removal. As explained
above, there is no such thing as a vested interest in an office, or an absolute right to hold office, except
constitutional offices with special provisions on salary and tenure. The Rules of Procedure of the
Ombudsman being procedural, no vested right of De Jesus and Parungao would be violated as they would be
considered under preventive suspension, and entitled to the salary and emoluments they did not receive in
the event that they would win their appeal.

The ratiocination above also clarifies the application of Rule 43 of the Rules of Court in relation to Section 7
of the Rules of Procedure of the Office of the Ombudsman. The CA, even on terms it may deem just, has no
discretion to stay a decision of the Ombudsman, as such procedural matter is governed specifically by the
Rules of Procedure of the Office of the Ombudsman.

The CA's issuance of a preliminary mandatory injunction, staying the penalty of dismissal imposed by the
Ombudsman in this administrative case, is thus an encroachment on the rule-making powers of the
Ombudsman under Section 13 (8), Article XI of the Constitution, and Sections 18 and 27 of R.A. No. 6770,
which grants the Office of the Ombudsman the authority to promulgate its own rules of procedure. The
issuance of an injunctive writ renders nugatory the provisions of Section 7, Rule III of the Rules of
Procedure of the Office of the Ombudsman.10

From the foregoing elaboration, there can be no cavil that respondents do not have any right to a stay of the
Ombudsman's decision dismissing them from service. Perforce, the BSU-BOR acted properly in issuing
Resolution No. 18, series of 2005, dated August 22, 2005, pursuant to the order of the Ombudsman, as its
legally-mandated duty. The CA's Resolution granting respondents' prayer for a writ of preliminary
injunction is patently erroneous.

WHEREFORE, the petition is GRANTED. The Resolution of the Court of Appeals, dated April 7, 2006,
is SET ASIDE. The Order of the Regional Trial Court of Batangas City, Branch 4, dated September 26,
2005 in Civil Case No. 7775, is REINSTATED.

SO ORDERED.

58
THIRD DIVISION
[G.R. No. 185954 : February 16, 2010]
OFFICE OF THE OMBUDSMAN, PETITIONER, VS. MAXIMO D. SISON, RESPONDENT.
DECISION
VELASCO JR., J.:
The Case
Before us is a Petition for Review on Certiorari under Rule 45 assailing and seeking to set aside the
Resolution[1] dated December 18, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 96611,
entitled Maximo D. Sison v. Fr. Noel Labendia for Himself and in Representation of Isog Han Samar
Movement, Diocese of Calbayog, Catbalogan, Samar. The CA Resolution denied petitioner Office of the
Ombudsman's Omnibus Motion for Intervention and to Admit Attached Motion for Reconsideration of the
CA's June 26, 2008 Decision.[2]
The Facts
On October 11, 2004, the Isog Han Samar Movement, represented by Fr. Noel Labendia of the Diocese of
Calbayog, Catbalogan, Samar, filed a letter-complaint addressed to then Ombudsman, Hon. Simeon
Marcelo, accusing Governor Milagrosa T. Tan and other local public officials[3] of the Province of Samar,
including respondent Maximo D. Sison, of highly anomalous transactions entered into by them amounting to
several millions of pesos. Sison was the Provincial Budget Officer.
The letter-complaint stemmed from the audit investigation dated August 13, 2004 conducted by the Legal
and Adjudication Office (LAO), Commission on Audit (COA), which found, among others, that various
purchases totaling PhP 29.34 million went without proper bidding procedures and documentations; that
calamity funds were expended without a State of Calamity having been declared by the President; and that
purchases for rice, medicines, electric fans, and cement were substantially overpriced.
The Special Audit Team, which was created under LAO Office Order No. 2003-059 dated July 7, 2003,
summarized the corresponding COA audit findings and observations, to wit:
1. Rules and regulations pertaining to procurement of supplies and materials were consciously and
continually violated as disclosed in the verification of selected purchases of the Province. Below
were the findings and observations:
a. Purchases of various items, totaling at least PhP 29.34 million and allegedly procured
through public bidding, were found highly irregular for lack of proper bidding procedures
and documentation;
b. At least PhP 28.165 million worth of purchases through repeat orders were made by the
Province without observing the pertinent law, rules and regulations governing this mode
of procurement; and
c. Emergency purchases of medicines and assorted goods totaling PhP 14.67 million were
found not complying with the requirements set forth under the Rules and Regulations on
59
Supplies and Property Management in Local Governments (RRSPMLG). Moreover, the
purchases were charged against the calamity fund, despite absence of any declaration
from the President that Samar was under a state of calamity, in violation of Sec. 324(d) of
R.A. 7160.
2. Inconsistencies in the dates of supporting documents relating to the purchases discussed in finding
No. 1 were so glaring that they raised doubts on the validity of the transactions per se;
3. The use of the 5% budgetary reserves for calamity as funding source of emergency purchases was
not legally established, there being no declaration from the Office of the President that Samar was
under a state of calamity, as required under Sec. 324(d) of R.A. 7160;
4. Splitting of requisitions and purchase orders was resorted to in violation of COA Circular No. 76-
41 dated July 30, 1976;
5. There was overpricing in the purchase of rice, medicines, electric fans and cement in the amount of
PhP 580,000.00, PhP 322,760.00, PhP 341,040.00, and PhP 3.6 million, respectively. An
overpayment was also committed in the payments of cement in the amount of PhP 96,364.09;
6. Other observations gathered corollary to the purchases made are the following:
a. Purchase Orders were not duly accomplished to include a complete description of the
items to be purchased, the delivery date and the terms of payment, in violation of the
provisions of Section 74 and other corollary provisions of RRSPMLG. Some were even
acknowledged by suppliers;
b. At least 36 vouchers/claims were not supported with an official receipt, in violation of the
provisions of Section 4 of PD 1445 that all disbursements must be supported with
complete documentation; and
c. Advanced deliveries of medicines and assorted goods were made on some purchases even
before the purchase orders were prepared and before the public biddings were conducted.
7. The necessity and veracity of the distribution of t-shirts/caps, medicines, assorted goods and
cement purchased by the Province of Samar could not be established due to rampant
inconsistencies in dates, quantities, as well as the signatures of the alleged recipients in the
Requisition and Issue Slip; and,
8. Financial Assistance (FA)/Assistance to Individuals in Crisis Situation (AICS) totaling at least PhP
5.4 million in 2002 and PhP 2.78 million as of April 2003 were granted to various applicant-
recipients without subjecting them to the guidelines set forth by the Department of Social Welfare
and Development (DSWD).[4] x x x
On January 24, 2005, the Office of the Ombudsman, through Director Jose T. De Jesus, Jr., found basis to
proceed with the administrative case against the impleaded provincial officials of Samar, docketed as OMB-
C-A-05-0051-B. The latter were then required to file their counter-affidavits and countervailing evidence
against the complaint.
In his counter-affidavit, Sison vehemently denied the accusations contained in the letter-complaint and
claimed his innocence on the charges. He asserted that his function is limited to the issuance of a
certification that an appropriation for the requisition exists, that the corresponding amount has been
obligated, and that funds are available. He did not, in any way, vouch for the truthfulness of the certification
issued by the requesting parties. In addition, he averred that he never participated in the alleged irregularities
as shown in the minutes and attendance sheet of the bidding.
Further, he alleged that not one of the documentary evidences so far attached in the letter-complaint bore his c. On Bid Nos. 078-2002, 448-2002, 931-2002, 1230-2001, 411-2002, 944-2002, 1244-
signature and that he was neither factually connected nor directly implicated in the complaint. 2002, 1407-2001, 198-2002, 316-2002 and 431-2002: (a) to DETERMINE whether
actual public biddings were held relative to the above-mentioned transactions; (b) to
On May 6, 2005, Sison submitted his Position Paper to the Office of the Ombudsman and reiterated that he CHECK the veracity of the documents relative to the repeat orders made; (c) to
had not participated in the alleged anomalous purchases and use of public funds by the Province of Samar. ASCERTAIN the other public officials who may be held administratively liable therefor;
and (d) to FILE the corresponding Complaint, if warranted.
On August 22, 2006, the Office of the Ombudsman rendered a Decision, finding Sison and several other
local officials of the Province of Samar guilty of grave misconduct, dishonesty, and conduct prejudicial to
Accordingly, let a copy of this Memorandum be furnished the Fact- Finding and Intelligence Office for its
the best interest of the service and dismissing him from service. The dispositive portion of the Decision
appropriate action.
reads:
SO ORDERED.[5] (Emphasis supplied.)
VIEWED IN THE FOREGOING LIGHT, DECISION is hereby rendered as follows:
1. Respondents ROLANDO B. MONTEJO, DAMIANO Z. CONDE, JR., ROMEO C.
Aggrieved, Sison appealed to the CA via a Petition for Review under Rule 43, docketed as CA-G.R. SP No.
REALES, MAXIMO D. SISON, AURELIO A. BARDAJE and NUMERIANO C. LEGASPI are
96611.
FOUND GUILTY of GRAVE MISCONDUCT, DISHONESTY and CONDUCT PREJUDICIAL
TO THE BEST INTEREST OF THE SERVICE, and are METED the penalty of DISMISSAL
On June 26, 2008, the CA rendered a decision reversing and setting aside the decision of the Office of the
FROM SERVICE, and shall carry with it the cancellation of eligibility, forfeiture of retirement
Ombudsman against Sison. The fallo of the CA decision reads:
benefits, and the perpetual disqualification for re-employment in the government service.

WHEREFORE, the decision of the Ombudsman dated 22 August 2006 in OMB-C-A-05-0051-B in so far as
it finds the herein petitioner MAXIMO D. SISON administratively liable for grave misconduct, dishonesty
Accordingly, Governor Milagrosa T. Tan and Executive Director Presentacion R. Montesa of the Bureau of
and conduct prejudicial to the best interest of service is hereby REVERSED and SET ASIDE for
Local Government Finance, Department of Finance, are respectfully directed to implement this Order upon
insufficiency of evidence. Accordingly, he is absolved from administrative liability as charged.
receipt hereof and to forthwith inform the Office of compliance herewith.
2. The administrative complaint against respondents MILAGROSA T. TAN, FE ORTEGA TAN
SO ORDERED.[6]
ARCALES, SUSANO DIMAKILING SALURIO, BARTOLOME P. FIGUEROA, ANTONIO DE
LEON BOLASTIG, III, ROSENAIDA A. ROSALES and BARTOLOME R. CASTILLO III is
DISMISSED in view of their re-election in May 2004; In ruling thus, the CA held that the Office of the Ombudsman failed to adduce substantial evidence in order
to convict Sison. Moreover, it reasoned that Sison's responsibility as Provincial Budget Officer was to
ensure that appropriations exist in relation to the emergency purchase being made and that he had no hand or
discretion in characterizing a particular purchase as emergency in nature. Hence, he cannot be held
3. The administrative complaint against ERNESTO CARCILLAR ARCALES, FELIX T.
administratively liable for simply attesting to the existence of appropriations for a certain purpose, save if
BABALCON, JR., JIMMY R. DY, JUAN COLINARES LATORRE, JR., MARIA LOURDES
such certification is proved to be false.
CORTEZ UY, BIENVENIDA P. REPOL and RAMON P. DEAN, JR., who are no longer public
officials, is DISMISSED.
On July 22, 2008, the Office of the Ombudsman filed an Omnibus Motion for Intervention and to Admit
4. For insufficiency of evidence, the administrative complaint against ANAMIE P. MANATAD-
Attached Motion for Reconsideration, which was subsequently denied by the CA in its assailed resolution of
NUNEZ and ROSIE AMARO VILLACORTE is DISMISSED.
December 18, 2008.
5. The Fact-Finding and Intelligence Office is DIRECTED to conduct further fact-finding
investigations on the following:
Hence, we have this petition.
a. On DV Nos. 221-2002-12-083 and 221-2002-11-065: (a) to DETERMINE the other
public officials who may be held administratively liable; and (b) to FILE, if necessary,
the corresponding Complaint; The Issues
b. On Bid Nos. 079-2002, 442-2002, 554-2002, 861-2002, 937-2002, 947-2002, 1221-2002,
1375-2002, 1411-2002, 007-2003, 014-2003, 023-2003, 047-2003 and 082-2002: (a) to
VERIFY whether actual public biddings took place relative to the transactions covered by
these bids; (b) to CHECK the veracity of the documents relative to the repeat orders I
made; (c) to DETERMINE the other public officials who may appear to be
administratively liable therefor; and (d) to FILE, if warranted, the corresponding
Complaint; and Whether the [CA] gravely erred in denying petitioner's right to intervene in the proceedings, considering that
(a) the Office of the Ombudsman has sufficient legal interest warranting its intervention in the proceedings
before the [CA] since it rendered the subject decision pursuant to its administrative authority over public

60
officials and employees; and (b) contrary to the appellate court a quo's ruling, petitioner Office of the
Ombudsman filed its Omnibus Motion to Intervene and to Admit Attached Motion for Reconsideration on a
patently erroneous decision of the [CA] which has not yet attained finality.
II
Whether the [CA] erred in ruling that the finding of the Office of the Ombudsman was not supported by
substantial evidence.
III
Whether the [CA] erred in giving due course to respondent's petition for review when this was prematurely
filed as it disregarded the well-entrenched jurisprudential doctrine of exhaustion of administrative remedies.
Our Ruling
The appeal lacks merit.
Intervention Is Discretionary upon the Court
The pivotal issue in this case is whether the Office of the Ombudsman may be allowed to intervene and seek
reconsideration of the adverse decision rendered by the CA.
In its Decision, the CA did not allow the Office of the Ombudsman to intervene, because (1) the Office of
the Ombudsman is not a third party who has a legal interest in the administrative case against petitioner; (2)
the Omnibus Motion for Intervention was filed after the CA rendered its Decision; and (3) the Office of the
Ombudsman was the quasi-judicial body which rendered the impugned decision.
In its Petition, however, the Office of the Ombudsman asserts that it has sufficient legal interest to warrant
its intervention in the proceedings, since it rendered the subject decision pursuant to its administrative
authority over public officials and employees. Further, it contends that the Omnibus Motion to Intervene
was timely filed, since, at the time of its filing, the decision of the CA had not yet attained finality.
We are not persuaded.
It is fundamental that the allowance or disallowance of a Motion to Intervene is addressed to the sound
discretion of the court.[7] The permissive tenor of the rules shows the intention to give to the court the full
measure of discretion in permitting or disallowing the intervention,[8] thus:
SECTION 1. Who may intervene. - A person who has a legal interest in the matter in litigation, or in the
success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a
distribution or other disposition of property in the custody of the court or of an officer thereof may, with
leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention
will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the
intervenor's rights may be fully protected in a separate proceeding.
SECTION 2. Time to intervene. - The motion to intervene may be filed at any time before rendition of
61
judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion and
served on the original parties.[9] (Emphasis supplied.)
Simply, intervention is a procedure by which third persons, not originally parties to the suit but claiming an
interest in the subject matter, come into the case in order to protect their right or interpose their claim. [10] Its
main purpose is to settle in one action and by a single judgment all conflicting claims of, or the whole
controversy among, the persons involved.[11]
To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur: (1) the movant has
a legal interest in the matter in litigation; and (2) intervention must not unduly delay or prejudice the
adjudication of the rights of the parties, nor should the claim of the intervenor be capable of being properly
decided in a separate proceeding. The interest, which entitles one to intervene, must involve the matter in
litigation and of such direct and immediate character that the intervenor will either gain or lose by the direct
legal operation and effect of the judgment.[12]
In support of its argument that it has legal interest, the Office of the Ombudsman cites Philippine National
Bank v. Garcia, Jr. (Garcia). [13] In the said case, the Philippine National Bank (PNB) imposed upon its
employee, Garcia, the penalty of forced resignation for gross neglect of duty. On appeal, the Civil Service
Commission (CSC) exonerated Garcia from the administrative charges against him. In accordance with the
ruling in Civil Service Commission v. Dacoycoy,[14] this Court affirmed the standing of the PNB to appeal to
the CA the CSC resolution exonerating Garcia. After all, PNB was the aggrieved party which complained of
Garcia's acts of dishonesty. Should Garcia be finally exonerated, it might then be incumbent upon PNB to
take him back into its fold. PNB should, therefore, be allowed to appeal a decision that, in its view,
hampered its right to select honest and trustworthy employees, so that it can protect and preserve its name as
a premier banking institution in the country.
Based on the facts above, the Office of the Ombudsman cannot use Garcia to support its intervention in the
appellate court for the following reasons:
First, Sison was not exonerated from the administrative charges against him, and was, in fact, dismissed for
grave misconduct, dishonesty, and conduct prejudicial to the best interest of the service by the Office of the
Ombudsman in the administrative case, OMB-C-A-05-0051-B. Thus, it was Sison who appealed to the CA
being, unquestionably, the party aggrieved by the judgment on appeal.
Second, the issue here is the right of the Office of the Ombudsman to intervene in the appeal of its decision,
not its right to appeal.
And third, Garcia should be read along with Mathay, Jr. v. Court of Appeals[15] and National Appellate
Board of the National Police Commission v. Mamauag (Mamauag),[16] in which this Court qualified and
clarified the exercise of the right of a government agency to actively participate in the appeal of decisions in
administrative cases. In Mamauag, this Court ruled:
RA 6975 itself does not authorize a private complainant to appeal a decision of the disciplining authority.
Sections 43 and 45 of RA 6975 authorize `either party' to appeal in the instances that the law allows appeal.
One party is the PNP member-respondent when the disciplining authority imposes the penalty of demotion
or dismissal from the service. The other party is the government when the disciplining authority imposes the
penalty of demotion but the government believes that dismissal from the service is the proper penalty.
However, the government party that can appeal is not the disciplining authority or tribunal which previously
heard the case and imposed the penalty of demotion or dismissal from the service. The government party
appealing must be the one that is prosecuting the administrative case against the respondent. Otherwise, an
anomalous situation will result where the disciplining authority or tribunal hearing the case, instead of being
impartial and detached, becomes an active participant in prosecuting the respondent. Thus, in Mathay, Jr. v.
Court of Appeals, decided after Dacoycoy, the Court declared:
To be sure when the resolutions of the Civil Service Commission were brought to the Court of Appeals, the
Civil Service Commission was included only as a nominal party. As a quasi-judicial body, the Civil Service
Commission can be likened to a judge who should "detach himself from cases where his decision is
appealed to a higher court for review."
In instituting G.R. No. 126354, the Civil Service Commission dangerously departed from its role as
adjudicator and became an advocate. Its mandated function is to "hear and decide administrative cases
instituted by or brought before it directly or on appeal, including contested appointments and to review
decisions and actions of its offices and agencies," not to litigate.
Clearly, the Office of the Ombudsman is not an appropriate party to intervene in the instant case. It must
remain partial and detached. More importantly, it must be mindful of its role as an adjudicator, not an
advocate.
It is an established doctrine that judges should detach themselves from cases where their decisions are
appealed to a higher court for review. The raison d'etre for such a doctrine is the fact that judges are not
active combatants in such proceeding and must leave the opposing parties to contend their individual
positions and the appellate court to decide the issues without the judges' active participation.[17] When judges
actively participate in the appeal of their judgment, they, in a way, cease to be judicial and have become
adversarial instead.[18]
In Pleyto v. Philippine National Police Criminal Investigation and Detection Group (PNP-CIDG),[19] the
Court applied this doctrine when it held that the CA erred in granting the Motion to Intervene filed by the
Office of the Ombudsman, to wit:
The court or the quasi-judicial agency must be detached and impartial, not only when hearing and resolving
the case before it, but even when its judgment is brought on appeal before a higher court. The judge of a
court or the officer of a quasi-judicial agency must keep in mind that he is an adjudicator who must settle the
controversies between parties in accordance with the evidence and applicable laws, regulations and/or
jurisprudence. His judgment should already clearly and completely state his findings of fact and law. There
must be no more need for him to justify further his judgment when it is appealed before appellate courts.
When the court judge or the quasi-judicial officer intervenes as a party in the appealed case, he inevitably
forsakes his detachment and impartiality, and his interest in the case becomes personal since his objective
now is no longer only to settle the controversy between the original parties (which he had already
accomplished by rendering his judgment), but more significantly, to refute the appellant's assignment of
errors, defend his judgment, and prevent it from being overturned on appeal.
Likewise, the facts reveal that this case was elevated to the CA via a verified Petition for Review under Rule
43 of the Rules of Court and Supreme Court Administrative Circular No. 1-95 dated May 16, 1995, which
62
govern appeals to the CA from judgments or final orders of quasi-judicial agencies.
Rule 43, as well as Administrative Circular No. 1-95, provides that the petition for review shall state the full
names of the parties to the case without impleading the court or agencies either as petitioners or
respondents.[20] Thus, the only parties in such an appeal are the appellant as petitioner and appellee as
respondent. The court or, in this case, the administrative agency that rendered the judgment appealed from,
is not a party in the said appeal.
Therefore, the Office of the Ombudsman does not have the legal interest to intervene. As the CA held
correctly:
The Office of the Ombudsman is not a third party who has a legal interest in the administrative case against
the petitioner such that it would be directly affected by the judgment that this Court had rendered. It must be
remembered that the legal interest required for an intervention must be direct and immediate in character.
Lest it be forgotten, what was brought on appeal before this Court is the very Decision by the Office of the
Ombudsman. Plainly, the Office of the Ombudsman, as an adjudicator, and not an advocate, has no legal
interest at stake in the outcome of this Rule 43 Petition.[21]
Motion for Intervention Was Not Filed on Time
Furthermore, the Rules provides explicitly that a motion to intervene may be filed at any time before
rendition of judgment by the trial court. In the instant case, the Omnibus Motion for Intervention was
filed only on July 22, 2008, after the Decision of the CA was promulgated on June 26, 2008.
In support of its position, petitioner cites Office of the Ombudsman v. Samaniego.[22] That case, however, is
not applicable here, since the Office of the Ombudsman filed the motion for intervention during the
pendency of the proceedings before the CA.
It should be noted that the Office of the Ombudsman was aware of the appeal filed by Sison. The Rules of
Court provides that the appeal shall be taken by filing a verified petition for review with the CA, with proof
of service of a copy on the court or agency a quo.[23] Clearly, the Office of the Ombudsman had sufficient
time within which to file a motion to intervene. As such, its failure to do so should not now be
countenanced. The Office of the Ombudsman is expected to be an "activist watchman," not merely a passive
onlooker.[24]
In this case, it cannot be denied that the Omnibus Motion for Intervention was belatedly filed. As we held
in Rockland Construction Co., Inc. v. Singzon, Jr., no intervention is permitted after a decision has already
been rendered.[25]
In light of the foregoing considerations, all other issues raised in the petition are rendered moot and
academic and no further discussion is necessary.
WHEREFORE, the petition is DENIED. The CA Resolution dated December 18, 2008 in CA-G.R. SP No.
96611 is AFFIRMED.
SO ORDERED.
 SECOND DIVISION
G.R. No. 193809, March 23, 2015
SATURNINO NOVECIO, GAVINO NOVECIO, ANASTACIO GOLEZ, ABUNDIO SOMBILON,
BERTING RODRIGUEZ, MELITON CATALAN, Petitioners, v. HON. RODRIGO F. LIM, JR., AS
CHAIRMAN, HON. LEONCIA R. DIMAGIBA AS PONENTE AND AS MEMBER AND HON.
ANGELITA A. GACUTAN AS MEMBER, FORMER TWENTY-THIRD DIVISION, COURT OF
APPEALS, MINDANAO STATION, HON. JUDGE BENJAMIN ESTRADA, IN HIS CAPACITY AS
PRESIDING JUDGE OF BRANCH 9, RTC, MALAYBALAY, BUKIDNON, MARIA CARMEN J.
TUAZON, REP. BY HER ATTORNEY-IN-FACT, LOPE DUROTAN, Respondents.
VERGELIO ROSALES, LUIS TEQUILIO, GREGORIO PANANGIN, JOSEPH RODRIQUEZ,
EDDIE RODRIGUEZ, Petitioners, v. HON. RODRIGO F. LIM, JR., AS CHAIRMAN, HON.
LEONCIA R. DIMAGIBA AS PONENTE AND AS MEMBER DESIGNATED AS ACTING
CHAIRPERSON, PER SPECIAL ORDER NO. 1955 DATED MARCH 23, 2015. DESIGNATED AS
ACTING MEMBER VICE ASSOCIATE JUSTICE ANTONIO T. CARPIO, PER SPECIAL ORDER
NO. 1956 DATED MARCH 23, 2015. AND HON. ANGELITA A. GACUTAN AS MEMBER,
FORMER TWENTY-THIRD DIVISION, COURT OF APPEALS, MINDANAO STATION, HON.
JUDGE BENJAMIN ESTRADA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 9,
RTC, MALAYBALAY, BUKIDNON, MANUEL V. NIETO, REP. BY HIS ATTORNEY-IN-FACT,
LOPE DUROTAN, Respondent.
DECISION
BRION, J.:
1
We resolve the petition for certiorari filed under Rule 65 of the Rules of Court with prayer for the issuance
of a temporary restraining order and/or writ of preliminary injunction. The petition assails the
resolutions2 dated January 28, 2010 and July 16, 2010 of the Court of Appeals (CA) in CA-G.R.SP No.
02863.
The assailed resolutions denied the petitioners' prayer for the issuance of a preliminary injunction pending
resolution of the Petition for Review filed in the CA. The subject of the Petition for Review was the
consolidated decision of the Regional Trial Court (RTC), Branch 9, Malaybalay, Bukidnon, which reversed
the decision of the Municipal Trial Court (MTC) of Quezon, Bukidnon. The MTC dismissed the forcible
entry cases filed by the respondents against the petitioners.
On October 18, 2010, this Court issued a Temporary Restraining Order (TRO) enjoining the RTC from
executing its consolidated decision.3
The Factual Antecedents
Respondents Maria Carmen J. Tuazon and Manuel V. Nieto, represented by their attorney-in-fact, Lope
Durotan (the respondents), filed complaints4 for forcible entry with damages against petitioners Saturnino
Novecio, Gavino Novecio, Anastacio Golez, et al. (the petitioners).5
The respondents alleged that on February 15, 2004, the petitioners, by force, intimidation, threat, strategy
and stealth, unlawfully squatted and took possession of several portions of land with an area of eight (8)
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hectares, described as Project No. 9, Block 1, LC Map No. 777. The petitioners allegedly planted crops,
erected makeshift shelters, and continue to plant and /or improve the shelters as of the filing of the
complaints for forcible entry, all without the consent and/or against the will of the respondents.
The petitioners, on the other hand, contended that they have already been in possession of the land for more
than two years when the complaints were filed. They maintained that they have planted the land with corn,
durian, coconut, mango, jackfruit, rambutan, etc. for their livelihood. They also alleged that they were
harassed by some men armed with shotguns and pistols on February 12, 2004. 6
The petitioners further maintained that Manuel V. Nieto, father of Maria Carmen J. Tuazon, had previous
landholding in the area but the same was covered by the Comprehensive Agrarian Reform Program (CARP)
and so it was subdivided in favor of the tenants. 7
The MTC's Ruling
The MTC ruled in favor the petitioners.8
The MTC found that the respondents anchored their alleged prior possession on the fact that they have
applied title for the land as shown by a certification authorizing land survey. 9 Other than this, the
respondents had no evidence of their actual and physical possession of the land. The MTC also found that
they were not even residents of the place and never personally appeared in court during trial.
The petitioners, on the other hand, claimed their prior possession on the fact that their livelihood as fisher
folks and farmers require them to live by the riverbank where the land is located. The petitioners also
asserted that they have been occupying the land for more than two (2) years when the complaints were filed.
The MTC held that the certification issued by the barangay captain that the petitioners are residents of the
place is a very strong evidence of their prior physical possession. 10
The MTC concluded: "[a]s between a resident and a non-resident the likelihood is that the resident has the
prior physical possession because of his accessibility to the area." 11
The dispositive portion of the MTC decision reads:
WHEREFORE, by preponderance of evidence showing defendants' prior physical possession of the land
and the filing of the complaint beyond the one-year period[,] judgment is rendered in favor of the
defendants DISMISSING the cases.12
The respondents appealed the MTC decision to the RTC.
The RTC's Ruling
The RTC reversed the MTC decision.13
The RTC held that the MTC ignored some pieces of evidence, warranting the reversal of the decision.
The RTC ruled that the MTC should have given credence to the certification issued by the Department of
Environment and Natural Resources - Community Environment and Natural Resources Office (DENR-
CENRO) showing that the land in litigation is the subject of an application for title and claim by the
respondents. The RTC also took judicial notice of the request for authority to conduct a survey over the
subject property, which provides that "the parcel of land herein treated was an unsurveyed land and Manuel
V. Nieto was the identified occupant and tiller of the land."14
In view of these, the RTC ruled that the respondents were the actual occupants of the property in litigation
long before the petitioners had taken possession of the same property. The RTC ordered the petitioners'
ejectment.
The dispositive portion of the RTC decision reads:
WHEREFORE, premises considered and finding the appeal to be with merit, the assailed Consolidated
Decision dated November 7, 2005 of the Municipal Trial Court of Quezon, Bukidnon is hereby reversed and
set aside, finding in favor of plaintiff-appellants, ordering the ejectment of all defendants-appellees and
"John Does" in both cases and for them to turn over peaceful possession/occupancy of the landholding in
litigation. No pronouncement as to costs.15
The Proceedings before the CA
The petitioners filed on April 30, 2009 a Petition for Review16 with the CA - Mindanao Station, assailing the
judgment of the RTC.
As the respondents sought the execution of the RTC judgment, the petitioners filed on May 14, 2010 an
Extremely Urgent Application for Writ of Preliminary Injunction and Immediate Issuance of Temporary
Restraining Order.17
On July 13, 2009, the CA issued a TRO effective for sixty (60) days. Meanwhile, the CA directed the parties
to submit their memoranda and position papers.
On January 28, 2010, the CA issued the first assailed resolution denying the petitioners' application for
preliminary injunction.18 The CA, without necessarily resolving the petition on the merits, held that the
petitioners were not entitled to the relief demanded under Rule 58 of the Rules of Court. The petitioners'
Motion for Reconsideration was denied on July 16, 2010.
The Petition
The petitioners impute grave abuse of discretion on the CA in denying their prayer for injunction pending
resolution of the Petition for Review.
The petitioners argue that the CA denied their prayer for preliminary injunction despite the pressing need for
it to prevent grave and irreparable injury to them. They emphasize that the records clearly show that they
were the prior possessors of the subject lot. In fact, the lot has been their home and source of livelihood for
several years prior to the institution of the forcible entry cases.
The respondents filed their comment19 on December 3, 2010. They argue that grave abuse of discretion
means such capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. Mere abuse of
discretion, according to the respondents, is not enough. The respondents maintain that the petitioners are not
entitled to the injunctive relief since they have not established a clear legal right for its issuance.
This Court, acting on the petitioners' prayer, issued a TRO on October 18, 2010, enjoining the RTC
from executing its decision. The TRO remains effective until this day.
Finally, it appears that the CA has yet to issue a decision on the Petition for Review. 20
The Issue
64
The sole issue is whether or not the CA acted with grave abuse of discretion, amounting to lack or excess of
jurisdiction, when it denied the petitioners' prayer for preliminary injunction.
The Court's Ruling
We find the petition meritorious.
We note at the outset that the petition merely assails the interlocutory orders of the CA. Thus, the remedy
of certiorari under Rule 65 is appropriate as the assailed resolutions are not appealable and there is no plain,
speedy or adequate remedy in the ordinary course of law. 21
Our decision in this case is without prejudice to the Petition for Review pending in the CA. Our judgment is
limited to the resolutions of the C A denying the prayer for the issuance of a preliminary injunction.
Subject to this clarification, we find that the CA committed grave abuse of discretion when it denied the
injunctive relief prayed for by the petitioners.
There is grave abuse of discretion when an act is (1) done contrary to the Constitution, the law or
jurisprudence or (2) executed whimsically, capriciously or arbitrarily, out of malice, ill will or personal
bias.22
We quote the assailed CA resolutions. The January 28, 2010 Resolution states:
Without necessarily resolving the instant petition on the merits, We find [the] petitioners not entitled to the
relief demanded under Rule 58 of the Revised Rules of Procedure. Thus, [the] petitioners' application for the
issuance of [a] Writ of Preliminary Injunction is hereby DENIED.
The July 16, 2010 Resolution reads:
Upon careful evaluation of [the] petitioners' Motion, We find no cogent and compelling reasons to warrant
reversal of Our Resolution. The arguments raised by [the] petitioners were mere reiteration and already
considered and passed upon by this Court in denying [the] petitioners' application for issuance of the Writ of
Preliminary Injunction.
A review of the records, however, shows that the CA ignored relevant facts that would have justified the
issuance of a preliminary injunction. Contrary to established jurisprudence, the CA also denied the prayer
for preliminary injunction without giving the factual and legal bases for such denial.
Section 3, Rule 58 of the Rules of Court provides that a preliminary injunction may be granted when the
following have been established:
i. That the applicant is entitled to the relief demanded, and the whole or part of such relief consist in
restraining the commission or continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or perpetually;
ii. That the commission, continuance or non-performance of the act or acts complained of during the
litigation would probably work injustice to the applicant; or
iii. That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring
or suffering to be done some act or acts probably in violation of the rights of the applicant
respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.
A preliminary injunction is proper when the plaintiff appears to be clearly entitled to the relief sought and
has substantial interest in the right sought to be defended. As this Court has previously ruled, "while the
existence of the right need not be conclusively established, it must be clear." 23
A writ of preliminary injunction is generally based solely on initial or incomplete evidence. Such evidence
need only be a sampling intended merely to give the court an evidence of justification for a preliminary
injunction pending the decision on the merits of the case, and is not conclusive of the principal action which
has yet to be decided.24
In a prayer for preliminary injunction, the plaintiff is not required to submit conclusive and complete
evidence. He is only required to show that he has an ostensible right to the final relief prayed for in his
complaint.25
In this case, the petitioners have adequately shown their entitlement to a preliminary injunction. First, the
relief demanded consists in restraining the execution of the RTC decision ordering their ejectment from the
disputed land. Second, their ejectment from the land from which they derive their source of livelihood
would work injustice to the petitioners. Finally, the execution of the RTC decision is probably in violation of
the rights of the petitioners, tending to render the MTC judgment dismissing the forcible entry cases
ineffectual.
Moreover, the court in granting or dismissing an application for a writ of preliminary injunction based on
the pleadings of the parties and their respective evidence must state in its order the findings and conclusions
based on the evidence and the law. This is to enable the appellate court to determine whether the trial court
committed grave abuse of its discretion amounting to excess or lack of jurisdiction in resolving, one way or
the other, the plea for injunctive relief.26
Thus, we do not understand why the CA denied the prayer for preliminary injunction without citing any
legal or factual basis for the denial. The CA resolution provides: "[We] find [the] petitioners not entitled to
the relief demanded under Rule 58 of the Revised Rules of Civil Procedure."
Neither does the resolution denying the petitioners' Motion for Reconsideration contain any factual and legal
bases for the denial. It only provides that "[u]pon careful evaluation of the petitioners' Motion, We find no
cogent and compelling reasons to warrant reversal of Our Resolution."
We therefore have no idea why and how the CA came to the conclusion that the petitioners are not entitled
to the injunctive relief. Hence, we are forced to go beyond the function of a certiorari under Rule 65 and
examine the factual findings of the MTC and the RTC.
The MTC found that the petitioners have been in actual and physical possession of the land for more than
two (2) years prior to the institution of the complaints for forcible entry.27 The MTC also found that the
respondents were not even sure how the petitioners entered the land. In their complaints, they alleged that
petitioners entered the land by means of "force, intimidation, threat, stealth and strategy," a shotgun
allegation which shows that respondents' lack knowledge of how the petitioners entered the disputed
property.
We quote the MTC decision with approval, viz:
xxx Force, intimidation[,] and threat usually connote actual knowledge of dispossession. One cannot force,
intimidate or threaten another who is not around. In stealth and strategy[,] the actual entry is usually done
without the knowledge of the plaintiff. If they are not sure how [the] defendants entered the land[,] the
likelihood is that they also do not know when [the] defendants] entered the land. The court is apt to believe
65
that [the] defendants have been in possession of the land for more than 2 years. And under Rule 70[,] the
action of forcible entry must be filed within one year from dispossession. The filing of these cases was
beyond the one-year period.28
The RTC, on the other hand, relied on a mere request for authority to conduct a land survey, allegedly
showing that respondent Manuel V. Nieto was the occupant and tiller of the land.
However, this document does not prove prior possession of the subject land. It only points to the fact that
there was an application for a land title in the name of one of the respondents, which application
was not even shown to have been granted. This document merely authorized the survey of the land; the
declaration regarding possession was just incidental to the application for land survey.
Between the clear findings of the MTC, which conducted the trial of the forcible entry cases, and the RTC
acting as an appellate court, which relied on documentary evidence but without sufficiently explaining how
such evidence would prove prior possession, we are inclined to give weight to the MTC's ruling.
This Court has held:
xxx The Court generally recognizes the profundity of conclusions and findings of facts reached by the trial
court and hence sustains them on appeal except for strong and cogent reasons inasmuch as the trial court is
in a better position to examine real evidence and observe the demeanor of witnesses in a case. No clear
specific contrary evidence was cited by the respondent appellate court to justify the reversal of the lower
court's findings. Thus, in this case, between the factual findings of the trial court and the appellate court,
those of the trial court must prevail over that of the latter.29
Under this factual backdrop, we conclude that the CA committed grave abuse of discretion when it denied
the prayer for preliminary injunction without explanation and justification.
We ought to remember that the grant of preliminary injunction would have only been provisional and would
not be conclusively determinative of the principal action. The issuance of the writ would have served its
purpose, i.e., to preserve the status quo or to prevent future wrongs in order to preserve and protect the
interests of the petitioners during the pendency of the action. 30
WHEREFORE, in view of the foregoing, we GRANT the writ of certiorari and accordingly SET
ASIDE the resolutions of the Court of Appeals dated January 28, 2010 and July 16, 2010 for grave abuse of
discretion.
SO ORDERED.
 EN BANC
G.R. No. 205875, June 30, 2015
LIBERTY BROADCASTING NETWORK, INC., NOW KNOWN AS WI-TRIBE TELECOMS,
INC., Petitioner, v. ATLOCOM WIRELESS SYSTEM, INC., Respondent.
[G.R. No. 208916]
NATIONAL TELECOMMUNICATIONS COMMISSION, Petitioner, v. ATLOCOM WIRELESS
SYSTEM, INC., Respondent.
DECISION
VILLARAMA, JR., J.:
The consolidated petitions before us assail the Decision 1 dated June 29, 2012 and Resolution2 dated
February 18, 2013 of the Court of Appeals (CA) in CA-G.R. SP No. 119868. The CA reversed and set aside
the Orders3 dated December 9, 2010 and March 21, 2011 of the Regional Trial Court (RTC) of Quezon City,
Branch 95 denying the application for a writ of prohibitory or mandatory injunction in Civil Case No. Q-09-
65566.
Antecedent Facts
Atlocom Wireless System, Inc. (Atlocom) is a grantee of a legislative franchise under Republic Act (R.A.)
No. 8605.4 On October 8, 2003, the National Telecommunications Commission (NTC) issued an Order5 in
NTC Case No. 98-158 relative to the application of Atlocom for a Certificate of Public Convenience (CPC),
as follows:chanRoblesvirtualLawlibrary
WHEREFORE, it appearing that applicant is financially and technically capable of undertaking the
proposed project and that the operation thereof will promote the interest of the people in Metro Manila, in a
proper and suitable manner, the Commission hereby grants to herein applicant ATLOCOM WIRELESS
SYSTEM, INC. a Provisional Authority (PA) to install, operate and maintain a Multi-Point Multi-Channel
Distribution System [MMDS] in METRO MANILA, subject to the assignment of frequency by the
Frequency Management Division of this Commission and to the following -
CONDITIONS
x x x x6
As stated in the above order, the PA shall be valid for a period of eighteen (18) months, or until April 8,
2005. In a letter7 dated April 5, 2004, Atlocom thru its counsel requested for "an extension of time of the
allocation of the above-enumerated frequencies and for the period for the construction and installation of the
radio stations in the condition no. 2 of the Order." Earlier, Atlocom filed an Application for Permit to
Import8 the necessary equipment. Atlocom followed up its application for extension of PA through a
letter9 dated June 2, 2005 addressed to Deputy Commissioner Jorge V. Sarmiento. Subsequently, Atlocom
filed a Motion for Extension of Provisional Authority10 in NTC Case No. 98-158 on March 3, 2005.
On August 23, 2005, NTC issued Memorandum Circular No. (MC) 06-08-200511 re-allocating the following
bands for broadband wireless access for fixed, nomadic and mobile networks:
 450 - 470 Mhz
66
 1900-1910 MHz
 1980-1990 MHz
 2400-2483 MHz
 2500-2700 MHz
 3400-3600 MHz
 5150-5350 MHz
 5470-5850 MHz
 10150-10650 MHz
On December 23, 2008, NTC denied Atlocom's motion for extension of PA, citing the re-allocation of
MMDS frequencies for Broadband Wireless Access in accordance with MC 06-08-2005 and the
unavailability of other alternative frequencies.12chanrobleslaw
On September 8, 2009, Atlocom filed in the RTC a Petition 13 to enjoin the implementation of MC 06-08-
2005 and reinstate the frequencies of Atlocom. It was further prayed that after hearing the court render
judgment declaring the said issuance as null and void because NTC unlawfully deprived Atlocom of the
right to its assigned frequencies without notice and hearing. The case was docketed as Civil Case No. Q-09-
65566.
Liberty Broadcasting Network, Inc. (LBNI), also a grantee of a legislative franchise (R.A. No. 1553, as
amended by R.A. No. 4154) for radio and television broadcasting, as well as radio stations for international
and domestic communications of all types and services, and holder of a Certificate of Public Convenience
and Necessity (CPCN) to operate a radio communications network, was allowed to intervene in the case,
joining the defendant NTC in opposing Atlocom's claims. Pursuant to MC 06-08-2005, frequency bands
2535-2545 MHz and 2565-2595 MHz were re-allocated and assigned to LBNI, which covered the 2572-
2596 MHz being claimed by Atlocom as allegedly assigned to it.
Per Certification14 dated October 22, 2003 issued by Alvin N. Blanco, Chief, Broadcast Services Division of
NTC, the following frequencies were "identified" for Atlocom's MMDS (Metro Manila)
system:chanRoblesvirtualLawlibrary
C3 2572 - 2578 Mhz
D3 2578 - 2584 Mhz
C4 2584 - 2590 Mhz
D4 2590 - 2596 Mhz
On December 9, 2010, the RTC, after due hearing, issued an Order denying Atlocom's application for a writ
of preliminary prohibitory or mandatory injunction. Atlocom filed a motion for reconsideration but it was
likewise denied by the RTC under Order dated March 21, 2011.
In a petition for certiorari filed before the CA, Atlocom questioned the validity of the aforesaid orders of the
RTC.
In its Resolution15 dated August 12, 2011, the CA denied Atlocom's prayer for the issuance of a writ of
preliminary prohibitory injunction and its alternative prayer for a provisional mandatory injunction.
However, in its Decision dated June 29, 2012, the CA ruled in favor of Atlocom and reversed the RTC's
denial of application for preliminary injunction. The fallo of the decision reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the petition is GRANTED. The assailed Orders dated December 9,
2010 and March 21, 2011 of the Regional Trial Court (RTC) of Quezon City, Branch 95 are
hereby REVERSED and SET ASIDE. The plea for the issuance of a Preliminary Prohibitory Injunction
is GRANTED. Let therefore a writ of preliminary prohibitory injunction issue enjoining Respondent NTC
from implementing Memorandum Circular No. 06-08-2005, insofar as the frequencies ranging from 2572-
2596 Mhz are concerned and for its Co-Respondent LBNI from using the said frequencies during the
pendency of Civil Case No. Q-09-65566 pending before Branch 95 of the Regional Trial Court of Quezon
City upon the posting of a bond in the amount of Php 200,000.00 to answer for all damages which they may
sustain by reason of the injunction if the RTC should finally decide that petitioner is not entitled thereto. The
alternative plea for a writ of Preliminary Mandatory Injunction is DENIED.
SO ORDERED.16
LBNI filed a Motion for Reconsideration with Ad Cautelam Offer to File Counter-Bond and Addendum to
Motion for Reconsideration with Ad Cautelam Offer to File Counter-Bond. NTC also filed a Motion for
Reconsideration and Supplemental Motion for Reconsideration. The CA denied these motions.
LBNI filed its petition (G.R. No. 205875) in this Court on April 22, 2013. Acting on LBNI's motion for the
issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction, we issued a TRO
enjoining the implementation of the writ of preliminary injunction issued by the CA, conditioned upon
LBNI's posting of a cash bond in the sum of P300,000.00.
On April 18, 2013, NTC filed its separate petition (G.R. No. 208916) for review from the same CA Decision
and Resolution. We ordered the consolidation of the two cases as they arose from the same factual setting,
involve the same parties and raise identical issues.
Issues
The main issues to be resolved are: (1) whether Atlocom complied with the requisites for issuance of a writ
of preliminary injunction; and (2) whether LBNI's motion to file counter-bond was correctly denied by the
CA.
Specifically, LBNI asserts that the CA erred: (1) in finding that the NTC did not observe due process when
it issued MC 06-08-2005 and basing such conclusion on a mistaken notion that the grant of PA is
tantamount to a frequency assignment; (2) in failing to recognize that Atlocom has not sufficiently
established its claim that it had been assigned the 2572-2596 frequency bands by the NTC; (3) in granting
the provisional injunctive writ that in effect pre-judged the civil case pending in the RTC; and (4) in denying
LBNI's motion to file counter-bond on the basis of a technical conclusion it is not qualified to make in the
first place.
NTC faults the CA in finding that Atlocom's right to due process was violated because it was not notified of
the hearing prior to the issuance of MC 06-08-2005, and concluding that Atlocom has a clear and
unmistakable property right over the 2572-2596 frequency range.
Our Ruling
The petitions are meritorious.
A preliminary injunction is defined as "[a]n order granted at any stage of an action prior to the judgment or
final order, requiring a party or a court, agency or a person to refrain from a particular actor acts." 17 It may
be a prohibitory injunction, which requires a party to refrain from doing a particular act, or a mandatory
injunction, which commands a party to perform a positive act to correct a wrong in the past. 18 It is a
provisional remedy that a party may resort to in order to preserve and protect certain rights and interests
during the pendency of an action.19chanrobleslaw
67
Section 3, Rule 58 of the Rules of Court provides:chanRoblesvirtualLawlibrary
SEC. 3. Grounds for issuance of preliminary injunction. - A preliminary injunction may be granted when it
is established:ChanRoblesVirtualawlibrary
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in
restraining the commission or continuance of the act or acts complained of, or in requiring the performance
of an act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or nonperformance of the act or acts complained of during the
litigation would probably work injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or
suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to render the judgment
ineffectual.chanroblesvirtuallawlibrary
The following requisites must be proved before a writ of preliminary injunction will issue: (1) The applicant
must have a clear and unmistakable right to be protected, that is, a right in esse; (2) There is a material and
substantial invasion of such right; (3) There is an urgent need for the writ to prevent irreparable injury to the
applicant; and (4) No other ordinary, speedy, and adequate remedy exists to prevent the infliction of
irreparable injury.20chanrobleslaw
The grant or denial of a writ of preliminary injunction is discretionary upon the trial court because the
assessment and evaluation of evidence towards that end involve findings of fact left to the said court for its
conclusive determination. For this reason, the grant or denial of a writ of preliminary injunction shall not be
disturbed unless it was issued with grave abuse of discretion amounting to lack or in excess of
jurisdiction.21chanrobleslaw
In denying Atlocom's application for a writ of preliminary injunction, the RTC held that Atlocom failed to
demonstrate a clear and unmistakable legal right thereto, as evidence showed Atlocom has no more right to
be protected considering that its PA had already expired and its application for extension was subsequently
denied by the NTC. As to the claim of violation of right to due process, the RTC found that prior to the
issuance of MC 06-08-2005, NTC published a notice of public hearing in The Manila Times, a newspaper of
general circulation, and at the said hearing the participants were given opportunity to be heard through oral
arguments and submission of position papers. Atlocom's alternative plea for a writ of mandatory injunction
was likewise denied. According to the RTC, ordering the NTC to reinstate Atlocom's frequencies would
create an impression that the court had pre-judged the main case by nullifying MC 06-08-2005 as prayed for
by Atlocom in its petition.
However, the CA rendered a contrary ruling. The CA underscored the fact that NTC failed to act upon
Atlocom's motion for extension for more than three years, and concluded that because of NTC's inordinate
delay or refusal to renew the PA granted to Atlocom, the latter was deprived of its right to use the
frequencies "granted to it by" the PA. The CA thus held:chanRoblesvirtualLawlibrary
In deciding whether to grant an injunction, a court must consider established principles of equity and all the
circumstances of the test for issuing an injunction is whether the facts show a necessity for the intervention
of equity in order to protect rights cognizable in equity. Here, there are factual and legal justification for
issuance of the writ of injunction. To reiterate to the point of being pedantic, petitioner's right to its
frequencies is covered by a provisional authority. The provisional authority was withdrawn by MC No. 06-
08-2005 without the Respondent NTC acting on petitioner's plea for previous extensions. The propriety for
the issuance of MC No. 06-08-2005 is placed in issue on the ground of fairness. Petitioner as the rightful
grantee thereof has the right, in the meantime, to enjoin its implementation.
We are not unaware of Our Resolution promulgated on August 12, 2011 denying petitioner's plea for the
ancillary remedy of both prohibitory and/or mandatory injunction. Indeed, as of said date, the denial of
petitioner's prayer is appropriate. We have now the complete facts of the case and, as the legal consequence
of Our declaration that the RTC committed grave abuse of discretion in issuing the assailed orders, We
consider it proper to enjoin the Respondent NTC from implementing Memorandum Circular No. 06-08-
2005, but insofar as the frequencies ranging from 2572-2596 Mhz are involved and for its Co-Respondent
LBNI from using the aforestated frequencies. This is not to preempt the RTC of whatever judgment it may
thereafter issue with respect to the merits of the case before it but is issued in order to maintain the status
quo in view of petitioner's claim of a breach of due process and a continuing violation of its right over the
aforestated frequencies.22
The CA explained that since it is only through a frequency that Atlocom can provide adequate broadcast
service to the public, the withdrawal of frequency assignment without observance of due process defeats its
legislative grant and reduces Atlocom to a mere repository of transmitters and equipment devoid of any
purpose or value. It cited the following provisions of R.A. No. 8605:chanRoblesvirtualLawlibrary
SEC. 3. Prior Approval of the National Telecommunications Commission. - The grantee shall secure from
the National Telecommunications Commission, hereinafter referred to as the Commission, the appropriate
permits and licenses for the construction and operation of its stations, transmitters or facilities and shall not
use any frequency in the radio and television spectrum without having been authorized by the
Commission. The Commission, however, shall not unreasonably withhold or delay the grant of any such
authority.
xxxx
SEC. 6. Right of Government. x x x
The radio spectrum is a finite resource that is a part of the national patrimony and the use thereof is a
privilege conferred upon the grantee by the State and may be withdrawn anytime, after due process. (Italics
supplied)
On the withdrawal of the frequencies previously identified for Atlocom, the CA insisted that NTC did not
observe due process, viz.:chanRoblesvirtualLawlibrary
x x x While it is true that there was a publication of a Notice of Public Hearing on June 21, 2005 before the
issuance of Memorandum Circular No. 06-08-2005 on August 23, 2005, the fact is, the publication or notice
was a general one and was not meant to dispose of petitioner's previous requests for an extension of its
provisional authority and/or application for permit to purchase equipment. The order which dealt with these
requests was the Order dated December 23, 2008, which was issued almost four (4) years after the filing of
the first request on April 5, 2004 and almost three (3) years from the issuance of Memorandum Circular No.
06-08-2005. Withal and subject to whatever proof it may submit to the RTC regarding the delay, the
Respondent NTC should have first acted on petitioner's requests for extension before setting for public
hearing the re-allocation of the frequencies.23
We do not concur with the CA in holding that NTC's inaction or delay on Atlocom's application for
extension of PA had violated the latter's right to due process because it resulted in depriving Atlocom of the
use of frequencies which were re-allocated through the issuance of MC 06-08-2005. Such declaration rather
conveys an inaccurate picture of the regulatory process for public broadcasting and telecommunications
services.
Under existing laws and regulations, it is clear that a frequency assignment is not automatically included in
68
the PA granted by the NTC to an applicant for a CPC. Thus, the Order dated October 8, 2003 expressly
provided that the PA granted to Atlocom, valid for 18 months, is subject to several conditions, foremost of
which is the assignment of frequency by the Frequency Management Division (FMD).
While Atlocom presented a Certification24 dated October 22, 2003 issued by Alvin N. Blanco, Chief of
NTC's Broadcast Division, stating that certain frequencies were "identified" for Atlocom's MMDS (Metro
Manila) covering 2572-2596 frequency bands, there is no document evidencing that these frequencies were
actually assigned to Atlocom by the FMD. There is likewise nothing in the records to suggest that NTC
"unreasonably" withheld or delayed authority to use such frequencies identified for Atlocom.
Atlocom blamed NTC's three-year delay in resolving the motion for extension of PA for its inability to use
the frequencies identified for its MMDS, as these were eventually re-allocated in 2005 under MC 06-08-
2005. But as Atlocom was fully aware, Section 6 of R.A. No. 8605 provides that the Government may at
anytime withdraw the frequency after due process. Records showed that a notice was duly published and a
public hearing was actually conducted on July 12, 2005 by NTC on the proposed Memo Circular: Frequency
Band Allocations for Broadcast Wireless Access. Said event was attended by representatives of the different
broadcasting and telecommunication companies, including Atlocom. 25 The position papers and feedback
submitted by various companies in connection with the proposed memorandum circular on wireless
broadband access were all presented as evidence in the RTC. 26 We have held that the essence of due process
is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain
one's side.27 The requirements of due process were thus satisfied by the NTC in the re-allocation of
frequency.
Contrary to the CA's pronouncement, the re-allocation of frequency cannot be conditioned on resolution of
any pending request for extension of PA previously granted. Even entities with unexpired PA cannot claim a
vested right on a specific frequency assignment. This proceeds from the nature of its franchise which is not
solely for commercial purposes but one imbued with public interest. As earlier quoted, Atlocom's franchise
(R.A. No. 8605) declared the use of radio spectrum as a mere privilege conferred upon the grantee by the
State that may be withdrawn anytime provided that due process is observed. It further emphasized that the
radio spectrum is a finite resource and its use and distribution should be aligned with existing laws and
policies.
R.A. No. 7925 likewise recognizes the vital role of telecommunications to national development and
security and provides that the radio frequency shall be managed and directed to serve the public interest.
Being a limited resource, the law mandates a periodic review of frequency allocation.
SEC. 4. Declaration of National Policy. - Telecommunications is essential to the economic development,
integrity and security of the Philippines, and as such shall be developed and administered as to safeguard,
enrich and strengthen the economic, cultural, social and political fabric of the Philippines. The growth and
development of telecommunications services shall be pursued in accordance with the following
policies:ChanRoblesVirtualawlibrary
xxxx
c) The radio frequency spectrum is a scarce public resource that shall be administered in the public interest
and in accordance with international agreements and conventions to which the Philippines is a party and
granted to the best qualified. The government shall allocate the spectrum to service providers who will use it
efficiently and effectively to meet public demand for telecommunications service and may avail of new and
cost effective technologies in the use of methods for its utilization;
xxxx
SEC. 15. Radio Frequency Spectrum. - The radio frequency spectrum allocation and assignment shall be
subject to periodic review. The use thereof shall be subject to reasonable spectrum user fees. Where demand
for specific frequencies exceed availability, the Commission shall hold open tenders for the same and ensure
wider access to this limited resource.chanroblesvirtuallawlibrary
As a grantee of PA, Atlocom can only invoke the condition in MC 06-08-2005 that "[t]he transfer of
previously authorized persons or entities operating radio stations within the above listed radio frequency
bands shall be governed by Rule 603 of MC 3-3-96."28 Said rule states:chanRoblesvirtualLawlibrary
603. TRANSFER OF AFFECTED AUTHORIZED RADIO FREQUENCY USER
a. The commission shall allocate available radio frequencies for assignment to those affected by the
reallocation as a result of the review of the radio spectrum pursuant to Rule 601.
b. The cost of the transfer to new radio frequencies of affected authorized users shall be borne by the new
assignees to the radio frequency channel/band where the radio frequencies of the previously authorized users
fall within.
c. When the transfer to a new set of radio frequencies would require additional radio links, the cost of these
links shall also be taken into consideration.
d. The manner and the cost of the transfer shall be negotiated in good faith between the affected authorized
users and the assignees within 90 days from receipt of notice of relocation.
e. The Commission shall extend all the necessary assistance to all affected authorized users and shall
mandate settlement if the parties fail to come to an agreement within 90 days from receipt of notice of
relocation or when warranted under the circumstances.
f. Other means/mode of transmission comparable in quality to the existing facility shall be taken into
consideration in the negotiation for the transfer.
g. Transfer of radio frequency assignment shall only take effect upon activation of service by relocated party
using its newly assigned or relocated frequency as agreed or mandated.chanroblesvirtuallawlibrary
Considering that Atlocom has not even launched its MMDS network nor constructed radio stations, it is
doubtful whether Atlocom can exercise the foregoing rights of an affected frequency user. Neither can
Atlocom attribute its non-operational state to the delayed action on its motion for extension of PA. Among
the conditions of its PA is the commencement of the construction and installation of its station within six
months from issuance of the order granting it the provisional authority and its complete three months
thereafter. Perusal of the motion for extension reveals that Atlocom at the time was still in the process of
identifying and finalizing arrangements with its potential investors for the establishment of a nationwide
MMDS network coverage.
Based on its evaluation, the NTC found that: (1) Atlocom filed an application for Permit to Purchase MMDS
transmitter on February 9, 2005, but no permit of any kind was issued to it; (2) In the clarificatory hearing
held on September 4, 2006, concerns were raised regarding reports of foreign equity on Atlocom's capital
structure and status of band allocated for MMDS within the 2.5-2.7 Ghz band; and (3) On June 21, 2008,
Atlocom is requesting for an allocation of a Digital Terrestrial TV frequency (Ch 14-20 & Ch 21-51) in
replacement for their MMDS frequency, but the NTC thru FMD denied such request because the proposed
frequency band for DTT service is not yet approved/allocated. With the re-allocation of MMDS frequency
69
bands for the Broadband Wireless Access under MC 06-8-2005, and the aforesaid findings, the NTC en
banc decided not to grant the extension sought by Atlocom.
A right to be protected by injunction, means a right clearly founded on or granted by law or is enforceable as
a matter of law.29 An injunction is not a remedy to protect or enforce contingent, abstract, or future rights; it
will not issue to protect a right not in esse, and which may never arise, or to restrain an act which does not
give rise to a cause of action.30chanrobleslaw
From the evidence on record, no clear, actual and existing right to the subject frequencies or to the extension
of PA had been shown by Atlocom. Accordingly, no grave abuse of discretion was committed by the RTC
in denying Atlocom's application for a writ of preliminary injunction to restrain the implementation of MC
06-08-2005 insofar as the use of the reallocated frequencies claimed by Atlocom. The CA thus seriously
erred in reversing the RTC and holding that Atlocom was entitled to injunctive relief due to alleged violation
of its right by the NTC.
A writ of preliminary injunction being an extraordinary event, one deemed as a strong arm of equity or a
transcendent remedy, it must be granted only in the face of actual and existing substantial rights. In the
absence of the same, and where facts are shown to be wanting in bringing the matter within the conditions
for its issuance, the ancillary writ must be struck down for having been rendered in grave abuse of
discretion.31chanrobleslaw
Pursuant to Section 6,32 Rule 58 of the 1997 Rules of Civil Procedure, a preliminary injunction may be
dissolved if it appears after hearing that although the applicant is entitled to the injunction or restraining
order, the issuance or continuance thereof, as the case may be, would cause irreparable damage to the party
or person enjoined while the applicant can be fully compensated for such damages as he may suffer, and the
former files a bond in an amount fixed by the court on condition that he will pay all damages which the
applicant may suffer by the denial or the dissolution of the injunction or restraining order. Two conditions
must concur: first, the court, in the exercise of its discretion, finds that the continuance of the injunction
would cause great damage to the defendant, while the plaintiff can be fully compensated for such damages
as he may suffer; second, the defendant files a counterbond. 33chanrobleslaw
In denying LBNI's offer to file counterbond, the CA relied on the Affidavit 34 executed by Rene Rosales,
Atlocom's technical consultant, to refute the earlier Affidavit35 submitted by LBNI, which was executed by
its Director for Network Engineering, Edwin C. Mabitazan. Mabitazan stated that the injunction issued by
the CA will result in reducing LBNI's usable bandwidth from 40 Mhz to only 15 Mhz, which is inadequate
to serve LBNI's thousands of subscribers. Mabitazan's opinion should have been given more weight in view
of his intimate knowledge of LBNI's operations and technical requirements. Moreover, it should be stressed
that LBNI's business projections were based on its existing technical capability which stands to be greatly
diminished once the frequency bands re-assigned to it will be reduced as a result of the CA's injunction
order. The possibility of irreparable damage is indeed present, not only in terms of financial losses -the total
investment by LBNI has already reached billions of pesos - but on the reputation of LBNI as a new player in
the telecommunications industry for reliability and dependability of its services. In contrast, whatever
damage Atlocom stands to suffer should the injunction be dissolved, can be fully compensated considering
that it has not constructed stations nor launched any network service. No single document was submitted by
Atlocom to show it had actually complied with the conditions of its PA and invested in the establishment of
MMDS network, which never materialized.
In gross abuse of discretion, the CA brushed aside evidence presented by LBNI in support of its offer to file
counter-bond, stating that these were submitted only after the appellate court had rendered its decision
granting Atlocom's prayer for preliminary injunction. The CA failed to consider the fact that it was Atlocom
which misled the courts and the NTC in claiming that the subject frequencies had been assigned to it. The
matter was raised by NTC and LBNI only in their motions for reconsideration because it was only at that
time when their inquiry from FMD disclosed that said office had not actually granted a frequency
assignment to Atlocom. Thus, NTC in its Supplemental Motion for Reconsideration, submitted a
Certification36 dated August 2, 2012 issued by the FMD Chief, Pricilla F. Demition, together with attached
documents, setting forth the same facts relative to Atlocom's non-operational state. Atlocom countered that
said evidence was just an afterthought because the absence of frequency assignment was not mentioned by
Engr. Demition when she testified before the RTC on January 14, 2009 during the hearing on the application
for writ of preliminary injunction. Atlocom, however, never disputed the findings of the FMD.
The pertinent portions of the FMD Certification are herein reproduced:chanRoblesvirtualLawlibrary
2. In a memo addressed to the Chief, Broadcast Services Division dated January 10, 2006 (copy
attached as Annex "B"); signed by then Deputy Commissioner Jorge V. Sarmiento, an inquiry was
made to the Broadcast Services Division (BSD) regarding the status of usage of the frequency
assignments granted to broadcast companies for MMDS use and to provide information thru the
FMD of the latest related information to include among others permits/licenses issued to their
favor; such information was needed in view of the re-allocation of the band in use for BWA (MC
No. 06-08-2005);
3. In a memo dated January 12, 2006 (copy attached as Annex "C") in compliance to the January 10,
2006 Memo, BSD's report shows under the column Latest Permits/License issued, that the latest
permit or license issued for ATLOCOM was only its PA dated 10.08.03;
4. In a memo addressed to the Records Verification Committee dated 06 September 2006 (copy
attached as Annex "D") signed by then Commissioner Ronald Olivar Solis, citing a memo dated 21
September 2005 from then DOTC Secretary Leonardo R. Mendoza and Office Order No. 71-08-
2006, the Records Verification Committee was directed to verify the status of several radio
frequency bands therein listed, and to submit its report to include, among others, SUF payments,
latest permits, and licenses issued and photocopies of the same;
5. The Records Verification Committee reported in a memo dated 08 September 2006 (copy attached
as Annex "E"), that with respect to Atlocom Wireless System, Inc., no record on file was found
as to station location, frequency, license/permit no., radio station license or permit to
purchase and possess;
6. In a memo addressed to the Acting Chief BSD dated 07 January 2008 by then FMD Acting Chief
Engr. Joselito C. Leynes (copy attached as Annex "F") [w]ith reference to the 03 January 2008
indorsement letter from BSD (copy attached as Annex "G) regarding the request of Atlocom
Wireless System, Inc. for an allocation of a Digital Television (DTT) frequency (copy attached as
Annex "H"), the BSD was informed of the following for guidance:chanRoblesvirtualLawlibrary
"that the proposed frequency band from Channel 14-20 and Channel 21-51 is not yet been finally
allocated/approved for the purpose of DTT operation. Further, in the event that said frequency
band re-allocation is approved, only broadcasting company with existing TV station/s and/or
authority to operate is entitled for application/issuance of a DTT frequency channel."
7. A Memo addressed to the Chief, Frequency Management Division dated 27 July 2012 (copy
attached as Annex "I") Chief, BSD in connection with the "certification" issued to Atlocom
Wireless System, Inc. clarifies the following:chanRoblesvirtualLawlibrary
70
"that the frequencies stated in the subject certification were simply identified as candidate
frequencies for the MMDS service under NTC Case No. 98-158, subject to final frequency
assignment by the Frequency Management Division (FMD) of this Commission." and
"Furthermore inasmuch as frequency assignments covering the band 2500-2700 Mhz are issued by
the Frequency Management Division (FMD), the undersigned is of the view that the determination
of the assignment of the subject frequencies to Atlocom Wireless, or to any other entity, can best
be certified by the Frequency Management Division (FMD)"
8. As per NTC Office Order No. 59-07-2003 dated July 30, 2003 (copy attached as Annex "J), all
requests, applications requiring clearance and/or new radio frequency assignments, except for
frequencies that have been pre-allocated and/or decentralized, shall be cleared with the Office of
the Commissioner thru the Frequency Management Division:chanRoblesvirtualLawlibrary
"Henceforth, except for frequencies that have been pre-allocated and/or decentralized, all requests
applications requiring clearance and/or new radio frequency assignment shall be cleared with the
Office of the Commissioner thru the Frequency Management Division."
9. No records/documents were however found at the Frequency Management Division showing
frequency assignment clearance for the use of ATLOCOM's MMDS system. (Emphasis
supplied)
In light of all the foregoing established facts, we hold that the CA gravely abused its discretion when it
issued a writ of preliminary injunction against the implementation of MC 06-08-2005 in the absence of a
clear legal right on the part of Atlocom, and subsequently denying LBNFs offer to file counter-bond despite
compliance with the requisites provided in Section 6 of Rule 58. However, with our ruling that the writ of
preliminary injunction was improperly issued, hence, null and void, the matter of allowing LBNI to post a
counter-bond has been rendered moot.
A final note. In its Memorandum,37 Atlocom argues that LBNI is part of mass media and its franchise
violates Article XVI, Section 11 (1) of the Constitution 38 because it is not wholly-owned by Filipino
citizens.39chanrobleslaw
Unless properly raised and the very lis mota of the case, we do not pass upon constitutional issues. The
resolution of the constitutional issues must be absolutely necessary for the determination of the case. 40In the
spirit of deference to the acts of other constitutional departments and organs, issues before this Court should
address only the narrowest issues necessary to determine whether the reliefs prayed for can be granted. As in
this case, reliefs can be determined on procedural issues.
The main issue presented in this case is the validity of Atlocom's application for a writ of preliminary
injunction against the NTC. This issue can be resolved without passing upon the constitutionality of LBNI's
franchise. The resolution of the issue on LBNI's eligibility thus has no bearing on whether Atlocom has the
right to be granted a frequency allocation for Broadband Wireless Access by the NTC. The constitutional
issue raised by the respondent may be raised and resolved in proper cases when necessary in the future.
WHEREFORE, the petitions are GRANTED. The Decision dated June 29, 2012 and Resolution dated
February 18, 2013 of the Court of Appeals in CA-G.R. SP No. 119868 are REVERSED and SET ASIDE.
Consequently, the writ of preliminary injunction issued in said case, if any, is hereby
declared NULL and VOID.

The Orders dated December 9, 2010 and March 21, 2011 of the Regional Trial Court of Quezon City,
Branch 95 in Q-09-65566 are hereby REINSTATED and UPHELD.

The Temporary Restraining Order issued by this Court on April 30, 2013 is hereby made PERMANENT.

No pronouncement as to costs.

SO ORDERED.cralawlawlibrary

71
SECOND DIVISION
September 7, 2015
GR. No. 197472
REPUBLIC OF THE PHILIPPINES, represented by Commander Raymond Alpuerto of the Naval
Base Camillo Osias, Port San Vicente, Sta. Ana, Cagayan, Petitioner,
vs.
REV. CLAUDIO R. CORTEZ, SR., Respondent.
DECISION
DEL CASTILLO, J.:
An inalienable public land cannot be appropriated and thus may not be the proper object of possession.
Hence, injunction cannot be issued in order to protect ones alleged right of possession over the same.
This Petition for Review on Certiorari1 assails the June 29, 2011 Decision2 of the Court of Appeals (CA) in
CA-GR. CV No. 89968, which dismissed the appeal therewith and affirmed the July 3, 2007 Decision 3 of
the Regional Trial Court (RTC) of Aparri, Cagayan, Branch 8 in Spl. Civil Action Case No. II-2403.
Factual Antecedents
Respondent Rev. Claudio R. Cortez, Sr. (Rev. Cortez), a missionary by vocation engaged in humanitarian
and charitable activities, established an orphanage and school in Punta Verde, Palaui Island, San Vicente,
Sta. Ana, Cagayan. He claimed that since 1962, he has been in peaceful possession of about 50 hectares of
land located in the western portion of Palaui Island in Sitio Siwangag, Sta. Ana, Cagayan which he, with the
help of Aetas and other people under his care, cleared and developed for agricultural purposes in order to
support his charitable, humanitarian and missionary works.4
On May 22, 1967, President Ferdinand E. Marcos issued Proclamation No. 201 reserving for military
purposes a parcel of the public domain situated in Palaui Island. Pursuant thereto, 2,000 hectares of the
southern half portion of the Palaui Island were withdrawn from sale or settlement and reserved for the use of
the Philippine Navy, subject, however, to private rights if there be any.
More than two decades later or on August 16, 1994, President Fidel V. Ramos issued Proclamation No. 447
declaring Palaui Island and the surrounding waters situated in the Municipality of Sta. Ana, Cagayan as
marine reserve. Again subject to any private rights, the entire Palaui Island consisting of an aggregate area
of 7,415.48 hectares was accordingly reserved as a marine protected area.
On June 13, 2000, Rev. Cortez filed a Petition for Injunction with Prayer for the Issuance of a Writ of
Preliminary Mandatory Injunction5 against Rogelio C. Biñas (Biñas) in his capacity as Commanding Officer
of the Philippine Naval Command in Port San Vicente, Sta. Ana, Cagayan.1âwphi1 According to him, some
members of the Philippine Navy, upon orders of Biñas, disturbed his peaceful and lawful possession of the
said 50-hectare portion of Palaui Island when on March 15, 2000, they commanded him and his men,
through the use of force and intimidation, to vacate the area. When he sought assistance from the Office of
the Philippine Naval Command, he was met with sarcastic remarks and threatened with drastic military
action if they do not vacate. Thus, Rev. Cortez and his men were constrained to leave the area. In view of
these, Rev. Cortez filed the said Petition with the RTC seeking preliminary mandatory injunction ordering
Biñas to restore to him possession and to not disturb the same, and further, for the said preliminary writ, if
issued, to be made permanent.
Proceedings before the Regional Trial Court
After the conduct of hearing on the application for preliminary mandatory injunction 6 and the parties’
submission of their respective memoranda,7 the RTC issued an Order8 dated February 21, 2002 granting the
application for a writ of preliminary mandatory injunction. However, the same pertained to five hectares
(subject area) only, not to the whole 50 hectares claimed to have been occupied by Rev. Cortez, viz.:
It should be noted that the claim of [Rev. Cortez] covers an area of 50 hectares more or less located at the
western portion of Palaui Island which is within the Naval reservation. [Rev. Cortez] presented what he
called as a survey map (Exh. "H") indicating the location of the area claimed by the Church of the Living
God and/or Rev. Claudio Cortez with an approximate area of 50 hectares identified as Exh. "H-4". However,
72
the Survey Map allegedly prepared by [a] DENR personnel is only a sketch map[,] not a survey map as
claimed by [Rev. Cortez]. Likewise, the exact boundaries of the area [are] not specifically indicated. The
sketch only shows some lines without indicating the exact boundaries of the 50 hectares claimed by [Rev.
Cortez]. As such, the identification of the area and its exact boundaries have not been clearly defined and
delineated in the sketch map. Therefore, the area of 50 hectares that [Rev. Cortez] claimed to have
peacefully and lawfully possessed for the last 38 years cannot reasonably be determined or accurately
identified.
For this reason, there is merit to the contention of [Biñas] that [Rev. Cortez]’ claim to the 50 hectares of land
identified as Exh. ["]H-4" is unclear and ambiguous. It is a settled jurisprudence that mandatory injunction is
the strong arm of equity that never ought to be extended unless to cases of great injury, where courts of law
cannot afford an adequate and commensurate remedy in damages. The right must be clear, the injury
impending or threatened, so as to be averted only by the protecting preventive process of injunction. The
reason for this doctrine is that before the issue of ownership is determined in the light of the evidence
presented, justice and equity demand that the [status quo be maintained] so that no advantage may be given
to one to the prejudice of the other. And so it was ruled that unless there is a clear pronouncement regarding
ownership and possession of the land, or unless the land is covered by the torrens title pointing to one of the
parties as the undisputed owner, a writ of preliminary injunction should not issue to take the property out of
possession of one party to place it in the hands of another x x x.
Admittedly, the documentary exhibits of [Rev. Cortez] tended only to show that [he] has a pending
application of patent with the DENR. Even so, [Rev. Cortez] failed to present in evidence the application for
patent allegedly filed by [him] showing that he applied for patent on the entire 50 hectares of land which he
possessed or occupied for a long period of time. Under the circumstances, therefore, the title of petitioner to
the 50 hectares of land in Palaui Island remains unclear and doubtful, and [is] seriously disputed by the
government.
More significantly, at the time that Proc. No. 201 was issued on May 22, 1967, [Rev. Cortez] has not
perfected his right over the 50 hectares of land nor acquired any vested right thereto considering that he only
occupied the land as alleged by him in 1962 or barely five (5) years before the issuance of the Presidential
Proclamation. Proclamation No. 201 had the effect of removing Palaui Island from the alienable or
disposable portion of the public domain and therefore the island, as of the date of [the] issuance [of the
proclamation], has ceased to be disposable public land.
However, the court is not unmindful that [Rev. Cortez] has lawfully possessed and occupied at least five (5)
hectares of land situated at the western portion of the Palaui Island identified as Exh "H-4". During the
hearing, Cmdr.
Rogelio Biñas admitted that when he was assigned as Commanding Officer in December 1999, he went to
Palaui Island and [saw only] two (2) baluga families tilling the land consisting of five (5) hectares.
Therefore, it cannot be seriously disputed that [Rev. Cortez] and his baluga tribesmen cleared five (5)
hectares of land for planting and cultivation since 1962 on the western portion identified as Exhibit "H-4".
The Philippine Navy also admitted that they have no objection to settlers of the land prior to the Presidential
Proclamation and [Rev. Cortez] had been identified as one of the early settlers of the area before the
Presidential Proclamation. The DENR also acknowledged that [Rev. Cortez] has filed an application for
patent on the western area and that he must be allowed to pursue his claim.
Although the court is not persuaded by the argument of [Rev. Cortez] that he has already acquired vested
rights over the area claimed by him, the court must recognize that [Rev. Cortez] may have acquired some
propriety rights over the area considering the directive of the DENR to allow [Rev. Cortez] to pursue his
application for patent. However, the court wants to make clear that the application for patent by [Rev.
Cortez] should be limited to an area not to exceed five (5) hectares situated at the western portion of x x x
Palaui Island identified in the sketch map as Exh. "H-4." This area appears to be the portion where [Rev.
Cortez] has clearly established his right or title by reason of his long possession and occupation of the land.9
In his Answer,10 Biñas countered that: (1) Rev. Cortez has not proven that he has been in exclusive, open,
continuous and adverse possession of the disputed land in the concept of an owner; (2) Rev. Cortez has not
shown the exact boundaries and identification of the entire lot claimed by him; (3) Rev. Cortez has not
substantiated his claim of exemption from Proclamation No. 201; (4) under Proclamation No. 447, the entire
Palaui Island, which includes the land allegedly possessed and occupied by Rev. Cortez, was reserved as a
marine protected area; and, (4) injunction is not a mode to wrest possession of a property from one person
by another.
Pre-trial and trial thereafter ensued.
On July 3, 2007, the RTC rendered its Decision11 making the injunction final and permanent. In so ruling,
the said court made reference to the Indigenous Peoples’ [Right] Act (IPRA) as follows:
The Indigenous [Peoples’ Right] Act should be given effect in this case. The affected community belongs to
the group of indigenous people which are protected by the State of their rights to continue in their
possession of the lands they have been tilling since time immemorial. No subsequent passage of law or
presidential decrees can alienate them from the land they are tilling. 12
Ultimately, the RTC held, thus:
WHEREFORE, finding the petition to be meritorious, the same is hereby GRANTED.
xxxx
SO DECIDED.13
Representing Biñas, the Office of the Solicitor General (OSG) filed a Notice of Appeal 14 which was given
due course by the RTC in an Order15 dated August 6, 2007.
Ruling of the Court of Appeals
In its brief,16 the OSG pointed out that Rev. Cortez admitted during trial that he filed the Petition for
injunction on behalf of the indigenous cultural communities in Palaui Island and not in his capacity as pastor
or missionary of the Church of the Living God. He also claimed that he has no interest over the land. Based
on these admissions, the OSG argued that the Petition should have been dismissed outright on the grounds
that it did not include the name of the indigenous cultural communities that Rev. Cortez is supposedly
representing and that the latter is not the real party-in-interest. In any case, the OSG averred that Rev. Cortez
failed to show that he is entitled to the issuance of the writ of injunction. Moreover, the OSG questioned the
RTC’s reference to the IPRA and argued that it is not applicable to the present case since Rev. Cortez
neither alleged in his Petition that he is claiming rights under the said act nor was there any showing that he
is a member of the Indigenous Cultural Communities and/or the Indigenous Peoples as defined under the
IPRA.
In its Decision17 dated June 29, 2011, the CA upheld the RTC’s issuance of a final injunction based on the
following ratiocination:
The requisites necesary for the issuance of a writ of preliminary injunction are: (1) the existence of a clear
and unmistakable right that must be protected; and (2) an urgent and paramount necessity for the writ to
prevent serious damage. Here, [Rev. Cortez] has shown the existence of a clear and unmistakable right that
must be protected and an urgent and paramount necessity for the writ to prevent serious damage. Records
reveal that [Rev. Cortez] has been in peaceful possession and occupation of the western portion of Palaui
Island, Sitio Siwangag, San Vicente, Sta. Ana[,] Cagayan since 1962 or prior to the issuance of
Proclamation Nos. 201 and 447 in 1967 and 1994, respectively. There he built an orphanage and a school for
the benefit of the members of the Dumagat Tribe, in furtherance of his missionary and charitable works.
There exists a clear and unmistakable right in favor [of Rev. Cortez] since he has been in open, continuous
and notorious possession of a portion of Palaui island. To deny the issuance of a writ of injunction would
cause grave and irreparable injury to [Rev. Cortez] since he will be displaced from the said area which he
has occupied since 1962. It must be emphasized that Proclamation Nos. 201 and 447 stated that the same are
subject to private rights, if there be [any]. Though Palaui Island has been declared to be part of the naval
reservation and the whole [i]sland as a marine protected area, both recognized the existence of private rights
prior to the issuance of the same.
73
From the foregoing, we rule that the trial court did not err when it made permanent the writ of preliminary
mandatory injunction. Section 9, Rule 58 of the Rules of Court provides that if after the trial of the action it
appears that the applicant is entitled to have the act or acts complained of permanently enjoined, the court
shall grant a final injunction perpetually restraining the party or person enjoined from the commission or
continuance of the act or acts or confirming the preliminary mandatory injunction.18
Anent the issue of Rev. Cortez not being a real party-in-interest, the CA noted that this was not raised before
the RTC and therefore cannot be considered by it. Finally, with respect to the RTC’s mention of the IPRA,
the CA found the same to be a mere obiter dictum.
The dispositive portion of the CA Decision reads:
WHEREFORE, premise[s] considered, the instant Appeal is hereby DENIED. The assailed 3 July 2007
Decision of the Regional Trial Court of Aparri, Cagayan, Branch 8 in Civil Case No. II-2403 is
AFFIRMED.
SO ORDERED.19
Hence, this Petition brought by the OSG on behalf of the Republic of the Philippines (the Republic).
The Issue
The ultimate issue to be resolved in this case is whether Rev. Cortez is entitled to a final writ of mandatory
injunction.
The Parties’ Arguments
The bone of contention as the OSG sees it is the injunctive writ since Rev. Cortez failed to prove his clear
and positive right over the 5-hectare portion of Palaui Island covered by the same. This is considering that
by his own admission, Rev. Cortez started to occupy the said area only in 1962. Hence, when the property
was declared as a military reserve in 1967, he had been in possession of the 5-hectare area only for five
years or short of the 30-year possession requirement for a bona fide claim of ownership under the law. The
OSG thus argues that the phrase "subject to private rights" as contained in Proclamation No. 201 and
Proclamation No. 447 cannot apply to him since it only pertains to those who have already complied with
the requirements for perfection of title over the land prior to the issuance of the said proclamations.
Rev. Cortez, for his part, asserts that the arguments of the OSG pertaining to ownership are all immaterial as
his Petition for injunction does not involve the right to possess based on ownership but on the
right of possession which is a right independent from ownership. Rev. Cortez avers that since he has been in
peaceful and continuous possession of the subject portion of Palaui Island, he has the right of possession
over the same which is protected by law. He asserts that based on this right, the writ of injunction was
correctly issued by the RTC in his favor and aptly affirmed by the CA. On the technical side, Rev. Cortez
avers that the Republic has no legal personality to assail the CA Decision through the present Petition since
it was not a party in the appeal before the CA.
The Court’s Ruling
We grant the Petition.
For starters, the Court shall distinguish a preliminary injunction from a final injunction.
"Injunction is a judicial writ, process or proceeding whereby a party is directed either to do a particular act,
in which case it is called a mandatory injunction, [as in this case,] or to refrain from doing a particular act, in
which case it is called a prohibitory injunction."20 "It may be the main action or merely a provisional remedy
for and as an incident in the main action."21
"The main action for injunction is distinct from the provisional or ancillary remedy of preliminary
injunction."22 A preliminary injunction does not determine the merits of a case or decide controverted
facts.23 Since it is a mere preventive remedy, it only seeks to prevent threatened wrong, further injury and
irreparable harm or injustice until the rights of the parties are settled. 24 "It is usually granted when it is made
to appear that there is a substantial controversy between the parties and one of them is committing an act or
threatening the immediate commission of an act that will cause irreparable injury or destroy the status
quo of the controversy before a full hearing can be had on the merits of the case."25 A preliminary injunction
is granted at any stage of an action or proceeding prior to judgment or final order. 26 For its issuance, the
applicant is required to show, at least tentatively, that he has a right which is not vitiated by any substantial
challenge or contradiction.27 Simply stated, the applicant needs only to show that he has the ostensible right
to the final relief prayed for in his complaint.28 On the other hand, the main action for injunction seeks a
judgment that embodies a final injunction.29 A final injunction is one which perpetually restrains the party or
person enjoined from the commission or continuance of an act, or in case of mandatory injunctive writ, one
which confirms the preliminary mandatory injuction.30 It is issued when the court, after trial on the merits, is
convinced that the applicant is entitled to have the act or acts complained of permanently
enjoined.31 Otherwise stated, it is only after the court has come up with a definite pronouncement respecting
an applicant’s right and of the act violative of such right, based on its appreciation of the evidence presented,
that a final injunction is issued. To be a basis for a final and permanant injunction, the right and the act
violative thereof must be established by the applicant with absolute certainty. 32
What was before the trial court at the time of the issuance of its July 3, 2007 Decision is whether a final
injunction should issue. While the RTC seemed to realize this as it in fact made the injunction permanent,
the Court, however, finds the same to be wanting in basis.
Indeed, the RTC endeavored to provide a narrow distinction between a preliminary injunction and a final
injunction. Despite this, the RTC apparently confused itself. For one, what it cited in its Decision were
jurisprudence relating to preliminary injunction and/or mandatory injunction as an ancillary writ and not as a
final injunction. At that point, the duty of the RTC was to determine, based on the evidence presented during
trial, if Rev. Cortez has conclusively established his claimed right (as opposed to preliminary injunction
where an applicant only needs to at least tentatively show that he has a right) over the subject area. This is
considering that the existence of such right plays an important part in determining whether the preliminary
writ of mandatory injunction should be confirmed.
Surprisingly, however, the said Decision is bereft of the trial court’s factual findings on the matter as well as
of its analysis of the same vis-a-vis applicable jurisprudence. As it is, the said Decision merely contains a
restatement of the parties’ respective allegations in the Complaint and the Answer, followed by a narration
of the ensuing proceedings, an enumeration of the evidence submitted by Rev. Cortez, a recitation of
jurisprudence relating to preliminary injunction and/or specifically, to mandatory injunction as an ancillary
writ, a short reference to the IPRA which the Court finds to be irrelevant and finally, a conclusion that a
final and permanent injunction should issue. No discussion whatsoever was made with respect to whether
Rev. Cortez was able to establish with absolute certainty hisclaimed right over the subject area.
Section 14, Article VIII of the Constitution, as well as Section 1 of Rule 36 and Section 1, Rule 120 of the
Rules on Civil Procedure, similarly state that a decision, judgment or final order determining the merits of
the case shall state, clearly and distinctly, the facts and the law on which it is based. Pertinently, the Court
issued on January 28, 1988 Administrative Circular No. 1, which requires judges to make complete findings
of facts in their decision, and scrutinize closely the legal aspects of the case in the light of the evidence
presented, and avoid the tendency to generalize and to form conclusion without detailing the facts from
which such conclusions are deduced.33
Clearly, the Decision of the RTC in this case failed to comply with the aforestated guidelines.
In cases such as this, the Court would normally remand the case to the court a quo for compliance with the
form and substance of a Decision as required by the Constitution. In order, however, to avoid further delay,
the Court deems it proper to resolve the case based on the merits. 34
"Two requisites must concur for injunction to issue: (1) there must be a right to be protected and (2) the acts
against which the injunction is to be directed are violative of said right." 35 Thus, it is necessary that the
Court initially determine whether the right asserted by Rev. Cortez indeed exists. As earlier stressed, it is
necessary that such right must have been established by him with absolute certainty.
Rev. Cortez argues that he is entitled to the injunctive writ based on the right of possession (jus possesionis)
by reason of his peaceful and continuous possession of the subject area since 1962. He avers that as this
right is protected by law, he cannot be peremptorily dispossessed therefrom, or if already dispossessed, is
entitled to be restored in possession. Hence, the mandatory injunctive writ was correctly issued in his favor.
74
Jus possessionis or possession in the concept of an owner36 is one of the two concepts of possession
provided under Article 52537 of the Civil Code. Also referred to as adverse possession,38 this kind of
possesion is one which can ripen into ownership by prescription. 39 As correctly asserted by Rev. Cortez, a
possessor in the concept of an owner has in his favor the legal presumption that he possesses with a just title
and he cannot be obliged to show or prove it.40 In the same manner, the law endows every possessor with the
right to be respected in his possession.41
It must be emphasized, however, that only things and rights which are susceptible of being appropriated may
be the object of possession.42 The following cannot be appropriated and hence, cannot be
possessed: property of the public dominion, common things (res communes) such as sunlight and air, and
things specifically prohibited by law.43
Here, the Court notes that while Rev. Cortez relies heavily on his asserted right of possession, he,
nevertheless, failed to show that the subject area over which he has a claim is not part of the public domain
and therefore can be the proper object of possession.
Pursuant to the Regalian Doctrine, all lands of the public domain belong to the State. 44 Hence, "[a]ll lands
not appearing to be clearly under private ownership are presumed to belong to the State. Also, public lands
remain part of the inalienable land of the public domain unless the State is shown to have reclassified or
alienated them to private persons."45 To prove that a land is alienable, the existence of a positive act of the
government, such as presidential proclamation or an executive order; an administrative action; investigation
reports of Bureau of Lands investigators; and a legislative act or a statute declaring the land as alienable and
disposable must be established.46
In this case, there is no such proof showing that the subject portion of Palaui Island has been declared
alienable and disposable when Rev. Cortez started to occupy the same. Hence, it must be considered as still
inalienable public domain. Being such, it cannot be appropriated and therefore not a proper subject of
possession under Article 530 of the Civil Code. Viewed in this light, Rev. Cortez’ claimed right of
possession has no leg to stand on. His possession of the subject area, even if the same be in the concept of an
owner or no matter how long, cannot produce any legal effect in his favor since the property cannot be
lawfully possessed in the first place.
The same goes true even if Proclamation No. 201 and Proclamation No. 447 were made subject to private
rights. The Court stated in Republic v. Bacas,47 viz.:
Regarding the subject lots, there was a reservation respecting ‘private rights.’ In Republic v. Estonilo, where
the Court earlier declared that Lot No. 4319 was part of the Camp Evangelista Military Reservation and,
therefore, not registrable, it noted the proviso in Presidential Proclamation No. 265 requiring the reservation
to be subject to private rights as meaning that persons claiming rights over the reserved land were not
precluded from proving their claims. Stated differently, the said proviso did not preclude the LRC from
determining whether x x x the respondents indeed had registrable rights over the property.
As there has been no showing that the subject parcels of land had been segregated from the military
reservation, the respondents had to prove that the subject properties were alienable or disposable
land of the public domain prior to its withdrawal from sale and settlement and reservation for
military purposes under Presidential Proclamation No. 265. The question is primordial importance
because it is determinative if the land can in fact be subject to acquisitive prescription and, thus, registrable
under the Torrens system. Without first determining the nature and character of the land, all other
requirements such as length and nature of possession and occupation over such land do not come into
play. The required length of possession does not operate when the land is part of the public domain.
In this case, however, the respondents miserably failed to prove that, before the proclamation, the subject
lands were already private lands. They merely relied on such ‘recognition’ of possible private rights. In their
application, they alleged that at the time of their application, they had been in open, continuous, exclusive
and notorious possession of the subject parcels of land for at least thirty (30) years and became its owners by
prescription. There was, however, no allegation or showing that the government had earlier declared it open
for sale or settlement, or that it was already pronounced as inalienable and disposable. 48
In view of the foregoing, the Court finds that Rev. Cortez failed to conclusively establish his claimed right
over the subject portion of Palaui Island as would entitle him to the issuance of a final injunction.
Anent the technical issue raised by Rev. Cortez, i. e, that the Republic has no personality to bring this
Petition since it was not a party before the CA, the Court deems it prudent to set aside this procedural
barrier. After all, "a party's standing before [the] Court is a [mere] procedural technicality which may, in the
exercise of [its] discretion, be set aside in view of the importance of the issue raised." 49
We note that Rev. Cortez alleged that he sought the injunction so that he could continue his humanitarian
works. However, considering that inalienable public land was involved, this Court is constrained to rule in
accordance with the aforementioned.
WHEREFORE, the Petition is GRANTED. The June 29, 2011 Decision of the Court of Appeals in CA-
GR. CV No. 89968 denying the appeal and affirming the July 3, 2007 Decision of the Regional Trial Court
of Aparri, Cagayan-Branch 08 in Spl. Civil Action Case No. II-2403, is REVERSED and SET
ASIDE. Accordingly, the final injunction issued in this case is ordered DISSOLVED and the Petition for
Injunction in Spl. Civil Action Case No. II-2403, DISMISSED.
SO ORDERED.

75
THIRD DIVISION
G.R. No. 203585 July 29, 2013
MILA CABOVERDE TANTANO and ROSELLER CABOVERDE, Petitioners,
vs.
DOMINALDA ESPINA-CABOVERDE, EVE CABOVERDE-YU, FE CABOVERDE-LABRADOR,
and JOSEPHINE E. CABOVERDE, Respondents.
DECISION
VELASCO, JR., J.:
The Case
Assailed in this petition for review under Rule 45 are the Decision and Resolution of the Court of Appeals
(CA) rendered on June 25, 2012 and September 21, 2012, respectively, in CA-G.R. SP. No. 03834, which
effectively affirmed the Resolutions dated February 8, 20 I 0 and July 19, 2010 of the Regional Trial Court
(RTC) of Sindangan, Zamboanga del Norte, Branch 11, in Civil Case No. S-760, approving respondent
Dominalda Espina-Caboverde's application for receivership and appointing the receivers over the disputed
properties.
The Facts
Petitioners Mila Caboverde Tantano (Mila) and Roseller Caboverde (Roseller) are children of respondent
Dominalda Espina-Caboverde (Dominalda) and siblings of other respondents in this case, namely: Eve
Caboverde-Yu (Eve), Fe Caboverde-Labrador (Fe), and Josephine E. Caboverde (Josephine).
Petitioners and their siblings, Ferdinand, Jeanny and Laluna, are the registered owners and in possession of
certain parcels of land, identified as Lots 2, 3 and 4 located at Bantayan, Sindangan and Poblacion,
Sindangan in Zamboanga del Norte, having purchased them from their parents, Maximo and Dominalda
Caboverde.1
The present controversy started when on March 7, 2005, respondents Eve and Fe filed a complaint before
the RTC of Sindangan, Zamboanga del Norte where they prayed for the annulment of the Deed of Sale
purportedly transferring Lots 2, 3 and 4 from their parents Maximo and Dominalda in favor of petitioners
Mila and Roseller and their other siblings, Jeanny, Laluna and Ferdinand. Docketed as Civil Case No. S-
760, the case was raffled to Branch 11 of the court.
In their verified Answer, the defendants therein, including Maximo and Dominalda, posited the validity and
due execution of the contested Deed of Sale.
During the pendency of Civil Case No. S-760, Maximo died. On May 30, 2007, Eve and Fe filed an
Amended Complaint with Maximo substituted by his eight (8) children and his wife Dominalda. The
Amended Complaint reproduced the allegations in the original complaint but added eight (8) more real
properties of the Caboverde estate in the original list.
As encouraged by the RTC, the parties executed a Partial Settlement Agreement (PSA) where they fixed the
sharing of the uncontroverted properties among themselves, in particular, the adverted additional eight (8)
parcels of land including their respective products and improvements. Under the PSA, Dominalda’s
daughter, Josephine, shall be appointed as Administrator. The PSA provided that Dominalda shall be
entitled to receive a share of one-half (1/2) of the net income derived from the uncontroverted properties.
The PSA also provided that Josephine shall have special authority, among others, to provide for the
medicine of her mother.
The parties submitted the PSA to the court on or about March 10, 2008 for approval. 2
Before the RTC could act on the PSA, Dominalda, who, despite being impleaded in the case as defendant,
filed a Motion to Intervene separately in the case. Mainly, she claimed that the verified Answer which she
filed with her co-defendants contained several material averments which were not representative of the true
events and facts of the case. This document, she added, was never explained to her or even read to her when
it was presented to her for her signature.
On May 12, 2008, Dominalda filed a Motion for Leave to Admit Amended Answer, attaching her Amended
Answer where she contradicted the contents of the aforesaid verified Answer by declaring that there never
76
was a sale of the three (3) contested parcels of land in favor of Ferdinand, Mila, Laluna, Jeanny and Roseller
and that she and her husband never received any consideration from them. She made it clear that they
intended to divide all their properties equally among all their children without favor. In sum, Dominalda
prayed that the reliefs asked for in the Amended Complaint be granted with the modification that her
conjugal share and share as intestate heir of Maximo over the contested properties be recognized. 3
The RTC would later issue a Resolution granting the Motion to Admit Amended Answer. 4
On May 13, 2008, the court approved the PSA, leaving three (3) contested properties, Lots 2, 3, and 4, for
further proceedings in the main case.
Fearing that the contested properties would be squandered, Dominalda filed with the RTC on July 15, 2008
a Verified Urgent Petition/Application to place the controverted Lots 2, 3 and 4 under receivership. Mainly,
she claimed that while she had a legal interest in the controverted properties and their produce, she could not
enjoy them, since the income derived was solely appropriated by petitioner Mila in connivance with her
selected kin. She alleged that she immediately needs her legal share in the income of these properties for her
daily sustenance and medical expenses. Also, she insisted that unless a receiver is appointed by the court,
the income or produce from these properties is in grave danger of being totally dissipated, lost and entirely
spent solely by Mila and some of her selected kin. Paragraphs 5, 6, 7, and 8 of the Verified Urgent
Petition/Application for Receivership5 (Application for Receivership) capture Dominalda’s angst and
apprehensions:
5. That all the income of Lot Nos. 2, 3 and 4 are collected by Mila Tantano, thru her collector Melinda
Bajalla, and solely appropriated by Mila Tantano and her selected kins, presumably with Roseller E.
Caboverde, Ferdinand E. Caboverde, Jeanny Caboverde and Laluna Caboverde, for their personal use and
benefit;
6. That defendant Dominalda Espina Caboverde, who is now sickly, in dire need of constant medication or
medical attention, not to mention the check-ups, vitamins and other basic needs for daily sustenance, yet
despite the fact that she is the conjugal owner of the said land, could not even enjoy the proceeds or income
as these are all appropriated solely by Mila Tantano in connivance with some of her selected kins;
7. That unless a receiver is appointed by the court, the income or produce from these lands, are in grave
danger of being totally dissipated, lost and entirely spent solely by Mila Tantano in connivance with some of
her selected kins, to the great damage and prejudice of defendant Dominalda Espina Caboverde, hence, there
is no other most feasible, convenient, practicable and easy way to get, collect, preserve, administer and
dispose of the legal share or interest of defendant Dominalda Espina Caboverde except the appointment of a
receiver x x x;
xxxx
9. That insofar as the defendant Dominalda Espina Caboverde is concerned, time is of the utmost essence.
She immediately needs her legal share and legal interest over the income and produce of these lands so that
she can provide and pay for her vitamins, medicines, constant regular medical check-up and daily
sustenance in life. To grant her share and interest after she may have passed away would render everything
that she had worked for to naught and waste, akin to the saying "aanhin pa ang damo kung patay na ang
kabayo."
On August 27, 2009, the court heard the Application for Receivership and persuaded the parties to discuss
among themselves and agree on how to address the immediate needs of their mother. 6
On October 9, 2009, petitioners and their siblings filed a Manifestation formally expressing their
concurrence to the proposal for receivership on the condition, inter alia, that Mila be appointed the receiver,
and that, after getting the 2/10 share of Dominalda from the income of the three (3) parcels of land, the
remainder shall be divided only by and among Mila, Roseller, Ferdinand, Laluna and Jeanny. The court,
however, expressed its aversion to a party to the action acting as receiver and accordingly asked the parties
to nominate neutral persons.7
On February 8, 2010, the trial court issued a Resolution granting Dominalda’s application for receivership
over Lot Nos. 2, 3 and 4. The Resolution reads:
As regards the second motion, the Court notes the urgency of placing Lot 2 situated at Bantayan, covered by
TCT No. 46307; Lot 3 situated at Poblacion, covered by TCT No. T-8140 and Lot 4 also situated at
Poblacion covered by TCT No. T-8140, all of Sindangan, Zamboanga del Norte under receivership as
defendant Dominalda Espina Caboverde (the old and sickly mother of the rest of the parties) who claims to
be the owner of the one-half portion of the properties under litigation as her conjugal share and a portion of
the estate of her deceased husband Maximo, is in dire need for her medication and daily sustenance. As
agreed by the parties, Dominalda Espina Caboverde shall be given 2/10 shares of the net monthly income
and products of the said properties.8
In the same Resolution, the trial court again noted that Mila, the nominee of petitioners, could not discharge
the duties of a receiver, she being a party in the case.9 Thus, Dominalda nominated her husband’s relative,
Annabelle Saldia, while Eve nominated a former barangay kagawad, Jesus Tan. 10
Petitioners thereafter moved for reconsideration raising the arguments that the concerns raised by
Dominalda in her Application for Receivership are not grounds for placing the properties in the hands of a
receiver and that she failed to prove her claim that the income she has been receiving is insufficient to
support her medication and medical needs. By Resolution 11 of July 19, 2010, the trial court denied the
motion for reconsideration and at the same time appointed Annabelle Saldia as the receiver for Dominalda
and Jesus Tan as the receiver for Eve. The trial court stated:
As to the issue of receivership, the Court stands by its ruling in granting the same, there being no cogent
reason to overturn it. As intimated by the movant-defendant Dominalda Caboverde, Lots 2, 3 and 4 sought
to be under receivership are not among those lots covered by the adverted Partial Amicable Settlement. To
the mind of the Court, the fulfilment or non-fulfilment of the terms and conditions laid therein nonetheless
have no bearing on these three lots. Further, as correctly pointed out by her, there is possibility that these
Lots 2, 3, and 4, of which the applicant has interest, but are in possession of other defendants who are the
ones enjoying the natural and civil fruits thereof which might be in the danger of being lost, removed or
materially injured. Under this precarious condition, they must be under receivership, pursuant to Sec. 1 (a)
of Rule 59. Also, the purpose of the receivership is to procure money from the proceeds of these properties
to spend for medicines and other needs of the movant defendant Dominalda Caboverde who is old and
sickly. This circumstance falls within the purview of Sec. 1(d), that is, "Whenever in other cases it appears
that the appointment of a receiver is the most convenient and feasible means of preserving, administering, or
disposing of the property in litigation."
Both Annabelle Saldia and Jesus Tan then took their respective oaths of office and filed a motion to fix and
approve bond which was approved by the trial court over petitioners’ opposition.
Undaunted, petitioners filed an Urgent Precautionary Motion to Stay Assumption of Receivers dated August
9, 2010 reiterating what they stated in their motion for reconsideration and expressing the view that the grant
of receivership is not warranted under the circumstances and is not consistent with applicable rules and
jurisprudence. The RTC, on the postulate that the motion partakes of the nature of a second motion for
reconsideration, thus, a prohibited pleading, denied it via a Resolution dated October 7, 2011 where it
likewise fixed the receiver’s bond at PhP 100,000 each. The RTC stated:
[1] The appointed receivers, JESUS A. TAN and ANNABELLE DIAMANTE-SALDIA, are considered
duly appointed by this Court, not only because their appointments were made upon their proper nomination
from the parties in this case, but because their appointments have been duly upheld by the Court of Appeals
in its Resolution dated 24 May 2011 denying the herein defendants’ (petitioners therein) application for a
writ of preliminary injunction against the 8 February 2010 Resolution of this Court placing the properties
(Lots 2, 3 and 4) under receivership by the said JESUS A. TAN and ANNABELLE DIAMANTE-SALDIA,
and Resolution dated 29 July 2011 denying the herein defendants’ (petitioners therein) motion for
reconsideration of the 24 May 2011 Resolution, both, for lack of merit. In its latter Resolution, the Court of
Appeals states:
A writ of preliminary injunction, as an ancillary or preventive remedy, may only be resorted to by a litigant
to protect or preserve his rights or interests and for no other purpose during the pendency of the principal
77
action. But before a writ of preliminary injunction may be issued, there must be a clear showing that there
exists a right to be protected and that the acts against which the writ is to be directed are violative of the said
right and will cause irreparable injury.
Unfortunately, petitioners failed to show that the acts of the receivers in this case are inimical to their rights
as owners of the property. They also failed to show that the non-issuance of the writ of injunction will cause
them irreparable injury. The court-appointed receivers merely performed their duties as administrators of the
disputed lots. It must be stressed that the trial court specifically appointed these receivers to preserve the
properties and its proceeds to avoid any prejudice to the parties until the main case is resolved, Hence, there
is no urgent need to issue the injunction.
ACCORDINGLY, the motion for reconsideration is DENIED for lack of merit.
SO ORDERED.
xxxx
WHEREFORE, premises considered, this Court RESOLVES, as it is hereby RESOLVED, that:
1. The defendants’ "Urgent Precautionary Motion to Stay Assumption of Receivers" be DENIED for lack of
merit. Accordingly, it being patently a second motion for reconsideration, a prohibited pleading, the same is
hereby ordered EXPUNGED from the records;
2. The "Motion to Fix the Bond, Acceptance and Approval of the Oath of Office, and Bond of the Receiver"
of defendant Dominalda Espina Caboverde, be GRANTED with the receivers’ bond set and fixed at ONE
HUNDRED THOUSAND PESOS (Ph₱100,000.00) each.12
It should be stated at this juncture that after filing their Urgent Precautionary Motion to Stay Assumption of
Receivers but before the RTC could rule on it, petitioners filed a petition for certiorari with the CA dated
September 29, 2010 seeking to declare null and void the February 8, 2010 Resolution of the RTC granting
the Application for Receivership and its July 19, 2010 Resolution denying the motion for reconsideration
filed by petitioners and appointing the receivers nominated by respondents. The petition was anchored on
two grounds, namely: (1) non-compliance with the substantial requirements under Section 2, Rule 59 of the
1997 Rules of Civil
Procedure because the trial court appointed a receiver without requiring the applicant to file a bond; and (2)
lack of factual or legal basis to place the properties under receivership because the applicant presented
support and medication as grounds in her application which are not valid grounds for receivership under the
rules.
On June 25, 2012, the CA rendered the assailed Decision denying the petition on the strength of the
following premises and ratiocination:
Petitioners harp on the fact that the court a quo failed to require Dominalda to post a bond prior to the
issuance of the order appointing a receiver, in violation of Section 2, Rule 59 of the Rules of court which
provides that:
SEC. 2. Bond on appointment of receiver.-- Before issuing the order appointing a receiver the court shall
require the applicant to file a bond executed to the party against whom the application is presented, in an
amount to be fixed by the court, to the effect that the applicant will pay such party all damages he may
sustain by reason of the appointment of such receiver in case the applicant shall have procured such
appointment without sufficient cause; and the court may, in its discretion, at any time after the appointment,
require an additional bond as further security for such damages.
The Manifestation dated September 30, 2009 filed by petitioners wherein "they formally manifested their
concurrence" to the settlement on the application for receivership estops them from questioning the
sufficiency of the cause for the appointment of the receiver since they themselves agreed to have the
properties placed under receivership albeit on the condition that the same be placed under the administration
of Mila. Thus, the filing of the bond by Dominalda for this purpose becomes unnecessary.
It must be emphasized that the bond filed by the applicant for receivership answers only for all damages that
the adverse party may sustain by reason of the appointment of such receiver in case the applicant shall have
procured such appointment without sufficient cause; it does not answer for damages suffered by reason of
the failure of the receiver to discharge his duties faithfully or to obey the orders of the court, inasmuch as
such damages are covered by the bond of the receiver.
As to the second ground, petitioners insist that there is no justification for placing the properties under
receivership since there was neither allegation nor proof that the said properties, not the fruits thereof, were
in danger of being lost or materially injured. They believe that the public respondent went out of line when
he granted the application for receivership for the purpose of procuring money for the medications and basic
needs of Dominalda despite the income she’s supposed to receive under the Partial Settlement Agreement.
The court a quo has the discretion to decide whether or not the appointment of a receiver is necessary. In this
case, the public respondent took into consideration that the applicant is already an octogenarian who may
not live up to the day when this conflict will be finally settled. Thus, We find that he did not act with grave
abuse of discretion amounting to lack or excess of jurisdiction when he granted the application for
receivership based on Section 1(d) of Rule 59 of the Rules of Court.
A final note, a petition for certiorari may be availed of only when there is no appeal, nor any plain, speedy
and adequate remedy in the ordinary course of law. In this case, petitioners may still avail of the remedy
provided in Section 3, Rule 59 of the said Rule where they can seek for the discharge of the receiver.
FOR REASONS STATED, the petition for certiorari is DENIED.
SO ORDERED.13
Petitioners’ Motion for Reconsideration was also denied by the CA on September 21, 2012. 14
Hence, the instant petition, petitioners effectively praying that the approval of respondent Dominalda’s
application for receivership and necessarily the concomitant appointment of receivers be revoked.
The Issues
Petitioners raise the following issues in their petition:
(1) Whether or not the CA committed grave abuse of discretion in sustaining the appointment of a receiver
despite clear showing that the reasons advanced by the applicant are not any of those enumerated by the
rules; and
(2) Whether or not the CA committed grave abuse of discretion in upholding the Resolution of the RTC and
ruling that the receivership bond is not required prior to appointment despite clear dictates of the rules.
The Court’s Ruling
The petition is impressed with merit.
We have repeatedly held that receivership is a harsh remedy to be granted with utmost circumspection and
only in extreme situations. The doctrinal pronouncement in Velasco & Co. v. Gochico & Co is instructive:
The power to appoint a receiver is a delicate one and should be exercised with extreme caution and only
under circumstances requiring summary relief or where the court is satisfied that there is imminent danger of
loss, lest the injury thereby caused be far greater than the injury sought to be averted. The court should
consider the consequences to all of the parties and the power should not be exercised when it is likely to
produce irreparable injustice or injury to private rights or the facts demonstrate that the appointment will
injure the interests of others whose rights are entitled to as much consideration from the court as those of the
complainant.15
To recall, the RTC approved the application for receivership on the stated rationale that receivership was the
most convenient and feasible means to preserve and administer the disputed properties. As a corollary, the
RTC, agreeing with the applicant Dominalda, held that placing the disputed properties under receivership
would ensure that she would receive her share in the income which she supposedly needed in order to pay
for her vitamins, medicines, her regular check-ups and daily sustenance. Considering that, as the CA put it,
the applicant was already an octogenarian who may not live up to the day when the conflict will be finally
settled, the RTC did not act with grave abuse of discretion amounting to lack or excess of jurisdiction when
it granted the application for receivership since it was justified under Sec. 1(d), Rule 59 of the Rules of
Court, which states:
78
Section 1. Appointment of a receiver. – Upon a verified application, one or more receivers of the property
subject of the action or proceeding may be appointed by the court where the action is pending, or by the
Court of Appeals or by the Supreme Court, or a member thereof, in the following cases:
xxxx
(d) Whenever in other cases it appears that the appointment of a receiver is the most convenient and feasible
means of preserving, administering, or disposing of the property in litigation. (Emphasis supplied.)
Indeed, Sec. 1(d) above is couched in general terms and broad in scope, encompassing instances not covered
by the other grounds enumerated under the said section. 16 However, in granting applications for receivership
on the basis of this section, courts must remain mindful of the basic principle that receivership may be
granted only when the circumstances so demand, either because the property sought to be placed in the
hands of a receiver is in danger of being lost or because they run the risk of being impaired, 17 and that being
a drastic and harsh remedy, receivership must be granted only when there is a clear showing of necessity for
it in order to save the plaintiff from grave and immediate loss or damage. 18
Before appointing a receiver, courts should consider: (1) whether or not the injury resulting from such
appointment would probably be greater than the injury ensuing if the status quo is left undisturbed; and (2)
whether or not the appointment will imperil the interest of others whose rights deserve as much a
consideration from the court as those of the person requesting for receivership. 19
Moreover, this Court has consistently ruled that where the effect of the appointment of a receiver is to take
real estate out of the possession of the defendant before the final adjudication of the rights of the parties, the
appointment should be made only in extreme cases.20
After carefully considering the foregoing principles and the facts and circumstances of this case, We find
that the grant of Dominalda’s Application for Receivership has no leg to stand on for reasons discussed
below.
First, Dominalda’s alleged need for income to defray her medical expenses and support is not a valid
justification for the appointment of a receiver. The approval of an application for receivership merely on this
ground is not only unwarranted but also an arbitrary exercise of discretion because financial need and like
reasons are not found in Sec. 1 of Rule 59 which prescribes specific grounds or reasons for granting
receivership. The RTC’s insistence that the approval of the receivership is justified under Sec. 1(d) of Rule
59, which seems to be a catch-all provision, is far from convincing. To be clear, even in cases falling under
such provision, it is essential that there is a clear showing that there is imminent danger that the properties
sought to be placed under receivership will be lost, wasted or injured.
Second, there is no clear showing that the disputed properties are in danger of being lost or materially
impaired and that placing them under receivership is most convenient and feasible means to preserve,
administer or dispose of them.
Based on the allegations in her application, it appears that Dominalda sought receivership mainly because
she considers this the best remedy to ensure that she would receive her share in the income of the disputed
properties. Much emphasis has been placed on the fact that she needed this income for her medical expenses
and daily sustenance. But it can be gleaned from her application that, aside from her bare assertion that
petitioner Mila solely appropriated the fruits and rentals earned from the disputed properties in connivance
with some of her siblings, Dominalda has not presented or alleged anything else to prove that the disputed
properties were in danger of being wasted or materially injured and that the appointment of a receiver was
the most convenient and feasible means to preserve their integrity.
Further, there is nothing in the RTC’s February 8 and July 19, 2010 Resolutions that says why the disputed
properties might be in danger of being lost, removed or materially injured while in the hands of the
defendants a quo. Neither did the RTC explain the reasons which compelled it to have them placed under
receivership. The RTC simply declared that placing the disputed properties under receivership was urgent
and merely anchored its approval on the fact that Dominalda was an elderly in need of funds for her
medication and sustenance. The RTC plainly concluded that since the purpose of the receivership is to
procure money from the proceeds of these properties to spend for medicines and other needs of the
Dominalda, who is old and sickly, this circumstance falls within the purview of Sec. 1(d), that is, "Whenever appoint a receiver, there is no need for an applicant’s bond because under Sec. 2 of Rule 59, the very
in other cases it appears that the appointment of a receiver is the most convenient and feasible means of purpose of the bond is to answer for all damages that may be sustained by a party by reason of the
preserving, administering, or disposing of the property in litigation." appointment of a receiver in case the applicant shall have procured such appointment without sufficient
Verily, the RTC’s purported determination that the appointment of a receiver is the most convenient and cause. Thus, they further argue that what is needed is the receiver’s bond which was already fixed and
feasible means of preserving, administering or disposing of the properties is nothing but a hollow conclusion approved by the RTC.28 Also, the CA found that there was no need for Dominalda to file a bond considering
drawn from inexistent factual considerations. that petitioners filed a Manifestation where they formally consented to the receivership. Hence, it was as if
Third, placing the disputed properties under receivership is not necessary to save Dominalda from grave and petitioners agreed that there was sufficient cause to place the disputed properties under receivership; thus,
immediate loss or irremediable damage. Contrary to her assertions, Dominalda is assured of receiving the CA declared that petitioners were estopped from challenging the sufficiency of such cause.
income under the PSA approved by the RTC providing that she was entitled to receive a share of one-half The foregoing arguments are misplaced. Sec. 2 of Rule 59 is very clear in that before issuing the order
(1/2) of the net income derived from the uncontroverted properties. Pursuant to the PSA, Josephine, the appointing a receiver the court shall require the applicant to file a bond executed to the party against whom
daughter of Dominalda, was appointed by the court as administrator of the eight (8) uncontested lots with the application is presented. The use of the word "shall" denotes its mandatory nature; thus, the consent of
special authority to provide for the medicine of her mother. Thus, it was patently erroneous for the RTC to the other party, or as in this case, the consent of petitioners, is of no moment. Hence, the filing of an
grant the Application for Receivership in order to ensure Dominalda of income to support herself because applicant’s bond is required at all times. On the other hand, the requirement of a receiver’s bond rests upon
precisely, the PSA already provided for that. It cannot be over-emphasized that the parties in Civil Case No. the discretion of the court. Sec. 2 of Rule 59 clearly states that the court may, in its discretion, at any time
S-760 were willing to make arrangements to ensure that Dominalda was provided with sufficient income. In after the appointment, require an additional bond as further security for such damages.
fact, the RTC, in its February 8, 2010 Resolution granting the Application for Receivership, noted the WHEREFORE, upon the foregoing considerations, this petition is GRANTED. The assailed CA June 25,
agreement of the parties that "Dominalda Espina Caboverde shall be given 2/10 shares of the net monthly 2012 Decision and September 21, 2012 Resolution in CA-G.R. SP No. 03834 are hereby REVERSED and
income and products of said properties."21 SET ASIDE. The Resolutions dated February 8, 2010 and July 19, 2010 of the RTC, Branch 11 in
Finally, it must be noted that the defendants in Civil Case No. S-760 are the registered owners of the Sindangan, Zamboanga del Norte, in Civil Case No. S-760, approving respondent Dominalda Espina-
disputed properties that were in their possession. In cases such as this, it is settled jurisprudence that the Caboverde’s application for receivership and appointing the receivers over the disputed properties are
appointment should be made only in extreme cases and on a clear showing of necessity in order to save the likewise SET ASIDE.
plaintiff from grave and irremediable loss or damage.22 SO ORDERED.
This Court has held that a receiver should not be appointed to deprive a party who is in possession of the
property in litigation, just as a writ of preliminary injunction should not be issued to transfer property in
litigation from the possession of one party to another where the legal title is in dispute and the party having
possession asserts ownership in himself, except in a very clear case of evident usurpation. 23
Furthermore, this Court has declared that the appointment of a receiver is not proper when the rights of the
parties, one of whom is in possession of the property, depend on the determination of their respective claims
to the title of such property24 unless such property is in danger of being materially injured or lost, as by the
prospective foreclosure of a mortgage on it or its portions are being occupied by third persons claiming
adverse title.25
It must be underscored that in this case, Dominalda’s claim to the disputed properties and her share in the
properties’ income and produce is at best speculative precisely because the ownership of the disputed
properties is yet to be determined in Civil Case No. S-760. Also, except for Dominalda’s claim that she has
an interest in the disputed properties, Dominalda has no relation to their produce or income.1âwphi1
By placing the disputed properties and their income under receivership, it is as if the applicant has obtained
indirectly what she could not obtain directly, which is to deprive the other parties of the possession of the
property until the controversy between them in the main case is finally settled.26 This Court cannot
countenance this arrangement.
To reiterate, the RTC’s approval of the application for receivership and the deprivation of petitioners of
possession over the disputed properties would be justified only if compelling reasons exist. Unfortunately,
no such reasons were alleged, much less proved in this case.
In any event, Dominalda’s rights may be amply protected during the pendency of Civil Case No. S-760 by
causing her adverse claim to be annotated on the certificates of title covering the disputed properties. 27
As regards the issue of whether or not the CA was correct in ruling that a bond was not required prior to the
appointment of the receivers in this case, We rule in the negative.
Respondents Eve and Fe claim that there are sufficient grounds for the appointment of receivers in this case
and that in fact, petitioners agreed with them on the existence of these grounds when they acquiesced to
Dominalda’s Application for Receivership. Thus, respondents insist that where there is sufficient cause to

79
 SECOND DIVISION
G.R. No. 135706 October 1, 2004
SPS. CESAR A. LARROBIS, JR. and VIRGINIA S. LARROBIS, petitioners,
vs.
PHILIPPINE VETERANS BANK, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review of the decision of the Regional Trial Court (RTC), Cebu City, Branch 24,
dated April 17, 1998,1 and the order denying petitioner’s motion for reconsideration dated August 25, 1998,
raising pure questions of law.2
The following facts are uncontroverted:
On March 3, 1980, petitioner spouses contracted a monetary loan with respondent Philippine
Veterans Bank in the amount of ₱135,000.00, evidenced by a promissory note, due and
demandable on February 27, 1981, and secured by a Real Estate Mortgage executed on their lot
together with the improvements thereon.
On March 23, 1985, the respondent bank went bankrupt and was placed under
receivership/liquidation by the Central Bank from April 25, 1985 until August 1992.3
On August 23, 1985, the bank, through Francisco Go, sent the spouses a demand letter for "accounts
receivable in the total amount of ₱6,345.00 as of August 15, 1984," 4 which pertains to the insurance
premiums advanced by respondent bank over the mortgaged property of petitioners. 5
On August 23, 1995, more than fourteen years from the time the loan became due and demandable,
respondent bank filed a petition for extrajudicial foreclosure of mortgage of petitioners’ property.6 On
October 18, 1995, the property was sold in a public auction by Sheriff Arthur Cabigon with Philippine
Veterans Bank as the lone bidder.
On April 26, 1996, petitioners filed a complaint with the RTC, Cebu City, to declare the extra-judicial
foreclosure and the subsequent sale thereof to respondent bank null and void. 7
In the pre-trial conference, the parties agreed to limit the issue to whether or not the period within which the
bank was placed under receivership and liquidation was a fortuitous event which suspended the running of
the ten-year prescriptive period in bringing actions.8
On April 17, 1998, the RTC rendered its decision, the fallo of which reads:
WHEREFORE, premises considered judgment is hereby rendered dismissing the complaint for
lack of merit. Likewise the compulsory counterclaim of defendant is dismissed for being
unmeritorious.9
It reasoned that:
…defendant bank was placed under receivership by the Central Bank from April 1985 until 1992.
The defendant bank was given authority by the Central Bank to operate as a private commercial
bank and became fully operational only on August 3, 1992. From April 1985 until July 1992,
defendant bank was restrained from doing its business. Doing business as construed by Justice
Laurel in 222 SCRA 131 refers to:
"….a continuity of commercial dealings and arrangements and contemplates to that
extent, the performance of acts or words or the exercise of some of the functions
normally incident to and in progressive prosecution of the purpose and object of its
organization."
The defendant bank’s right to foreclose the mortgaged property prescribes in ten (10) years but
such period was interrupted when it was placed under receivership. Article 1154 of the New Civil
Code to this effect provides:
"The period during which the obligee was prevented by a fortuitous event from enforcing
his right is not reckoned against him."
80
In the case of Provident Savings Bank vs. Court of Appeals, 222 SCRA 131, the Supreme Court
said.
"Having arrived at the conclusion that a foreclosure is part of a bank’s activity which could not
have been pursued by the receiver then because of the circumstances discussed in the Central Bank
case, we are thus convinced that the prescriptive period was legally interrupted by fuerza mayor in
1972 on account of the prohibition imposed by the Monetary Board against petitioner from
transacting business, until the directive of the Board was nullified in 1981. Indeed, the period
during which the obligee was prevented by a caso fortuito from enforcing his right is not reckoned
against him. (Art. 1154, NCC) When prescription is interrupted, all the benefits acquired so far
from the possession cease and when prescription starts anew, it will be entirely a new one. This
concept should not be equated with suspension where the past period is included in the
computation being added to the period after the prescription is presumed (4 Tolentino,
Commentaries and Jurisprudence on the Civil Code of the Philippines 1991 ed. pp. 18-19),
consequently, when the closure of the petitioner was set aside in 1981, the period of ten years
within which to foreclose under Art. 1142 of the N.C.C. began to run and, therefore, the action
filed on August 21, 1986 to compel petitioner to release the mortgage carried with it the mistaken
notion that petitioner’s own suit for foreclosure has prescribed."
Even assuming that the liquidation of defendant bank did not affect its right to foreclose the
plaintiffs’ mortgaged property, the questioned extrajudicial foreclosure was well within the ten
(10) year prescriptive period. It is noteworthy to mention at this point in time, that defendant bank
through authorized Deputy Francisco Go made the first extrajudicial demand to the plaintiffs on
August 1985. Then on March 24, 1995 defendant bank through its officer-in-charge Llanto made
the second extrajudicial demand. And we all know that a written extrajudicial demand wipes out
the period that has already elapsed and starts anew the prescriptive period. (Ledesma vs. C.A., 224
SCRA 175.)10
Petitioners filed a motion for reconsideration which the RTC denied on August 25, 1998. 11 Thus, the present
petition for review where petitioners claim that the RTC erred:
I
…IN RULING THAT THE PERIOD WITHIN WHICH RESPONDENT BANK WAS PUT
UNDER RECEIVERSHIP AND LIQUIDATION WAS A FORTUITOUS EVENT THAT
INTERRUPTED THE RUNNING OF THE PRESCRIPTIVE PERIOD.
II
…IN RULING THAT THE WRITTEN EXTRA-JUDICIAL DEMAND MADE BY
RESPONDENT ON PETITIONERS WIPED OUT THE PERIOD THAT HAD ALREADY
ELAPSED.
III
…IN DENYING PETITIONERS’ MOTION FOR RECONSIDERATION OF ITS HEREIN
ASSAILED DECISION.12
Petitioners argue that: since the extra-judicial foreclosure of the real estate mortgage was effected by the
bank on October 18, 1995, which was fourteen years from the date the obligation became due on February
27, 1981, said foreclosure and the subsequent sale at public auction should be set aside and declared null and
void ab initio since they are already barred by prescription; the court a quo erred in sustaining the
respondent’s theory that its having been placed under receivership by the Central Bank between April 1985
and August 1992 was a fortuitous event that interrupted the running of the prescriptive period; 13 the court a
quo’s reliance on the case of Provident Savings Bank vs. Court of Appeals14 is misplaced since they have
different sets of facts; in the present case, a liquidator was duly appointed for respondent bank and there was
no judgment or court order that would legally or physically hinder or prohibit it from foreclosing petitioners’
property; despite the absence of such legal or physical hindrance, respondent bank’s receiver or liquidator
failed to foreclose petitioners’ property and therefore such inaction should bind respondent
bank;15 foreclosure of mortgages is part of the receiver’s/liquidator’s duty of administering the bank’s assets
for the benefit of its depositors and creditors, thus, the ten-year prescriptive period which started on
February 27, 1981, was not interrupted by the time during which the respondent bank was placed under
receivership; and the Monetary Board’s prohibition from doing business should not be construed as barring
any and all business dealings and transactions by the bank, otherwise, the specific mandate to foreclose
mortgages under Sec. 29 of R.A. No. 265 as amended by Executive Order No. 65 would be rendered
nugatory.16 Said provision reads:
Section 29. Proceedings upon Insolvency – Whenever, upon examination by the head of the
appropriate supervising or examining department or his examiners or agents into the condition of
any bank or non-bank financial intermediary performing quasi-banking functions, it shall be
disclosed that the condition of the same is one of insolvency, or that its continuance in business
would involve probable loss to its depositors or creditors, it shall be the duty of the department
head concerned forthwith, in writing, to inform the Monetary Board of the facts. The Board may,
upon finding the statements of the department head to be true, forbid the institution to do business
in the Philippines and designate the official of the Central Bank or a person of recognized
competence in banking or finance, as receiver to immediately take charge its assets and liabilities,
as expeditiously as possible, collect and gather all the assets and administer the same for the
benefit of its creditors, and represent the bank personally or through counsel as he may retain in all
actions or proceedings for or against the institution, exercising all the powers necessary for these
purposes including, but not limited to, bringing and foreclosing mortgages in the name of the bank.
Petitioners further contend that: the demand letter, dated March 24, 1995, was sent after the ten-year
prescriptive period, thus it cannot be deemed to have revived a period that has already elapsed; it is also not
one of the instances enumerated by Art. 1115 of the Civil Code when prescription is interrupted; 17 and the
August 23, 1985 letter by Francisco Go demanding ₱6,345.00, refers to the insurance premium on the house
of petitioners, advanced by respondent bank, thus such demand letter referred to another obligation and
could not have the effect of interrupting the running of the prescriptive period in favor of herein petitioners
insofar as foreclosure of the mortgage is concerned.18
Petitioners then prayed that respondent bank be ordered to pay them ₱100,000.00 as moral damages,
₱50,000.00 as exemplary damages and ₱100,000.00 as attorney’s fees. 19
Respondent for its part asserts that: the period within which it was placed under receivership and liquidation
was a fortuitous event that interrupted the running of the prescriptive period for the foreclosure of
petitioners’ mortgaged property; within such period, it was specifically restrained and immobilized from
doing business which includes foreclosure proceedings; the extra-judicial demand it made on March 24,
1995 wiped out the period that has already lapsed and started anew the prescriptive period; respondent
through its authorized deputy Francisco Go made the first extra-judicial demand on the petitioners on
August 23, 1985; while it is true that the first demand letter of August 1985 pertained to the insurance
premium advanced by it over the mortgaged property of petitioners, the same however formed part of the
latter’s total loan obligation with respondent under the mortgage instrument and therefore constitutes a valid
extra-judicial demand made within the prescriptive period.20
In their Reply, petitioners reiterate their earlier arguments and add that it was respondent that insured the
mortgaged property thus it should not pass the obligation to petitioners through the letter dated August
1985.21
To resolve this petition, two questions need to be answered: (1) Whether or not the period within which the
respondent bank was placed under receivership and liquidation proceedings may be considered a fortuitous
event which interrupted the running of the prescriptive period in bringing actions; and (2) Whether or not the
demand letter sent by respondent bank’s representative on August 23, 1985 is sufficient to interrupt the
running of the prescriptive period.
Anent the first issue, we answer in the negative.
81
One characteristic of a fortuitous event, in a legal sense and consequently in relations to contract, is that its
occurrence must be such as to render it impossible for a party to fulfill his obligation in a normal manner. 22
Respondent’s claims that because of a fortuitous event, it was not able to exercise its right to foreclose the
mortgage on petitioners’ property; and that since it was banned from pursuing its business and was placed
under receivership from April 25, 1985 until August 1992, it could not foreclose the mortgage on
petitioners’ property within such period since foreclosure is embraced in the phrase "doing business," are
without merit.
While it is true that foreclosure falls within the broad definition of "doing business," that is:
…a continuity of commercial dealings and arrangements and contemplates to that extent, the
performance of acts or words or the exercise of some of the functions normally incident to and in
progressive prosecution of the purpose and object of its organization. 23
it should not be considered included, however, in the acts prohibited whenever banks are "prohibited from
doing business" during receivership and liquidation proceedings.
This we made clear in Banco Filipino Savings & Mortgage Bank vs. Monetary Board, Central Bank of the
Philippines24 where we explained that:
Section 29 of the Republic Act No. 265, as amended known as the Central Bank Act, provides that
when a bank is forbidden to do business in the Philippines and placed under receivership, the
person designated as receiver shall immediately take charge of the bank’s assets and liabilities, as
expeditiously as possible, collect and gather all the assets and administer the same for the benefit
of its creditors, and represent the bank personally or through counsel as he may retain in all
actions or proceedings for or against the institution,exercising all the powers necessary for these
purposes including, but not limited to, bringing and foreclosing mortgages in the name of the
bank.25
This is consistent with the purpose of receivership proceedings, i.e., to receive collectibles and preserve the
assets of the bank in substitution of its former management, and prevent the dissipation of its assets to the
detriment of the creditors of the bank.26
When a bank is declared insolvent and placed under receivership, the Central Bank, through the Monetary
Board, determines whether to proceed with the liquidation or reorganization of the financially distressed
bank. A receiver, who concurrently represents the bank, then takes control and possession of its assets for
the benefit of the bank’s creditors. A liquidator meanwhile assumes the role of the receiver upon the
determination by the Monetary Board that the bank can no longer resume business. His task is to dispose of
all the assets of the bank and effect partial payments of the bank’s obligations in accordance with legal
priority. In both receivership and liquidation proceedings, the bank retains its juridical personality
notwithstanding the closure of its business and may even be sued as its corporate existence is assumed by
the receiver or liquidator. The receiver or liquidator meanwhile acts not only for the benefit of the bank, but
for its creditors as well.27
In Provident Savings Bank vs. Court of Appeals,28 we further stated that:
When a bank is prohibited from continuing to do business by the Central Bank and a receiver is
appointed for such bank, that bank would not be able to do new business, i.e., to grant new loans or
to accept new deposits. However, the receiver of the bank is in fact obliged to collect debts owing
to the bank, which debts form part of the assets of the bank. The receiver must assemble the assets
and pay the obligation of the bank under receivership, and take steps to prevent dissipation of such
assets. Accordingly, the receiver of the bank is obliged to collect pre-existing debts due to the
bank, and in connection therewith, to foreclose mortgages securing such debts. 29 (Emphasis
supplied.)
It is true that we also held in said case that the period during which the bank was placed under receivership
was deemed fuerza mayor which validly interrupted the prescriptive period.30 This is being invoked by the
respondent and was used as basis by the trial court in its decision. Contrary to the position of the respondent
and court a quohowever, such ruling does not find application in the case at bar.
A close scrutiny of the Provident case, shows that the Court arrived at said conclusion, which is an
exception to the general rule, due to the peculiar circumstances of Provident Savings Bank at the time. In
said case, we stated that:
Having arrived at the conclusion that a foreclosure is part of a bank’s business activity which could
not have been pursued by the receiver then because of the circumstances discussed in the Central
Bank case, we are thus convinced that the prescriptive period was legally interrupted by fuerza
mayor in 1972 on account of the prohibition imposed by the Monetary Board against petitioner
from transacting business, until the directive of the Board was nullified in 1981. 31 (Emphasis
supplied.)
Further examination of the Central Bank case reveals that the circumstances of Provident Savings Bank at
the time were peculiar because after the Monetary Board issued MB Resolution No. 1766 on September 15,
1972, prohibiting it from doing business in the Philippines, the bank’s majority stockholders immediately
went to the Court of First Instance of Manila, which prompted the trial court to issue its judgment dated
February 20, 1974, declaring null and void the resolution and ordering the Central Bank to desist from
liquidating Provident. The decision was appealed to and affirmed by this Court in 1981. Thus, the
Superintendent of Banks, which was instructed to take charge of the assets of the bank in the name of the
Monetary Board, had no power to act as a receiver of the bank and carry out the obligations specified in Sec.
29 of the Central Bank Act.32
In this case, it is not disputed that Philippine Veterans Bank was placed under receivership by the Monetary
Board of the Central Bank by virtue of Resolution No. 364 on April 25, 1985, pursuant to Section 29 of the
Central Bank Act on insolvency of banks.33
Unlike Provident Savings Bank, there was no legal prohibition imposed upon herein respondent to deter its
receiver and liquidator from performing their obligations under the law. Thus, the ruling laid down in
the Provident case cannot apply in the case at bar.
There is also no truth to respondent’s claim that it could not continue doing business from the period of
April 1985 to August 1992, the time it was under receivership. As correctly pointed out by petitioner,
respondent was even able to send petitioners a demand letter, through Francisco Go, on August 23, 1985 for
"accounts receivable in the total amount of ₱6,345.00 as of August 15, 1984" for the insurance premiums
advanced by respondent bank over the mortgaged property of petitioners. How it could send a demand letter
on unpaid insurance premiums and not foreclose the mortgage during the time it was "prohibited from doing
business" was not adequately explained by respondent.
Settled is the principle that a bank is bound by the acts, or failure to act of its receiver. 34 As we held
in Philippine Veterans Bank vs. NLRC,35 a labor case which also involved respondent bank,
… all the acts of the receiver and liquidator pertain to petitioner, both having assumed petitioner’s
corporate existence. Petitioner cannot disclaim liability by arguing that the non-payment of
MOLINA’s just wages was committed by the liquidators during the liquidation period. 36
However, the bank may go after the receiver who is liable to it for any culpable or negligent failure to
collect the assets of such bank and to safeguard its assets. 37
Having reached the conclusion that the period within which respondent bank was placed under receivership
and liquidation proceedings does not constitute a fortuitous event which interrupted the prescriptive period
in bringing actions, we now turn to the second issue on whether or not the extra-judicial demand made by
respondent bank, through Francisco Go, on August 23, 1985 for the amount of ₱6,345.00, which pertained
to the insurance premiums advanced by the bank over the mortgaged property, constitutes a valid extra-
judicial demand which interrupted the running of the prescriptive period. Again, we answer this question in
the negative.
Prescription of actions is interrupted when they are filed before the court, when there is a written extra-
judicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor. 38
Respondent’s claim that while its first demand letter dated August 23, 1985 pertained to the insurance
premium it advanced over the mortgaged property of petitioners, the same formed part of the latter’s total
82
loan obligation with respondent under the mortgage instrument, and therefore, constitutes a valid extra-
judicial demand which interrupted the running of the prescriptive period, is not plausible.
The real estate mortgage signed by the petitioners expressly states that:
This mortgage is constituted by the Mortgagor to secure the payment of the loan and/or credit
accommodation granted to the spouses Cesar A. Larrobis, Jr. and Virginia S. Larrobis in the
amount of ONE HUNDRED THIRTY FIVE THOUSAND (₱135,000.00) PESOS ONLY
Philippine Currency in favor of the herein Mortgagee.39
The promissory note, executed by the petitioners, also states that:
…FOR VALUE RECEIVED, I/WE, JOINTLY AND SEVERALLY, PROMISE TO PAY THE
PHILIPPINE VETERANS BANK, OR ORDER, AT ITS OFFICE AT CEBU CITY THE SUM
OF ONE HUNDRED THIRTY FIVE THOUSAND PESOS (P135,000.00), PHILIPPINE
CURRENCY WITH INTEREST AT THE RATE OF FOURTEEN PER CENT (14%) PER
ANNUM FROM THIS DATE UNTIL FULLY PAID.40
Considering that the mortgage contract and the promissory note refer only to the loan of petitioners in the
amount of ₱135,000.00, we have no reason to hold that the insurance premiums, in the amount of ₱6,345.00,
which was the subject of the August 1985 demand letter, should be considered as pertaining to the entire
obligation of petitioners.
In Quirino Gonzales Logging Concessionaire vs. Court of Appeals, 41 we held that the notices of foreclosure
sent by the mortgagee to the mortgagor cannot be considered tantamount to written extrajudicial demands,
which may validly interrupt the running of the prescriptive period, where it does not appear from the records
that the notes are covered by the mortgage contract.42
In this case, it is clear that the advanced payment of the insurance premiums is not part of the mortgage
contract and the promissory note signed by petitioners. They pertain only to the amount of ₱135,000.00
which is the principal loan of petitioners plus interest. The arguments of respondent bank on this point must
therefore fail.
As to petitioners’ claim for damages, however, we find no sufficient basis to award the same. For moral
damages to be awarded, the claimant must satisfactorily prove the existence of the factual basis of the
damage and its causal relation to defendant’s acts. 43 Exemplary damages meanwhile, which are imposed as a
deterrent against or as a negative incentive to curb socially deleterious actions, may be awarded only after
the claimant has proven that he is entitled to moral, temperate or compensatory damages. 44 Finally, as to
attorney’s fees, it is demanded that there be factual, legal and equitable justification for its award.45 Since the
bases for these claims were not adequately proven by the petitioners, we find no reason to grant the same.
WHEREFORE, the decision of the Regional Trial Court, Cebu City, Branch 24, dated April 17, 1998, and
the order denying petitioners’ motion for reconsideration dated August 25, 1998 are
hereby REVERSED and SET ASIDE. The extra-judicial foreclosure of the real estate mortgage on October
18, 1995, is hereby declared null and void and respondent is ordered to return to petitioners their owner’s
duplicate certificate of title.
Costs against respondent.
SO ORDERED.
 SECOND DIVISION
G.R. No. 174356 January 20, 2010
EVELINA G. CHAVEZ and AIDA CHAVEZ-DELES, Petitioners, vs. COURT OF APPEALS and ATTY.
FIDELA Y. VARGAS, Respondents.
DECISION
ABAD, J.:
This case is about the propriety of the Court of Appeals (CA), which hears the case on appeal, placing the
property in dispute under receivership upon a claim that the defendant has been remiss in making an
accounting to the plaintiff of the fruits of such property.
The Facts and the Case
Respondent Fidela Y. Vargas owned a five-hectare mixed coconut land and rice fields in Sorsogon.
Petitioner Evelina G. Chavez had been staying in a remote portion of the land with her family, planting
coconut seedlings on the land and supervising the harvest of coconut and palay. Fidela and Evelina agreed to
divide the gross sales of all products from the land between themselves. Since Fidela was busy with her law
practice, Evelina undertook to hold in trust for Fidela her half of the profits.
But Fidela claimed that Evelina had failed to remit her share of the profits and, despite demand to turn over
the administration of the property to Fidela, had refused to do so. Consequently, Fidela filed a complaint
against Evelina and her daughter, Aida C. Deles, who was assisting her mother, for recovery of possession,
rent, and damages with prayer for the immediate appointment of a receiver before the Regional Trial Court
(RTC) of Bulan, Sorsogon.1 In their answer, Evelina and Aida claimed that the RTC did not have
jurisdiction over the subject matter of the case since it actually involved an agrarian dispute.
After hearing, the RTC dismissed the complaint for lack of jurisdiction based on Fidela’s admission that
Evelina and Aida were tenants who helped plant coconut seedlings on the land and supervised the harvest of
coconut and palay. As tenants, the defendants also shared in the gross sales of the harvest. The court threw
out Fidela’s claim that, since Evelina and her family received the land already planted with fruit-bearing
trees, they could not be regarded as tenants. Cultivation, said the court, included the tending and caring of
the trees. The court also regarded as relevant Fidela’s pending application for a five-hectare retention and
Evelina’s pending protest relative to her three-hectare beneficiary share.2
Dissatisfied, Fidela appealed to the CA. She also filed with that court a motion for the appointment of a
receiver. On April 12, 2006 the CA granted the motion and ordained receivership of the land, noting that
there appeared to be a need to preserve the property and its fruits in light of Fidela’s allegation that Evelina
and Aida failed to account for her share of such fruits. 3
Parenthetically, Fidela also filed three estafa cases with the RTC of Olongapo City and a complaint for
dispossession with the Department of Agrarian Reform Adjudication Board (DARAB) against Evelina and
Aida. In all these cases, Fidela asked for the immediate appointment of a receiver for the property.
The Issues Presented
Petitioners present the following issues:
1. Whether or not respondent Fidela is guilty of forum shopping considering that she had earlier filed
identical applications for receivership over the subject properties in the criminal cases she filed with the
RTC of Olongapo City against petitioners Evelina and Aida and in the administrative case that she filed
against them before the DARAB; and
2. Whether or not the CA erred in granting respondent Fidela’s application for receivership.
The Court’s Ruling
One. By forum shopping, a party initiates two or more actions in separate tribunals, grounded on the same
cause, trusting that one or the other tribunal would favorably dispose of the matter.4 The elements of forum
shopping are the same as in litis pendentia where the final judgment in one case will amount
to res judicata in the other. The elements of forum shopping are: (1) identity of parties, or at least such
parties as would represent the same interest in both actions; (2) identity of rights asserted and relief prayed
for, the relief being founded on the same facts; and (3) identity of the two preceding particulars such that
83
any judgment rendered in the other action will, regardless of which party is successful, amount
to res judicata in the action under consideration.5
Here, however, the various suits Fidela initiated against Evelina and Aida involved different causes of action
and sought different reliefs. The present civil action that she filed with the RTC sought to recover possession
of the property based on Evelina and Aida’s failure to account for its fruits. The estafa cases she filed with
the RTC accused the two of misappropriating and converting her share in the harvests for their own benefit.
Her complaint for dispossession under Republic Act 8048 with the DARAB sought to dispossess the two for
allegedly cutting coconut trees without the prior authority of Fidela or of the Philippine Coconut Authority.
The above cases are similar only in that they involved the same parties and Fidela sought the placing of the
properties under receivership in all of them. But receivership is not an action. It is but an auxiliary remedy, a
mere incident of the suit to help achieve its purpose. Consequently, it cannot be said that the grant of
receivership in one case will amount to res judicata on the merits of the other cases. The grant or denial of
this provisional remedy will still depend on the need for it in the particular action.
Two. In any event, we hold that the CA erred in granting receivership over the property in dispute in this
case. For one thing, a petition for receivership under Section 1(b), Rule 59 of the Rules of Civil Procedure
requires that the property or fund subject of the action is in danger of being lost, removed, or materially
injured, necessitating its protection or preservation. Its object is the prevention of imminent danger to the
property. If the action does not require such protection or preservation, the remedy is not receivership. 6
Here Fidela’s main gripe is that Evelina and Aida deprived her of her share of the land’s produce. She does
not claim that the land or its productive capacity would disappear or be wasted if not entrusted to a receiver.
Nor does Fidela claim that the land has been materially injured, necessitating its protection and preservation.
Because receivership is a harsh remedy that can be granted only in extreme situations, 7 Fidela must prove a
clear right to its issuance. But she has not. Indeed, in none of the other cases she filed against Evelina and
Aida has that remedy been granted her.8
Besides, the RTC dismissed Fidela’s action for lack of jurisdiction over the case, holding that the issues it
raised properly belong to the DARAB. The case before the CA is but an offshoot of that RTC case. Given
that the RTC has found that it had no jurisdiction over the case, it would seem more prudent for the CA to
first provisionally determine that the RTC had jurisdiction before granting receivership which is but an
incident of the main action.1 a vv p h i 1
WHEREFORE, the Court GRANTS the petition. The Resolutions dated April 12, 2006 and July 7, 2006 of
the Court of Appeals in CA-G.R. CV 85552, are REVERSED and SET ASIDE.
The receivership is LIFTED and the Court of Appeals is directed to resolve CA-G.R. CV 85552 with utmost
dispatch.
SO ORDERED.
THIRD DIVISION
G.R. No. 168332 June 19, 2009
ANA MARIA A. KORUGA, Petitioner,
vs.
TEODORO O. ARCENAS, JR., ALBERT C. AGUIRRE, CESAR S. PAGUIO, FRANCISCO A. RIVERA,
and THE HONORABLE COURT OF APPEALS, THIRD DIVISION, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 169053 June 19, 2009
TEODORO O. ARCENAS, JR., ALBERT C. AGUIRRE, CESAR S. PAGUIO, and FRANCISCO A.
RIVERA,Petitioners,
vs.
HON. SIXTO MARELLA, JR., Presiding Judge, Branch 138, Regional Trial Court of Makati City, and
ANA MARIA A. KORUGA, Respondents.
DECISION
NACHURA, J.:
Before this Court are two petitions that originated from a Complaint filed by Ana Maria A. Koruga (Koruga)
before the Regional Trial Court (RTC) of Makati City against the Board of Directors of Banco Filipino and
the Members of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) for violation of the
Corporation Code, for inspection of records of a corporation by a stockholder, for receivership, and for the
creation of a management committee.
G.R. No. 168332
The first is a Petition for Certiorari under Rule 65 of the Rules of Court, docketed as G.R. No. 168332,
praying for the annulment of the Court of Appeals (CA) Resolution 1 in CA-G.R. SP No. 88422 dated April
18, 2005 granting the prayer for a Writ of Preliminary Injunction of therein petitioners Teodoro O. Arcenas,
Jr., Albert C. Aguirre, Cesar S. Paguio, and Francisco A. Rivera (Arcenas, et al.).
Koruga is a minority stockholder of Banco Filipino Savings and Mortgage Bank. On August 20, 2003, she
filed a complaint before the Makati RTC which was raffled to Branch 138, presided over by Judge Sixto
Marella, Jr.2Koruga’s complaint alleged:
10. 1 Violation of Sections 31 to 34 of the Corporation Code ("Code") which prohibit self-dealing and
conflicts of interest of directors and officers, thus:
(a) For engaging in unsafe, unsound, and fraudulent banking practices that have jeopardized the
welfare of the Bank, its shareholders, who includes among others, the Petitioner, and depositors.
(sic)
(b) For granting and approving loans and/or "loaned" sums of money to six (6) "dummy" borrower
corporations ("Borrower Corporations") which, at the time of loan approval, had no financial
capacity to justify the loans. (sic)
(c) For approving and accepting a dacion en pago, or payment of loans with property instead of
cash, resulting to a diminished future cumulative interest income by the Bank and a decline in its
liquidity position. (sic)
(d) For knowingly giving "favorable treatment" to the Borrower Corporations in which some or
most of them have interests, i.e. interlocking directors/officers thereof, interlocking ownerships.
(sic)
(e) For employing their respective offices and functions as the Bank’s officers and directors, or
omitting to perform their functions and duties, with negligence, unfaithfulness or abuse of
confidence of fiduciary duty, misappropriated or misapplied or ratified by inaction the
misappropriation or misappropriations, of (sic) almost ₱1.6 Billion Pesos (sic) constituting the
Bank’s funds placed under their trust and administration, by unlawfully releasing loans to the
Borrower Corporations or refusing or failing to impugn these, knowing before the loans were
released or thereafter that the Bank’s cash resources would be dissipated thereby, to the prejudice
of the Petitioner, other Banco Filipino depositors, and the public.
10.2 Right of a stockholder to inspect the records of a corporation (including financial statements) under
Sections 74 and 75 of the Code, as implemented by the Interim Rules;
(a) Unlawful refusal to allow the Petitioner from inspecting or otherwise accessing the corporate records of
the bank despite repeated demand in writing, where she is a stockholder. (sic)
10.3 Receivership and Creation of a Management Committee pursuant to:
(a) Rule 59 of the 1997 Rules of Civil Procedure ("Rules");
(b) Section 5.2 of R.A. No. 8799;
(c) Rule 1, Section 1(a)(1) of the Interim Rules;
(d) Rule 1, Section 1(a)(2) of the Interim Rules;
(e) Rule 7 of the Interim Rules;
(f) Rule 9 of the Interim Rules; and
(g) The General Banking Law of 2000 and the New Central Bank Act.3
On September 12, 2003, Arcenas, et al. filed their Answer raising, among others, the trial court’s lack of
jurisdiction to take cognizance of the case. They also filed a Manifestation and Motion seeking the dismissal
84
of the case on the following grounds: (a) lack of jurisdiction over the subject matter; (b) lack of jurisdiction
over the persons of the defendants; (c) forum-shopping; and (d) for being a nuisance/harassment suit. They
then moved that the trial court rule on their affirmative defenses, dismiss the intra-corporate case, and set the
case for preliminary hearing.
In an Order dated October 18, 2004, the trial court denied the Manifestation and Motion, ruling thus:
The result of the procedure sought by defendants Arcenas, et al. (sic) is for the Court to conduct a
preliminary hearing on the affirmative defenses raised by them in their Answer. This [is] proscribed by the
Interim Rules of Procedure on Intracorporate (sic) Controversies because when a preliminary hearing is
conducted it is "as if a Motion to Dismiss was filed" (Rule 16, Section 6, 1997 Rules of Civil Procedure). A
Motion to Dismiss is a prohibited pleading under the Interim Rules, for which reason, no favorable
consideration can be given to the Manifestation and Motion of defendants, Arcenas, et al.
The Court finds no merit to (sic) the claim that the instant case is a nuisance or harassment suit.
WHEREFORE, the Court defers resolution of the affirmative defenses raised by the defendants Arcenas, et
al.4
Arcenas, et al. moved for reconsideration5 but, on January 18, 2005, the RTC denied the motion. 6 This
prompted Arcenas, et al. to file before the CA a Petition for Certiorari and Prohibition under Rule 65 of the
Rules of Court with a prayer for the issuance of a writ of preliminary injunction and a temporary retraining
order (TRO).7
On February 9, 2005, the CA issued a 60-day TRO enjoining Judge Marella from conducting further
proceedings in the case.8
On February 22, 2005, the RTC issued a Notice of Pre-trial9 setting the case for pre-trial on June 2 and 9,
2005. Arcenas, et al. filed a Manifestation and Motion10 before the CA, reiterating their application for a
writ of preliminary injunction. Thus, on April 18, 2005, the CA issued the assailed Resolution, which reads
in part:
(C)onsidering that the Temporary Restraining Order issued by this Court on February 9, 2005 expired on
April 10, 2005, it is necessary that a writ of preliminary injunction be issued in order not to render
ineffectual whatever final resolution this Court may render in this case, after the petitioners shall have
posted a bond in the amount of FIVE HUNDRED THOUSAND (₱500,000.00) PESOS.
SO ORDERED.11
Dissatisfied, Koruga filed this Petition for Certiorari under Rule 65 of the Rules of Court. Koruga alleged
that the CA effectively gave due course to Arcenas, et al.’s petition when it issued a writ of preliminary
injunction without factual or legal basis, either in the April 18, 2005 Resolution itself or in the records of the
case. She prayed that this Court restrain the CA from implementing the writ of preliminary injunction and,
after due proceedings, make the injunction against the assailed CA Resolution permanent. 12
In their Comment, Arcenas, et al. raised several procedural and substantive issues. They alleged that the
Verification and Certification against Forum-Shopping attached to the Petition was not executed in the
manner prescribed by Philippine law since, as admitted by Koruga’s counsel himself, the same was only a
facsimile.
They also averred that Koruga had admitted in the Petition that she never asked for reconsideration of the
CA’s April 18, 2005 Resolution, contending that the Petition did not raise pure questions of law as to
constitute an exception to the requirement of filing a Motion for Reconsideration before a Petition for
Certiorari is filed.
They, likewise, alleged that the Petition may have already been rendered moot and academic by the July 20,
2005 CA Decision,13 which denied their Petition, and held that the RTC did not commit grave abuse of
discretion in issuing the assailed orders, and thus ordered the RTC to proceed with the trial of the case.
Meanwhile, on March 13, 2006, this Court issued a Resolution granting the prayer for a TRO and enjoining
the Presiding Judge of Makati RTC, Branch 138, from proceeding with the hearing of the case upon the
filing by Arcenas, et al. of a ₱50,000.00 bond. Koruga filed a motion to lift the TRO, which this Court
denied on July 5, 2006.
On the other hand, respondents Dr. Conrado P. Banzon and Gen. Ramon Montaño also filed their Comment
on Koruga’s Petition, raising substantially the same arguments as Arcenas, et al.
G.R. No. 169053
G.R. No. 169053 is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, with prayer for
the issuance of a TRO and a writ of preliminary injunction filed by Arcenas, et al.
In their Petition, Arcenas, et al. asked the Court to set aside the Decision 14 dated July 20, 2005 of the CA in
CA-G.R. SP No. 88422, which denied their petition, having found no grave abuse of discretion on the part
of the Makati RTC. The CA said that the RTC Orders were interlocutory in nature and, thus, may be
assailed by certiorari or prohibition only when it is shown that the court acted without or in excess of
jurisdiction or with grave abuse of discretion. It added that the Supreme Court frowns upon resort to
remedial measures against interlocutory orders.
Arcenas, et al. anchored their prayer on the following grounds: that, in their Answer before the RTC, they
had raised the issue of failure of the court to acquire jurisdiction over them due to improper service of
summons; that the Koruga action is a nuisance or harassment suit; that there is another case involving the
same parties for the same cause pending before the Monetary Board of the BSP, and this constituted forum-
shopping; and that jurisdiction over the subject matter of the case is vested by law in the BSP. 15
Arcenas, et al. assign the following errors:
I. THE COURT OF APPEALS, IN "FINDING NO GRAVE ABUSE OF DISCRETION COMMITTED BY
PUBLIC RESPONDENT REGIONAL TRIAL COURT OF MAKATI, BRANCH 138, IN ISSUING THE
ASSAILED ORDERS," FAILED TO CONSIDER AND MERELY GLOSSED OVER THE MORE
TRANSCENDENT ISSUES OF THE LACK OF JURISDICTION ON THE PART OF SAID PUBLIC
RESPONDENT OVER THE SUBJECT MATTER OF THE CASE BEFORE IT, LITIS PENDENTIA AND
FORUM SHOPPING, AND THE CASE BELOW BEING A NUISANCE OR HARASSMENT SUIT,
EITHER ONE AND ALL OF WHICH GOES/GO TO RENDER THE ISSUANCE BY PUBLIC
RESPONDENT OF THE ASSAILED ORDERS A GRAVE ABUSE OF DISCRETION.
II. THE FINDING OF THE COURT OF APPEALS OF "NO GRAVE ABUSE OF DISCRETION
COMMITTED BY PUBLIC RESPONDENT REGIONAL TRIAL COURT OF MAKATI, BRANCH 138,
IN ISSUING THE ASSAILED ORDERS," IS NOT IN ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THIS HONORABLE COURT.16
Meanwhile, in a Manifestation and Motion filed on August 31, 2005, Koruga prayed for, among others, the
consolidation of her Petition with the Petition for Review on Certiorari under Rule 45 filed by Arcenas, et
al., docketed as G.R. No. 169053. The motion was granted by this Court in a Resolution dated September
26, 2005.
Our Ruling
Initially, we will discuss the procedural issue.
Arcenas, et al. argue that Koruga’s petition should be dismissed for its defective Verification and
Certification Against Forum-Shopping, since only a facsimile of the same was attached to the Petition. They
also claim that the Verification and Certification Against Forum-Shopping, allegedly executed in Seattle,
Washington, was not authenticated in the manner prescribed by Philippine law and not certified by the
Philippine Consulate in the United States.
This contention deserves scant consideration.
On the last page of the Petition in G.R. No. 168332, Koruga’s counsel executed an Undertaking, which
reads as follows:
In view of that fact that the Petitioner is currently in the United States, undersigned counsel is attaching a
facsimile copy of the Verification and Certification Against Forum-Shopping duly signed by the Petitioner
and notarized by Stephanie N. Goggin, a Notary Public for the Sate (sic) of Washington. Upon arrival of the
original copy of the Verification and Certification as certified by the Office of the Philippine Consul, the
undersigned counsel shall immediately provide duplicate copies thereof to the Honorable Court. 17
85
Thus, in a Compliance18 filed with the Court on September 5, 2005, petitioner submitted the original copy of
the duly notarized and authenticated Verification and Certification Against Forum-Shopping she had
executed.19 This Court noted and considered the Compliance satisfactory in its Resolution dated November
16, 2005. There is, therefore, no need to further belabor this issue.
We now discuss the substantive issues in this case.
First, we resolve the prayer to nullify the CA’s April 18, 2005 Resolution.
We hold that the Petition in G.R. No. 168332 has become moot and academic. The writ of preliminary
injunction being questioned had effectively been dissolved by the CA’s July 20, 2005 Decision. The
dispositive portion of the Decision reads in part:
The case is REMANDED to the court a quo for further proceedings and to resolve with deliberate dispatch
the intra-corporate controversies and determine whether there was actually a valid service of summons. If,
after hearing, such service is found to have been improper, then new summons should be served forthwith. 20
Accordingly, there is no necessity to restrain the implementation of the writ of preliminary injunction issued
by the CA on April 18, 2005, since it no longer exists.
However, this Court finds that the CA erred in upholding the jurisdiction of, and remanding the case to, the
RTC.
The resolution of these petitions rests mainly on the determination of one fundamental issue: Which body
has jurisdiction over the Koruga Complaint, the RTC or the BSP?
We hold that it is the BSP that has jurisdiction over the case.
A reexamination of the Complaint is in order.
Koruga’s Complaint charged defendants with violation of Sections 31 to 34 of the Corporation Code,
prohibiting self-dealing and conflict of interest of directors and officers; invoked her right to inspect the
corporation’s records under Sections 74 and 75 of the Corporation Code; and prayed for Receivership and
Creation of a Management Committee, pursuant to Rule 59 of the Rules of Civil Procedure, the Securities
Regulation Code, the Interim Rules of Procedure Governing Intra-Corporate Controversies, the General
Banking Law of 2000, and the New Central Bank Act. She accused the directors and officers of Banco
Filipino of engaging in unsafe, unsound, and fraudulent banking practices, more particularly, acts that
violate the prohibition on self-dealing.
It is clear that the acts complained of pertain to the conduct of Banco Filipino’s banking business. A bank, as
defined in the General Banking Law,21 refers to an entity engaged in the lending of funds obtained in the
form of deposits.22The banking business is properly subject to reasonable regulation under the police power
of the state because of its nature and relation to the fiscal affairs of the people and the revenues of the state.
Banks are affected with public interest because they receive funds from the general public in the form of
deposits. It is the Government’s responsibility to see to it that the financial interests of those who deal with
banks and banking institutions, as depositors or otherwise, are protected. In this country, that task is
delegated to the BSP, which pursuant to its Charter, is authorized to administer the monetary, banking, and
credit system of the Philippines. It is further authorized to take the necessary steps against any banking
institution if its continued operation would cause prejudice to its depositors, creditors and the general public
as well.23
The law vests in the BSP the supervision over operations and activities of banks. The New Central Bank Act
provides:
Section 25. Supervision and Examination. - The Bangko Sentral shall have supervision over, and conduct
periodic or special examinations of, banking institutions and quasi-banks, including their subsidiaries and
affiliates engaged in allied activities.24
Specifically, the BSP’s supervisory and regulatory powers include:
4.1 The issuance of rules of conduct or the establishment of standards of operation for uniform
application to all institutions or functions covered, taking into consideration the distinctive
character of the operations of institutions and the substantive similarities of specific functions to
which such rules, modes or standards are to be applied;
 4.2 The conduct of examination to determine compliance with laws and regulations if the
circumstances so warrant as determined by the Monetary Board;
4.3 Overseeing to ascertain that laws and Regulations are complied with;
4.4 Regular investigation which shall not be oftener than once a year from the last date of
examination to determine whether an institution is conducting its business on a safe or sound
basis: Provided, That the deficiencies/irregularities found by or discovered by an audit shall be
immediately addressed;
4.5 Inquiring into the solvency and liquidity of the institution (2-D); or
4.6 Enforcing prompt corrective action.25
Koruga alleges that "the dispute in the trial court involves the manner with which the Directors’ (sic) have
handled the Bank’s affairs, specifically the fraudulent loans and dacion en pago authorized by the Directors
in favor of several dummy corporations known to have close ties and are indirectly controlled by the
Directors."26 Her allegations, then, call for the examination of the allegedly questionable loans. Whether
these loans are covered by the prohibition on self-dealing is a matter for the BSP to determine. These are not
ordinary intra-corporate matters; rather, they involve banking activities which are, by law, regulated and
supervised by the BSP. As the Court has previously held:
It is well-settled in both law and jurisprudence that the Central Monetary Authority, through the Monetary
Board, is vested with exclusive authority to assess, evaluate and determine the condition of any bank, and
finding such condition to be one of insolvency, or that its continuance in business would involve a probable
loss to its depositors or creditors, forbid bank or non-bank financial institution to do business in the
Philippines; and shall designate an official of the BSP or other competent person as receiver to immediately
take charge of its assets and liabilities.27
Correlatively, the General Banking Law of 2000 specifically deals with loans contracted by bank directors
or officers, thus:
SECTION 36. Restriction on Bank Exposure to Directors, Officers, Stockholders and Their Related
Interests. — No director or officer of any bank shall, directly or indirectly, for himself or as the
representative or agent of others, borrow from such bank nor shall he become a guarantor, indorser or surety
for loans from such bank to others, or in any manner be an obligor or incur any contractual liability to the
bank except with the written approval of the majority of all the directors of the bank, excluding the director
concerned: Provided, That such written approval shall not be required for loans, other credit
accommodations and advances granted to officers under a fringe benefit plan approved by the Bangko
Sentral. The required approval shall be entered upon the records of the bank and a copy of such entry shall
be transmitted forthwith to the appropriate supervising and examining department of the Bangko Sentral.
Dealings of a bank with any of its directors, officers or stockholders and their related interests shall be upon
terms not less favorable to the bank than those offered to others.
After due notice to the board of directors of the bank, the office of any bank director or officer who violates
the provisions of this Section may be declared vacant and the director or officer shall be subject to the penal
provisions of the New Central Bank Act.
The Monetary Board may regulate the amount of loans, credit accommodations and guarantees that may be
extended, directly or indirectly, by a bank to its directors, officers, stockholders and their related interests, as
well as investments of such bank in enterprises owned or controlled by said directors, officers, stockholders
and their related interests. However, the outstanding loans, credit accommodations and guarantees which a
bank may extend to each of its stockholders, directors, or officers and their related interests, shall be limited
to an amount equivalent to their respective unencumbered deposits and book value of their paid-in capital
contribution in the bank: Provided, however, That loans, credit accommodations and guarantees secured by
assets considered as non-risk by the Monetary Board shall be excluded from such limit: Provided, further,
That loans, credit accommodations and advances to officers in the form of fringe benefits granted in
accordance with rules as may be prescribed by the Monetary Board shall not be subject to the individual
limit.
86
The Monetary Board shall define the term "related interests."
The limit on loans, credit accommodations and guarantees prescribed herein shall not apply to loans, credit
accommodations and guarantees extended by a cooperative bank to its cooperative shareholders. 28
Furthermore, the authority to determine whether a bank is conducting business in an unsafe or unsound
manner is also vested in the Monetary Board. The General Banking Law of 2000 provides:
SECTION 56. Conducting Business in an Unsafe or Unsound Manner. — In determining whether a
particular act or omission, which is not otherwise prohibited by any law, rule or regulation affecting banks,
quasi-banks or trust entities, may be deemed as conducting business in an unsafe or unsound manner for
purposes of this Section, the Monetary Board shall consider any of the following circumstances:
56.1. The act or omission has resulted or may result in material loss or damage, or abnormal risk or danger
to the safety, stability, liquidity or solvency of the institution;
56.2. The act or omission has resulted or may result in material loss or damage or abnormal risk to the
institution's depositors, creditors, investors, stockholders or to the Bangko Sentral or to the public in general;
56.3. The act or omission has caused any undue injury, or has given any unwarranted benefits, advantage or
preference to the bank or any party in the discharge by the director or officer of his duties and
responsibilities through manifest partiality, evident bad faith or gross inexcusable negligence; or
56.4. The act or omission involves entering into any contract or transaction manifestly and grossly
disadvantageous to the bank, quasi-bank or trust entity, whether or not the director or officer profited or will
profit thereby.
Whenever a bank, quasi-bank or trust entity persists in conducting its business in an unsafe or unsound
manner, the Monetary Board may, without prejudice to the administrative sanctions provided in Section 37
of the New Central Bank Act, take action under Section 30 of the same Act and/or immediately exclude the
erring bank from clearing, the provisions of law to the contrary notwithstanding.
Finally, the New Central Bank Act grants the Monetary Board the power to impose administrative sanctions
on the erring bank:
Section 37. Administrative Sanctions on Banks and Quasi-banks. - Without prejudice to the criminal
sanctions against the culpable persons provided in Sections 34, 35, and 36 of this Act, the Monetary Board
may, at its discretion, impose upon any bank or quasi-bank, their directors and/or officers, for any willful
violation of its charter or by-laws, willful delay in the submission of reports or publications thereof as
required by law, rules and regulations; any refusal to permit examination into the affairs of the institution;
any willful making of a false or misleading statement to the Board or the appropriate supervising and
examining department or its examiners; any willful failure or refusal to comply with, or violation of, any
banking law or any order, instruction or regulation issued by the Monetary Board, or any order, instruction
or ruling by the Governor; or any commission of irregularities, and/or conducting business in an unsafe or
unsound manner as may be determined by the Monetary Board, the following administrative sanctions,
whenever applicable:
(a) fines in amounts as may be determined by the Monetary Board to be appropriate, but in no case
to exceed Thirty thousand pesos (₱30,000) a day for each violation, taking into consideration the
attendant circumstances, such as the nature and gravity of the violation or irregularity and the size
of the bank or quasi-bank;
(b) suspension of rediscounting privileges or access to Bangko Sentral credit facilities;
(c) suspension of lending or foreign exchange operations or authority to accept new deposits or
make new investments;
(d) suspension of interbank clearing privileges; and/or
(e) revocation of quasi-banking license.
Resignation or termination from office shall not exempt such director or officer from administrative or
criminal sanctions.
The Monetary Board may, whenever warranted by circumstances, preventively suspend any director or
officer of a bank or quasi-bank pending an investigation: Provided, That should the case be not finally
decided by the Bangko Sentral within a period of one hundred twenty (120) days after the date of
suspension, said director or officer shall be reinstated in his position: Provided, further, That when the delay
in the disposition of the case is due to the fault, negligence or petition of the director or officer, the period of
delay shall not be counted in computing the period of suspension herein provided.
The above administrative sanctions need not be applied in the order of their severity.
Whether or not there is an administrative proceeding, if the institution and/or the directors and/or officers
concerned continue with or otherwise persist in the commission of the indicated practice or violation, the
Monetary Board may issue an order requiring the institution and/or the directors and/or officers concerned to
cease and desist from the indicated practice or violation, and may further order that immediate action be
taken to correct the conditions resulting from such practice or violation. The cease and desist order shall be
immediately effective upon service on the respondents.
The respondents shall be afforded an opportunity to defend their action in a hearing before the Monetary
Board or any committee chaired by any Monetary Board member created for the purpose, upon request
made by the respondents within five (5) days from their receipt of the order. If no such hearing is requested
within said period, the order shall be final. If a hearing is conducted, all issues shall be determined on the
basis of records, after which the Monetary Board may either reconsider or make final its order.
The Governor is hereby authorized, at his discretion, to impose upon banking institutions, for any failure to
comply with the requirements of law, Monetary Board regulations and policies, and/or instructions issued by
the Monetary Board or by the Governor, fines not in excess of Ten thousand pesos (₱10,000) a day for each
violation, the imposition of which shall be final and executory until reversed, modified or lifted by the
Monetary Board on appeal.29
Koruga also accused Arcenas, et al. of violation of the Corporation Code’s provisions on self-dealing and
conflict of interest. She invoked Section 31 of the Corporation Code, which defines the liability of directors,
trustees, or officers of a corporation for, among others, acquiring any personal or pecuniary interest in
conflict with their duty as directors or trustees, and Section 32, which prescribes the conditions under which
a contract of the corporation with one or more of its directors or trustees – the so-called "self-dealing
directors"30 – would be valid. She also alleged that Banco Filipino’s directors violated Sections 33 and 34 in
approving the loans of corporations with interlocking ownerships, i.e., owned, directed, or managed by close
associates of Albert C. Aguirre.
Sections 31 to 34 of the Corporation Code provide:
Section 31. Liability of directors, trustees or officers. - Directors or trustees who wilfully and knowingly
vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad
faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with
their duty as such directors or trustees shall be liable jointly and severally for all damages resulting
therefrom suffered by the corporation, its stockholders or members and other persons.
When a director, trustee or officer attempts to acquire or acquires, in violation of his duty, any interest
adverse to the corporation in respect of any matter which has been reposed in him in confidence, as to which
equity imposes a disability upon him to deal in his own behalf, he shall be liable as a trustee for the
corporation and must account for the profits which otherwise would have accrued to the corporation.
Section 32. Dealings of directors, trustees or officers with the corporation. - A contract of the corporation
with one or more of its directors or trustees or officers is voidable, at the option of such corporation, unless
all the following conditions are present:
1. That the presence of such director or trustee in the board meeting in which the contract was
approved was not necessary to constitute a quorum for such meeting;
2. That the vote of such director or trustee was not necessary for the approval of the contract;
3. That the contract is fair and reasonable under the circumstances; and
4. That in case of an officer, the contract has been previously authorized by the board of directors.
Where any of the first two conditions set forth in the preceding paragraph is absent, in the case of a contract
with a director or trustee, such contract may be ratified by the vote of the stockholders representing at least
87
two-thirds (2/3) of the outstanding capital stock or of at least two-thirds (2/3) of the members in a meeting
called for the purpose: Provided, That full disclosure of the adverse interest of the directors or trustees
involved is made at such meeting: Provided, however, That the contract is fair and reasonable under the
circumstances.
Section 33. Contracts between corporations with interlocking directors. - Except in cases of fraud, and
provided the contract is fair and reasonable under the circumstances, a contract between two or more
corporations having interlocking directors shall not be invalidated on that ground alone: Provided, That if
the interest of the interlocking director in one corporation is substantial and his interest in the other
corporation or corporations is merely nominal, he shall be subject to the provisions of the preceding section
insofar as the latter corporation or corporations are concerned.
Stockholdings exceeding twenty (20%) percent of the outstanding capital stock shall be considered
substantial for purposes of interlocking directors.
Section 34. Disloyalty of a director. - Where a director, by virtue of his office, acquires for himself a
business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of
such corporation, he must account to the latter for all such profits by refunding the same, unless his act has
been ratified by a vote of the stockholders owning or representing at least two-thirds (2/3) of the outstanding
capital stock. This provision shall be applicable, notwithstanding the fact that the director risked his own
funds in the venture.
Koruga’s invocation of the provisions of the Corporation Code is misplaced. In an earlier case with similar
antecedents, we ruled that:
The Corporation Code, however, is a general law applying to all types of corporations, while the New
Central Bank Act regulates specifically banks and other financial institutions, including the dissolution and
liquidation thereof. As between a general and special law, the latter shall prevail – generalia specialibus non
derogant.31
Consequently, it is not the Interim Rules of Procedure on Intra-Corporate Controversies,32 or Rule 59 of the
Rules of Civil Procedure on Receivership, that would apply to this case. Instead, Sections 29 and 30 of the
New Central Bank Act should be followed, viz.:
Section 29. Appointment of Conservator. - Whenever, on the basis of a report submitted by the appropriate
supervising or examining department, the Monetary Board finds that a bank or a quasi-bank is in a state of
continuing inability or unwillingness to maintain a condition of liquidity deemed adequate to protect the
interest of depositors and creditors, the Monetary Board may appoint a conservator with such powers as the
Monetary Board shall deem necessary to take charge of the assets, liabilities, and the management thereof,
reorganize the management, collect all monies and debts due said institution, and exercise all powers
necessary to restore its viability. The conservator shall report and be responsible to the Monetary Board and
shall have the power to overrule or revoke the actions of the previous management and board of directors of
the bank or quasi-bank.
xxxx
The Monetary Board shall terminate the conservatorship when it is satisfied that the institution can continue
to operate on its own and the conservatorship is no longer necessary. The conservatorship shall likewise be
terminated should the Monetary Board, on the basis of the report of the conservator or of its own findings,
determine that the continuance in business of the institution would involve probable loss to its depositors or
creditors, in which case the provisions of Section 30 shall apply.
Section 30. Proceedings in Receivership and Liquidation. - Whenever, upon report of the head of the
supervising or examining department, the Monetary Board finds that a bank or quasi-bank:
(a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided,
That this shall not include inability to pay caused by extraordinary demands induced by financial
panic in the banking community;
(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or
(c) cannot continue in business without involving probable losses to its depositors or creditors; or
 (d) has willfully violated a cease and desist order under Section 37 that has become final, involving dealings. On July 24, 2003, the Monetary Board passed Resolution No. 1034 furnishing Banco Filipino a
acts or transactions which amount to fraud or a dissipation of the assets of the institution; in which copy of the ROE with instructions for the bank to file its comment or explanation within 30 to 90 days under
cases, the Monetary Board may summarily and without need for prior hearing forbid the institution threat of being fined or of being subjected to other remedial actions. The ROE, the BSP said, covers
from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation substantially the same matters raised in Koruga’s complaint. At the time of the filing of Koruga’s complaint
as receiver of the banking institution. on August 20, 2003, the period for Banco Filipino to submit its explanation had not yet expired. 38
xxxx Thus, the court’s jurisdiction could only have been invoked after the Monetary Board had taken action on
The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final and the matter and only on the ground that the action taken was in excess of jurisdiction or with such grave
executory, and may not be restrained or set aside by the court except on petition for certiorari on the ground abuse of discretion as to amount to lack or excess of jurisdiction.
that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack Finally, there is one other reason why Koruga’s complaint before the RTC cannot prosper. Given her own
or excess of jurisdiction. The petition for certiorari may only be filed by the stockholders of record admission – and the same is likewise supported by evidence – that she is merely a minority stockholder of
representing the majority of the capital stock within ten (10) days from receipt by the board of directors of Banco Filipino, she would not have the standing to question the Monetary Board’s action. Section 30 of the
the institution of the order directing receivership, liquidation or conservatorship. New Central Bank Act provides:
The designation of a conservator under Section 29 of this Act or the appointment of a receiver under this The petition for certiorari may only be filed by the stockholders of record representing the majority of the
section shall be vested exclusively with the Monetary Board. Furthermore, the designation of a conservator capital stock within ten (10) days from receipt by the board of directors of the institution of the order
is not a precondition to the designation of a receiver.33 directing receivership, liquidation or conservatorship.
On the strength of these provisions, it is the Monetary Board that exercises exclusive jurisdiction over All the foregoing discussion yields the inevitable conclusion that the CA erred in upholding the jurisdiction
proceedings for receivership of banks. of, and remanding the case to, the RTC. Given that the RTC does not have jurisdiction over the subject
Crystal clear in Section 30 is the provision that says the "appointment of a receiver under this section shall matter of the case, its refusal to dismiss the case on that ground amounted to grave abuse of discretion.
be vested exclusively with the Monetary Board." The term "exclusively" connotes that only the Monetary WHEREFORE, the foregoing premises considered, the Petition in G.R. No. 168332 is DISMISSED, while
Board can resolve the issue of whether a bank is to be placed under receivership and, upon an affirmative the Petition in G.R. No. 169053 is GRANTED. The Decision of the Court of Appeals dated July 20, 2005 in
finding, it also has authority to appoint a receiver. This is further affirmed by the fact that the law allows the CA-G.R. SP No. 88422 is hereby SET ASIDE. The Temporary Restraining Order issued by this Court on
Monetary Board to take action "summarily and without need for prior hearing." March 13, 2006 is made PERMANENT. Consequently, Civil Case No. 03-985, pending before the Regional
And, as a clincher, the law explicitly provides that "actions of the Monetary Board taken under this section Trial Court of Makati City, is DISMISSED.
or under Section 29 of this Act shall be final and executory, and may not be restrained or set aside by the SO ORDERED.
court except on a petition for certiorari on the ground that the action taken was in excess of jurisdiction or
with such grave abuse of discretion as to amount to lack or excess of jurisdiction."1avvphi1
From the foregoing disquisition, there is no doubt that the RTC has no jurisdiction to hear and decide a suit
that seeks to place Banco Filipino under receivership.
Koruga herself recognizes the BSP’s power over the allegedly unlawful acts of Banco Filipino’s directors.
The records of this case bear out that Koruga, through her legal counsel, wrote the Monetary Board 34 on
April 21, 2003 to bring to its attention the acts she had enumerated in her complaint before the RTC. The
letter reads in part:
Banco Filipino and the current members of its Board of Directors should be placed under investigation for
violations of banking laws, the commission of irregularities, and for conducting business in an unsafe or
unsound manner. They should likewise be placed under preventive suspension by virtue of the powers
granted to the Monetary Board under Section 37 of the Central Bank Act. These blatant violations of
banking laws should not go by without penalty. They have put Banco Filipino, its depositors and
stockholders, and the entire banking system (sic) in jeopardy.
xxxx
We urge you to look into the matter in your capacity as regulators. Our clients, a minority stockholders, (sic)
and many depositors of Banco Filipino are prejudiced by a failure to regulate, and taxpayers are prejudiced
by accommodations granted by the BSP to Banco Filipino 35
In a letter dated May 6, 2003, BSP Supervision and Examination Department III Director Candon B.
Guerrero referred Koruga’s letter to Arcenas for comment.36 On June 6, 2003, Banco Filipino’s then
Executive Vice President and Corporate Secretary Francisco A. Rivera submitted the bank’s comments
essentially arguing that Koruga’s accusations lacked legal and factual bases.37
On the other hand, the BSP, in its Answer before the RTC, said that it had been looking into Banco
Filipino’s activities. An October 2002 Report of Examination (ROE) prepared by the Supervision and
Examination Department (SED) noted certain dacion payments, out-of-the-ordinary expenses, among other

88
 FIRST DIVISION
G.R. No. 111080 April 5, 2000
JOSE S. OROSA and MARTHA P. OROSA, petitioners,
vs.
HON. COURT OF APPEALS and FCP CREDIT CORPORATION, respondents.
YNARES-SANTIAGO, J.:
On December 6, 1984, private respondent FCP Credit Corporation filed a complaint for replevin and
damages 1 in the Regional Trial Court of Manila against petitioner Jose S. Orosa and one John Doe to
recover possession of a 1983 Ford Laser 1.5 Sedan with Motor and Serial No. SUNKBT-14584. The
complaint alleged that on September 28, 1983, petitioner purchased the subject motor vehicle on installment
from Fiesta Motor Sales Corporation. He executed and delivered to Fiesta Motor Sales Corp. a promissory
note in the sum of P133,824.00 payable in monthly installments. 2 To secure payment, petitioner executed a
chattel mortgage over the subject motor vehicle in favor of Fiesta Motor Sales Corp. On September 28,
1983, Fiesta Motor Sales assigned the promissory note and chattel mortgage to private respondent FCP
Credit Corporation. The complaint further alleged that petitioner failed to pay part of the installment which
fell due on July 28, 1984 as well as three (3) consecutive installment which fell due on August 28,
September 28, and October 28, 1984. Consequently, private respondent FCP Credit Corporation demanded
from petitioner payment of the entire outstanding balance of the obligation amounting to P106,154.48 with
accrued interest and to surrender the vehicle which petitioner was allegedly detaining.
After trial, the lower court dismissed private respondent's complaint in a Decision dated March 25, 1988, the
decretal portion of which reads:
WHEREFORE, judgment is rendered for the defendant, and against the plaintiff:
1) Dismissing the complaint for lack of merit;
2) Declaring that the plaintiff was not entitled to the Writ of Replevin, issued on January 7, 1985,
and is now liable to the defendant for actual damages under the Replevin bond it filed;
3) On defendant's counter-claim, ordering the plaintiff to pay the defendant the sum of
P400,000.00 as moral damages, P100,000.00 as exemplary damages, and P50,000.00 as, and for,
attorney's fees;
4) Ordering the plaintiff to return to the defendant the subject 1983 Ford Laser Sedan, with Motor
or Serial No. SUNKBT-14584, or its equivalent, in kind or value, in cash, as of this date, and to
pay the costs.
SO ORDERED.
The trial court ruled that private respondent FCP had no reason to file the present action since petitioner
already paid the installments for the months of July to November 1984, which are the sole bases of the
complaint. The lower court declared that private respondent was not entitled to the writ of replevin, and was
liable to petitioner for actual damages under the replevin bond it filed. 3
Ruling on petitioner's counterclaim, the trial court stated that there was no legal or factual basis for the writ
of replevin and that its enforcement by the sheriff was "highly irregular, and unlawful, done, as it was, under
shades of extortion, threats and force." 4 The trial court ordered private respondent to pay the sum of
P400,000.00 as moral damages; P100,000.00 as exemplary damages and P50,000.00 as attorney's fees.
Private respondent was also ordered to return to petitioner the 1983 Ford Laser 1.5 Sedan, or its equivalent,
in kind or value in cash, as of date of judgment and to pay the costs of the suit. 5
On June 7, 1988, a "Supplemental Decision" was rendered by the trial court ordering private respondent's
surety, Stronghold Insurance Co., Inc. to jointly and severally [with private respondent] return to petitioner
89
the 1983 Ford Laser 1.5 Sedan or its, equivalent in kind or in cash and to pay the damages specified in the
main decision to the extent of the value of the replevin bond in the amount of P210,000.00. 6
The surety company filed with the Court of Appeals a petition for certiorari to annul the Order of the trial
court denying its motion for partial reconsideration, as well as the Supplemental Decision. On the other
hand, private respondent appealed the decision of the RTC Manila to the Court of Appeals.
The surety company's petition for certiorari, docketed as CA-G.R. SP No. 14938, was dismissed by the
Court of Appeals' First Division which upheld the trial court's order of execution pending appeal. 7 On
November 6, 1989, this Court affirmed the Court of Appeals decision, but deleted the order for the issuance
of a writ of execution pending appeal. 8
Meanwhile, in private respondent's appeal, the Court of Appeals' Eighth Division partially affirmed the
ruling of the trial court, in a Decision dated April 19, 1993, the dispositive portion of which reads: 9
WHEREFORE, the Decision of 25 March 1988 of the Regional Trial Court, Branch 3, Manila is
hereby AFFIRMED with the following modifications:
(1) The award of moral damages, exemplary damages and attorney's fees is DELETED;
(2) The order directing plaintiff-appellant FCP Credit Corporation to return to defendant-
appellee Jose S. Orosa the subject 1983 Ford Laser Sedan, with Motor and Serial No.
SUNKBT-14584, its equivalent, in kind or value in cash, as of 25 March 1988, and to pay
the costs is DELETED; and;
(3) Plaintiff-appellant FCP Credit Corporation is ordered to pay defendant-appellee Jose
S. Orosa the amount equivalent to the value of the fourteen (14) monthly installments
made by the latter to the former on the subject motor vehicle, with interest from the time
of filing of the complaint or from 6 December 1984.
No costs.
SO ORDERED.
Hence, this petition for review, on the following assignments of error: 10
(1) The Hon. Court of Appeals (former Eighth Division) acted without or in excess of jurisdiction
when reversed a final decision dated September 9, 1988, of a co-equal division of the Hon. Court
of Appeals (Special First Division) promulgated in CA. G.R. No. 14938, and which was sustained
by the Hon. Supreme Court in a final decision promulgated in G.R. No. 84979 dated November 6,
1989 which cases have the same causes of actions, same set of facts, the same parties and the same
relief.
(2) The Hon. Court of Appeals (former Eighth Division) acted with grave abuse of discretion and
authority when it considered causes of actions not alleged in the complaint and which were raised
for the first time on appeal in deciding this case.
(3) The Hon. Court of Appeals (former Eighth Division) committed serious error in applying the
cause of Filinvest Credit Corporation vs. Ivans Mendez, 152 SCRA 598, as basis in deciding this
case when said case has a different set of facts from this case.
In its first assignment of error, petitioner alleges that the Eighth Division of the Court of Appeals had no
jurisdiction to review the present case since the First Division of the Court of Appeals already passed upon
the law and the facts of the same. Petitioner alleges that the present appeal involves the same causes of
action, same parties, same facts and same relief involved in the decision rendered by the First Division and
affirmed by this Court in G.R. No. 84979. 11
Petitioner's argument is untenable. Jurisdiction is simply the power or authority to hear a case. The appellate
jurisdiction of the Court of Appeals to review decisions and orders of lower courts is conferred by Batas
Pambansa Blg. 129. More importantly, petitioner cannot now assail the Court of Appeals' jurisdiction after
having actively participated in the appeal and after praying for affirmative relief. 12
Neither can petitioner argue that res judicata bars the determination of the present case. The two cases
involve different subject matters, parties and seek different reliefs.
The petition docketed as CA-G.R. SP No. 14938 was for certiorari with injunction, brought by Stronghold
Insurance Company, Inc. alleging that there was grave abuse of discretion when the trial court adjudged it
liable for damages without due process, in violation of Rule 60, Section 10 in relation to Rule 57, Section
20, of the Rules of Court. The surety also questioned the propriety of the writ of execution issued by the trial
court pending appeal. 13
On the other hand, CA-G.R. CV No. 25929 was filed by petitioner Orosa under Rule 45 of the Revised
Rules of Court raising alleged errors of law on the part of the trial court. The subject of the appeal was the
main decision, while the subject of the petition in CA-G.R. SP No. 14938 was the Supplemental Decision.
We agree with the Court of Appeals that: 14
The decisions of the Court of Appeals in CA-G.R. SP No. 14938 and the Supreme Court in G.R.
No. 84979 did not pass on the merits of this case. It merely ruled on the issues of whether the
surety, Stronghold Insurance, Co., Inc., can be held jointly and solidarily liable with plaintiff-
appellant and whether execution pending appeal is proper under the facts and circumstances of
this case. Consequently, this Court is not estopped from reviewing the conclusions reached by the
court a quo. (emphasis ours)
In its second assigned error, petitioner posits that the Court of Appeals committed grave abuse of discretion
when it considered causes of actions which were raised for the first time on appeal. 15
True, private respondent submitted issues to the Court of Appeals which were not raised in the original
complaint. Private respondent belatedly pointed out that: 16
1.1. It is pertinent to note that Defendant-Appellee has waived prior notice and demand in order to
be rendered in default, as in fact the Promissory Note expressly stipulates that the monthly
installments shall be paid on the date they fall due, without need of prior notice or demand.
1.2. Said Promissory Note likewise expressly stipulates that a late payment charge of 2% per
month shall be added on each unpaid installment from maturity thereof until fully paid.
1.3. Of equal significance is the Acceleration Clause in the Promissory Note which states that if
default be made in the payment of any of the installments or late payment charges thereon when
the same became due and payable, the total principle sum then remaining unpaid, together with the
agreed late payment charges thereon, shall at once become due and payable.
Private respondent argued that based on the provisions of the Promissory Note itself, petitioner incurred in
default since, even though there was actual payment of the installments which fell due on July 28, 1984, as
well as the three installments on August 28 to October 28, 1984, the payments were all late and
irregular. 17 Private respondent also argued that petitioner assigned the subject car to his daughter without
the written consent of the obligee, and hence, violated the terms of the chattel mortgage. 18 Meritorious as
these arguments are, they come too late in the day. Basic is the rule that matters not raised in the complaint
cannot be raised for the first time on appeal.
Contrary to petitioner's accusation, the Court of Appeals restricted the determination of the case to matters
alleged in the complaint and raised during trial. 19 Citing jurisprudence, 20 the Court of Appeals held that "it
would be offensive to the basic rule of fair play, justice and due process" if it considered issues raised for the
first time on appeal. 21
The Court of Appeals' statement that "under the terms and conditions of the chattel mortgage, defendant-
appellee Jose S. Orosa was already in default," was made only to justify the deletion of the trial court's
award of moral, exemplary damages and attorney's fees, in consonance with its finding that private
respondent was motivated by a sincere belief that it had sufficient basis and acted in good faith when it filed
the claim. 22
We now come to the matter of moral damages. Petitioner insists that he suffered untold embarrassment
when the complaint was filed against him. According to petitioner, the car subject of this case was being
used by his daughter, married to Jose Concepcion III, a scion of a prominent family. Petitioner laments that
he assigned the car to his daughter so that she could "approximate without equaling the status of her in-
laws." This being the case, petitioner experienced anguish and unquantifiable humiliation when he had to
90
face his daughter's wealthy in-laws to explain the "why and the whats of the subject case." Petitioner further
insists that an award of moral damages is especially justified since he is no ordinary man, but a businessman
of high social standing, a graduate of De La Salle University and belongs to a well known family of
bankers. 23
We must deny the claim. The law clearly states that one may only recover moral damages if they are the
proximate result of the, other party's wrongful act or omission. 24 Two elements are required. First, the act or
omission must be the proximate result of the physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. Second, the act
must be wrongful.
Petitioner maintains that embarrassment resulted when he had to explain the suit to his daughter's in-
laws.1a\^/phi1However, that could have been avoided had he not assigned the car to his daughter and had he
been faithful and prompt in paying the installments required. Petitioner brought the situation upon himself
and cannot now complain that private respondent is liable for the mental anguish and humiliation he
suffered.
Furthermore, we agree with the appellate court that when private respondent brought the complaint, it did so
only to exercise a legal right, believing that it had a meritorious cause of action clearly borne out by a mere
perusal of the promissory note and chattel mortgage. To constitute malicious prosecution, there must be
proof that the prosecution was prompted by a sinister design to vex and humiliate a person, and that it was
initiated deliberately, knowing that the charges were false and groundless. 25 Such was not the case when the
instant complaint was filed. The rule has always been that moral damages cannot be recovered from a
person who has filed a complaint against another in good faith. 26 The law always presumes good faith such
that any person who seeks to be awarded damages due to acts of another has the burden of proving that the
latter acted in bad faith or with ill motive. 27
Anent the award of exemplary damages, jurisprudence provides that where a party is not entitled to actual or
moral damages, an award of exemplary damages is likewise baseless. 28
In the matter of attorney's fees, petitioner avers that to prosecute and defend this case in the lower court and
in the appellate court, he incurred expenses amounting to P50,000.00, 29 and as such, attorney's fees should
be granted. We deny the claim. No premium should be placed on the right to litigate and not every winning
party is entitled to an automatic grant of attorney's fees. 30 The party must show that he falls under one of the
instances enumerated in Article 2208 of the Civil Code. 31 This, petitioner failed to do. Furthermore, where
the award of moral and exemplary damages is eliminated, so must the award for attorney's fees be deleted. 32
We also agree with the Court of Appeals that the trial court erred when it ordered private respondent to
return the subject car or its equivalent considering that petitioner had not yet fully paid the purchase price.
Verily, to sustain the trial court's decision would amount to unjust enrichment. The Court of Appeals was
correct when it instead ordered private respondent to return, not the car itself, but only the amount
equivalent to the fourteen installments actually paid with interest. 33
WHEREFORE, above premises considered, the petition is DENIED, and the Court of Appeals' Decision of
April 19, 1993 and its Resolution of July 22, 1993 are AFFIRMED in toto.
No costs.1âwphi1.nêt
SO ORDERED.
 THIRD DIVISION
G.R. No. 148132 January 28, 2008
SMART COMMUNICATIONS, INC., petitioner,
vs.
REGINA M. ASTORGA, respondent.
x---------------------------------------------------x
G.R. No. 151079 January 28, 2008
SMART COMMUNICATIONS, INC., petitioner,
vs.
REGINA M. ASTORGA, respondent.
x---------------------------------------------------x
G.R. No. 151372 January 28, 2008
REGINA M. ASTORGA, petitioner,
vs.
SMART COMMUNICATIONS, INC. and ANN MARGARET V. SANTIAGO, respondents.
DECISION
NACHURA, J.:
For the resolution of the Court are three consolidated petitions for review on certiorari under Rule 45 of the
Rules of Court. G.R. No. 148132 assails the February 28, 2000 Decision1 and the May 7, 2001
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP. No. 53831. G.R. Nos. 151079 and 151372
question the June 11, 2001 Decision3 and the December 18, 2001 Resolution4 in CA-G.R. SP. No. 57065.
Regina M. Astorga (Astorga) was employed by respondent Smart Communications, Incorporated (SMART)
on May 8, 1997 as District Sales Manager of the Corporate Sales Marketing Group/ Fixed Services Division
(CSMG/FSD). She was receiving a monthly salary of P33,650.00. As District Sales Manager, Astorga
enjoyed additional benefits, namely, annual performance incentive equivalent to 30% of her annual gross
salary, a group life and hospitalization insurance coverage, and a car plan in the amount of P455,000.00.5
In February 1998, SMART launched an organizational realignment to achieve more efficient operations.
This was made known to the employees on February 27, 1998. 6 Part of the reorganization was the
outsourcing of the marketing and sales force. Thus, SMART entered into a joint venture agreement with
NTT of Japan, and formed SMART-NTT Multimedia, Incorporated (SNMI). Since SNMI was formed to do
the sales and marketing work, SMART abolished the CSMG/FSD, Astorga’s division.
To soften the blow of the realignment, SNMI agreed to absorb the CSMG personnel who would be
recommended by SMART. SMART then conducted a performance evaluation of CSMG personnel and
those who garnered the highest ratings were favorably recommended to SNMI. Astorga landed last in the
performance evaluation, thus, she was not recommended by SMART. SMART, nonetheless, offered her a
supervisory position in the Customer Care Department, but she refused the offer because the position carried
lower salary rank and rate.
Despite the abolition of the CSMG/FSD, Astorga continued reporting for work. But on March 3, 1998,
SMART issued a memorandum advising Astorga of the termination of her employment on ground of
redundancy, effective April 3, 1998. Astorga received it on March 16, 1998.7
The termination of her employment prompted Astorga to file a Complaint 8 for illegal dismissal, non-
payment of salaries and other benefits with prayer for moral and exemplary damages against SMART and
Ann Margaret V. Santiago (Santiago). She claimed that abolishing CSMG and, consequently, terminating
her employment was illegal for it violated her right to security of tenure. She also posited that it was illegal
for an employer, like SMART, to contract out services which will displace the employees, especially if the
contractor is an in-house agency.9
SMART responded that there was valid termination. It argued that Astorga was dismissed by reason of
redundancy, which is an authorized cause for termination of employment, and the dismissal was effected in
accordance with the requirements of the Labor Code. The redundancy of Astorga’s position was the result of
91
the abolition of CSMG and the creation of a specialized and more technically equipped SNMI, which is a
valid and legitimate exercise of management prerogative.10
In the meantime, on May 18, 1998, SMART sent a letter to Astorga demanding that she pay the current
market value of the Honda Civic Sedan which was given to her under the company’s car plan program, or to
surrender the same to the company for proper disposition. 11 Astorga, however, failed and refused to do
either, thus prompting SMART to file a suit for replevin with the Regional Trial Court of Makati (RTC) on
August 10, 1998. The case was docketed as Civil Case No. 98-1936 and was raffled to Branch 57.12
Astorga moved to dismiss the complaint on grounds of (i) lack of jurisdiction; (ii) failure to state a cause of
action; (iii) litis pendentia; and (iv) forum-shopping. Astorga posited that the regular courts have no
jurisdiction over the complaint because the subject thereof pertains to a benefit arising from an employment
contract; hence, jurisdiction over the same is vested in the labor tribunal and not in regular courts. 13
Pending resolution of Astorga’s motion to dismiss the replevin case, the Labor Arbiter rendered a
Decision14 dated August 20, 1998, declaring Astorga’s dismissal from employment illegal. While
recognizing SMART’s right to abolish any of its departments, the Labor Arbiter held that such right should
be exercised in good faith and for causes beyond its control. The Arbiter found the abolition of CSMG done
neither in good faith nor for causes beyond the control of SMART, but a ploy to terminate Astorga’s
employment. The Arbiter also ruled that contracting out the functions performed by Astorga to an in-house
agency like SNMI was illegal, citing Section 7(e), Rule VIII-A of the Rules Implementing the Labor Code.
Accordingly, the Labor Arbiter ordered:
WHEREFORE, judgment is hereby rendered declaring the dismissal of [Astorga] to be illegal and
unjust. [SMART and Santiago] are hereby ordered to:
1. Reinstate [Astorga] to [her] former position or to a substantially equivalent position, without
loss of seniority rights and other privileges, with full backwages, inclusive of allowances and other
benefits from the time of [her] dismissal to the date of reinstatement, which computed as of this
date, are as follows:
(a) Astorga
BACKWAGES; (P33,650.00 x 4 months) = P134,600.00
UNPAID SALARIES (February 15, 1998-April 3, 1998
February 15-28, 1998 = P 16,823.00
March 1-31, [1998] = P 33,650.00
April 1-3, 1998 = P 3,882.69
CAR MAINTENANCE ALLOWANCE = P 8,000.00
(P2,000.00 x 4)
FUEL ALLOWANCE = P 14,457.83
(300 liters/mo. x 4 mos. at P12.04/liter)
TOTAL = P211,415.52
xxxx
3. Jointly and severally pay moral damages in the amount of P500,000.00 x x x and exemplary
damages in the amount of P300,000.00. x x x
4. Jointly and severally pay 10% of the amount due as attorney’s fees.
SO ORDERED.15
Subsequently, on March 29, 1999, the RTC issued an Order 16 denying Astorga’s motion to dismiss the
replevin case. In so ruling, the RTC ratiocinated that:
Assessing the [submission] of the parties, the Court finds no merit in the motion to dismiss.
 As correctly pointed out, this case is to enforce a right of possession over a company car assigned
to the defendant under a car plan privilege arrangement. The car is registered in the name of the
plaintiff. Recovery thereof via replevin suit is allowed by Rule 60 of the 1997 Rules of Civil
Procedure, which is undoubtedly within the jurisdiction of the Regional Trial Court.
In the Complaint, plaintiff claims to be the owner of the company car and despite demand,
defendant refused to return said car. This is clearly sufficient statement of plaintiff’s cause of
action.
Neither is there forum shopping. The element of litis penden[t]ia does not appear to exist because
the judgment in the labor dispute will not constitute res judicata to bar the filing of this case.
WHEREFORE, the Motion to Dismiss is hereby denied for lack of merit.
SO ORDERED.17
Astorga filed a motion for reconsideration, but the RTC denied it on June 18, 1999. 18
Astorga elevated the denial of her motion via certiorari to the CA, which, in its February 28, 2000
Decision,19reversed the RTC ruling. Granting the petition and, consequently, dismissing the replevin case,
the CA held that the case is intertwined with Astorga’s complaint for illegal dismissal; thus, it is the labor
tribunal that has rightful jurisdiction over the complaint. SMART’s motion for reconsideration having been
denied,20 it elevated the case to this Court, now docketed as G.R. No. 148132.
Meanwhile, SMART also appealed the unfavorable ruling of the Labor Arbiter in the illegal dismissal case
to the National Labor Relations Commission (NLRC). In its September 27, 1999 Decision, 21 the NLRC
sustained Astorga’s dismissal. Reversing the Labor Arbiter, the NLRC declared the abolition of CSMG and
the creation of SNMI to do the sales and marketing services for SMART a valid organizational action. It
overruled the Labor Arbiter’s ruling that SNMI is an in-house agency, holding that it lacked legal basis. It
also declared that contracting, subcontracting and streamlining of operations for the purpose of increasing
efficiency are allowed under the law. The NLRC further found erroneous the Labor Arbiter’s disquisition
that redundancy to be valid must be impelled by economic reasons, and upheld the redundancy measures
undertaken by SMART.
The NLRC disposed, thus:
WHEREFORE, the Decision of the Labor Arbiter is hereby reversed and set aside. [Astorga] is
further ordered to immediately return the company vehicle assigned to her. [Smart and Santiago]
are hereby ordered to pay the final wages of [Astorga] after [she] had submitted the required
supporting papers therefor.
SO ORDERED.22
Astorga filed a motion for reconsideration, but the NLRC denied it on December 21, 1999. 23
Astorga then went to the CA via certiorari. On June 11, 2001, the CA rendered a Decision24 affirming with
modification the resolutions of the NLRC. In gist, the CA agreed with the NLRC that the reorganization
undertaken by SMART resulting in the abolition of CSMG was a legitimate exercise of management
prerogative. It rejected Astorga’s posturing that her non-absorption into SNMI was tainted with bad faith.
However, the CA found that SMART failed to comply with the mandatory one-month notice prior to the
intended termination. Accordingly, the CA imposed a penalty equivalent to Astorga’s one-month salary for
this non-compliance. The CA also set aside the NLRC’s order for the return of the company vehicle holding
that this issue is not essentially a labor concern, but is civil in nature, and thus, within the competence of the
regular court to decide. It added that the matter had not been fully ventilated before the NLRC, but in the
regular court.
Astorga filed a motion for reconsideration, while SMART sought partial reconsideration, of the Decision.
On December 18, 2001, the CA resolved the motions, viz.:
WHEREFORE, [Astorga’s] motion for reconsideration is hereby PARTIALLY GRANTED.
[Smart] is hereby ordered to pay [Astorga] her backwages from 15 February 1998 to 06 November
1998. [Smart’s] motion for reconsideration is outrightly DENIED.
SO ORDERED.25
92
Astorga and SMART came to us with their respective petitions for review assailing the CA ruling, docketed
as G.R Nos. 151079 and 151372. On February 27, 2002, this Court ordered the consolidation of these
petitions with G.R. No. 148132.26
In her Memorandum, Astorga argues:
I
THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF ASTORGA’S
DISMISSAL DESPITE THE FACT THAT HER DISMISSAL WAS EFFECTED IN CLEAR
VIOLATION OF THE CONSTITUTIONAL RIGHT TO SECURITY OF TENURE,
CONSIDERING THAT THERE WAS NO GENUINE GROUND FOR HER DISMISSAL.
II
SMART’S REFUSAL TO REINSTATE ASTORGA DURING THE PENDENCY OF THE
APPEAL AS REQUIRED BY ARTICLE 223 OF THE LABOR CODE, ENTITLES ASTORGA
TO HER SALARIES DURING THE PENDENCY OF THE APPEAL.
III
THE COURT OF APPEALS WAS CORRECT IN HOLDING THAT THE REGIONAL TRIAL
COURT HAS NO JURISDICTION OVER THE COMPLAINT FOR RECOVERY OF A CAR
WHICH ASTORGA ACQUIRED AS PART OF HER EMPLOYEE (sic) BENEFIT.27
On the other hand, Smart in its Memoranda raises the following issues:
I
WHETHER THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION OF
SUBSTANCE IN A WAY PROBABLY NOT IN ACCORD WITH LAW OR WITH
APPLICABLE DECISION OF THE HONORABLE SUPREME COURT AND HAS SO FAR
DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS
AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION WHEN IT RULED
THAT SMART DID NOT COMPLY WITH THE NOTICE REQUIREMENTS PRIOR TO
TERMINATING ASTORGA ON THE GROUND OF REDUNDANCY.
II
WHETHER THE NOTICES GIVEN BY SMART TO ASTORGA AND THE DEPARTMENT
OF LABOR AND EMPLOYMENT ARE SUBSTANTIAL COMPLIANCE WITH THE NOTICE
REQUIREMENTS BEFORE TERMINATION.
III
WHETHER THE RULE ENUNCIATED IN SERRANO VS. NATIONAL LABOR RELATIONS
COMMISSION FINDS APPLICATION IN THE CASE AT BAR CONSIDERING THAT IN
THE SERRANO CASE THERE WAS ABSOLUTELY NO NOTICE AT ALL.28
IV
WHETHER THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION OF
SUBSTANCE IN A WAY PROBABLY NOT IN ACCORD WITH LAW OR WITH
APPLICABLE DECISION[S] OF THE HONORABLE SUPREME COURT AND HAS SO FAR
DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS
AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION WHEN IT RULED
THAT THE REGIONAL TRIAL COURT DOES NOT HAVE JURISDICTION OVER THE
COMPLAINT FOR REPLEVIN FILED BY SMART TO RECOVER ITS OWN COMPANY
VEHICLE FROM A FORMER EMPLOYEE WHO WAS LEGALLY DISMISSED.
V
WHETHER THE HONORABLE COURT OF APPEALS HAS FAILED TO APPRECIATE
THAT THE SUBJECT OF THE REPLEVIN CASE IS NOT THE ENFORCEMENT OF A CAR
PLAN PRIVILEGE BUT SIMPLY THE RECOVERY OF A COMPANY CAR.
VI
 WHETHER THE HONORABLE COURT OF APPEALS HAS FAILED TO APPRECIATE
THAT ASTORGA CAN NO LONGER BE CONSIDERED AS AN EMPLOYEE OF SMART
UNDER THE LABOR CODE.29
The Court shall first deal with the propriety of dismissing the replevin case filed with the RTC of Makati
City allegedly for lack of jurisdiction, which is the issue raised in G.R. No. 148132.
Replevin is an action whereby the owner or person entitled to repossession of goods or chattels may recover
those goods or chattels from one who has wrongfully distrained or taken, or who wrongfully detains such
goods or chattels. It is designed to permit one having right to possession to recover property in specie from
one who has wrongfully taken or detained the property.30 The term may refer either to the action itself, for
the recovery of personalty, or to the provisional remedy traditionally associated with it, by which possession
of the property may be obtained by the plaintiff and retained during the pendency of the action. 31
That the action commenced by SMART against Astorga in the RTC of Makati City was one for replevin
hardly admits of doubt.
In reversing the RTC ruling and consequently dismissing the case for lack of jurisdiction, the CA made the
following disquisition, viz.:
[I]t is plain to see that the vehicle was issued to [Astorga] by [Smart] as part of the employment
package. We doubt that [SMART] would extend [to Astorga] the same car plan privilege were it
not for her employment as district sales manager of the company. Furthermore, there is no civil
contract for a loan between [Astorga] and [Smart]. Consequently, We find that the car plan
privilege is a benefit arising out of employer-employee relationship. Thus, the claim for such falls
squarely within the original and exclusive jurisdiction of the labor arbiters and the NLRC.32
We do not agree. Contrary to the CA’s ratiocination, the RTC rightfully assumed jurisdiction over the suit
and acted well within its discretion in denying Astorga’s motion to dismiss. SMART’s demand for payment
of the market value of the car or, in the alternative, the surrender of the car, is not a labor, but a civil,
dispute. It involves the relationship of debtor and creditor rather than employee-employer relations.33 As
such, the dispute falls within the jurisdiction of the regular courts.
In Basaya, Jr. v. Militante,34 this Court, in upholding the jurisdiction of the RTC over the replevin suit,
explained:
Replevin is a possessory action, the gist of which is the right of possession in the plaintiff. The
primary relief sought therein is the return of the property in specie wrongfully detained by another
person. It is an ordinary statutory proceeding to adjudicate rights to the title or possession of
personal property. The question of whether or not a party has the right of possession over the
property involved and if so, whether or not the adverse party has wrongfully taken and detained
said property as to require its return to plaintiff, is outside the pale of competence of a labor
tribunal and beyond the field of specialization of Labor Arbiters.
xxxx
The labor dispute involved is not intertwined with the issue in the Replevin Case. The respective
issues raised in each forum can be resolved independently on the other. In fact in 18 November
1986, the NLRC in the case before it had issued an Injunctive Writ enjoining the petitioners from
blocking the free ingress and egress to the Vessel and ordering the petitioners to disembark and
vacate. That aspect of the controversy is properly settled under the Labor Code. So also with
petitioners’ right to picket. But the determination of the question of who has the better right to take
possession of the Vessel and whether petitioners can deprive the Charterer, as the legal possessor
of the Vessel, of that right to possess in addressed to the competence of Civil Courts.
In thus ruling, this Court is not sanctioning split jurisdiction but defining avenues of jurisdiction as
laid down by pertinent laws.
The CA, therefore, committed reversible error when it overturned the RTC ruling and ordered the dismissal
of the replevin case for lack of jurisdiction.
Having resolved that issue, we proceed to rule on the validity of Astorga’s dismissal.
93
Astorga was terminated due to redundancy, which is one of the authorized causes for the dismissal of an
employee. The nature of redundancy as an authorized cause for dismissal is explained in the leading case
of Wiltshire File Co., Inc. v. National Labor Relations Commission,35 viz:
x x x redundancy in an employer’s personnel force necessarily or even ordinarily refers to
duplication of work. That no other person was holding the same position that private respondent
held prior to termination of his services does not show that his position had not become redundant.
Indeed, in any well organized business enterprise, it would be surprising to find duplication of
work and two (2) or more people doing the work of one person. We believe that redundancy, for
purposes of the Labor Code, exists where the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is
redundant where it is superfluous, and superfluity of a position or positions may be the outcome of
a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a
particular product line or service activity previously manufactured or undertaken by the enterprise.
The characterization of an employee’s services as superfluous or no longer necessary and, therefore,
properly terminable, is an exercise of business judgment on the part of the employer. The wisdom and
soundness of such characterization or decision is not subject to discretionary review provided, of course, that
a violation of law or arbitrary or malicious action is not shown. 36
Astorga claims that the termination of her employment was illegal and tainted with bad faith. She asserts
that the reorganization was done in order to get rid of her. But except for her barefaced allegation, no
convincing evidence was offered to prove it. This Court finds it extremely difficult to believe that SMART
would enter into a joint venture agreement with NTT, form SNMI and abolish CSMG/FSD simply for the
sole purpose of easing out a particular employee, such as Astorga. Moreover, Astorga never denied that
SMART offered her a supervisory position in the Customer Care Department, but she refused the offer
because the position carried a lower salary rank and rate. If indeed SMART simply wanted to get rid of her,
it would not have offered her a position in any department in the enterprise.
Astorga also states that the justification advanced by SMART is not true because there was no compelling
economic reason for redundancy. But contrary to her claim, an employer is not precluded from adopting a
new policy conducive to a more economical and effective management even if it is not experiencing
economic reverses. Neither does the law require that the employer should suffer financial losses before he
can terminate the services of the employee on the ground of redundancy. 37
We agree with the CA that the organizational realignment introduced by SMART, which culminated in the
abolition of CSMG/FSD and termination of Astorga’s employment was an honest effort to make SMART’s
sales and marketing departments more efficient and competitive. As the CA had taken pains to elucidate:
x x x a careful and assiduous review of the records will yield no other conclusion than that the
reorganization undertaken by SMART is for no purpose other than its declared objective – as a
labor and cost savings device. Indeed, this Court finds no fault in SMART’s decision to outsource
the corporate sales market to SNMI in order to attain greater productivity. [Astorga] belonged to
the Sales Marketing Group under the Fixed Services Division (CSMG/FSD), a distinct sales force
of SMART in charge of selling SMART’s telecommunications services to the corporate market.
SMART, to ensure it can respond quickly, efficiently and flexibly to its customer’s requirement,
abolished CSMG/FSD and shortly thereafter assigned its functions to newly-created SNMI
Multimedia Incorporated, a joint venture company of SMART and NTT of Japan, for the reason
that CSMG/FSD does not have the necessary technical expertise required for the value added
services. By transferring the duties of CSMG/FSD to SNMI, SMART has created a more
competent and specialized organization to perform the work required for corporate accounts. It is
also relieved SMART of all administrative costs – management, time and money-needed in
maintaining the CSMG/FSD. The determination to outsource the duties of the CSMG/FSD to
SNMI was, to Our mind, a sound business judgment based on relevant criteria and is therefore a
legitimate exercise of management prerogative.
Indeed, out of our concern for those lesser circumstanced in life, this Court has inclined towards the worker The records show that Astorga’s length of service is less than a year. She is, therefore, also entitled to
and upheld his cause in most of his conflicts with his employer. This favored treatment is consonant with the separation pay equivalent to one (1) month pay.
social justice policy of the Constitution. But while tilting the scales of justice in favor of workers, the Finally, we note that Astorga claimed non-payment of wages from February 15, 1998. This assertion was
fundamental law also guarantees the right of the employer to reasonable returns for his investment. 38 In this never rebutted by SMART in the proceedings a quo. No proof of payment was presented by SMART to
light, we must acknowledge the prerogative of the employer to adopt such measures as will promote greater disprove the allegation. It is settled that in labor cases, the burden of proving payment of monetary claims
efficiency, reduce overhead costs and enhance prospects of economic gains, albeit always within the rests on the employer.44 SMART failed to discharge the onus probandi. Accordingly, it must be held liable
framework of existing laws. Accordingly, we sustain the reorganization and redundancy program for Astorga’s salary from February 15, 1998 until the effective date of her termination, on April 3, 1998.
undertaken by SMART. However, the award of backwages to Astorga by the CA should be deleted for lack of basis. Backwages is a
However, as aptly found by the CA, SMART failed to comply with the mandated one (1) month notice prior relief given to an illegally dismissed employee. Thus, before backwages may be granted, there must be a
to termination. The record is clear that Astorga received the notice of termination only on March 16, finding of unjust or illegal dismissal from work.45 The Labor Arbiter ruled that Astorga was illegally
199839 or less than a month prior to its effectivity on April 3, 1998. Likewise, the Department of Labor and dismissed. But on appeal, the NLRC reversed the Labor Arbiter’s ruling and categorically declared
Employment was notified of the redundancy program only on March 6, 1998. 40 Astorga’s dismissal valid. This ruling was affirmed by the CA in its assailed Decision. Since Astorga’s
Article 283 of the Labor Code clearly provides: dismissal is for an authorized cause, she is not entitled to backwages. The CA’s award of backwages is
Art. 283. Closure of establishment and reduction of personnel. — The employer may also totally inconsistent with its finding of valid dismissal.
terminate the employment of any employee due to the installation of labor saving devices, WHEREFORE, the petition of SMART docketed as G.R. No. 148132 is GRANTED. The February 28, 2000
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the Decision and the May 7, 2001 Resolution of the Court of Appeals in CA-G.R. SP. No. 53831 are SET
establishment or undertaking unless the closing is for the purpose of circumventing the provisions ASIDE. The Regional Trial Court of Makati City, Branch 57 is DIRECTED to proceed with the trial of
of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment Civil Case No. 98-1936 and render its Decision with reasonable dispatch.
at least one (1) month before the intended date thereof x x x. On the other hand, the petitions of SMART and Astorga docketed as G.R. Nos. 151079 and 151372
SMART’s assertion that Astorga cannot complain of lack of notice because the organizational realignment are DENIED. The June 11, 2001 Decision and the December 18, 2001 Resolution in CA-G.R. SP. No.
was made known to all the employees as early as February 1998 fails to persuade. Astorga’s actual 57065, are AFFIRMED with MODIFICATION. Astorga is declared validly dismissed. However, SMART
knowledge of the reorganization cannot replace the formal and written notice required by the law. In the is ordered to pay Astorga P50,000.00 as indemnity for its non-compliance with procedural due process, her
written notice, the employees are informed of the specific date of the termination, at least a month prior to separation pay equivalent to one (1) month pay, and her salary from February 15, 1998 until the effective
the effectivity of such termination, to give them sufficient time to find other suitable employment or to make date of her termination on April 3, 1998. The award of backwages is DELETED for lack of basis.
whatever arrangements are needed to cushion the impact of termination. In this case, notwithstanding SO ORDERED.
Astorga’s knowledge of the reorganization, she remained uncertain about the status of her employment until
SMART gave her formal notice of termination. But such notice was received by Astorga barely two (2)
weeks before the effective date of termination, a period very much shorter than that required by law.
Be that as it may, this procedural infirmity would not render the termination of Astorga’s employment
illegal. The validity of termination can exist independently of the procedural infirmity of the
dismissal.41 In DAP Corporation v. CA,42 we found the dismissal of the employees therein valid and for
authorized cause even if the employer failed to comply with the notice requirement under Article 283 of the
Labor Code. This Court upheld the dismissal, but held the employer liable for non-compliance with the
procedural requirements.
The CA, therefore, committed no reversible error in sustaining Astorga’s dismissal and at the same time,
awarding indemnity for violation of Astorga's statutory rights.
However, we find the need to modify, by increasing, the indemnity awarded by the CA to Astorga, as a
sanction on SMART for non-compliance with the one-month mandatory notice requirement, in light of our
ruling in Jaka Food Processing Corporation v. Pacot,43 viz.:
[I]f the dismissal is based on a just cause under Article 282 but the employer failed to comply with
the notice requirement, the sanction to be imposed upon him should be tempered because the
dismissal process was, in effect, initiated by an act imputable to the employee, and (2) if the
dismissal is based on an authorized cause under Article 283 but the employer failed to comply with
the notice requirement, the sanction should be stiffer because the dismissal process was initiated by
the employer’s exercise of his management prerogative.
We deem it proper to increase the amount of the penalty on SMART to P50,000.00.
As provided in Article 283 of the Labor Code, Astorga is, likewise, entitled to separation pay equivalent to
at least one (1) month salary or to at least one (1) month’s pay for every year of service, whichever is higher.

94
 SECOND DIVISION
A.M. No. P-07-2384 June 18, 2008
KENNETH HAO, complainant, vs. ABE C. ANDRES, Sheriff IV, Regional Trial Court, Branch 16, Davao
City, respondent.
RESOLUTION
QUISUMBING, J.:
Before us is an administrative complaint for gross neglect of duty, grave abuse of authority (oppression) and
violation of Republic Act No. 30191 filed by complainant Kenneth Hao against respondent Abe C. Andres,
Sheriff IV of the Regional Trial Court (RTC) of Davao City, Branch 16.
The antecedent facts are as follows:
Complainant Hao is one of the defendants in a civil case for replevin docketed as Civil Case No. 31, 127-
20052entitled "Zenaida Silver, doing trade and business under the name and style ZHS Commercial v.
Loreto Hao, Atty. Amado Cantos, Kenneth Hao and John Does," pending before the RTC of Davao City,
Branch 16.
On October 17, 2005, Judge Renato A. Fuentes3 issued an Order of Seizure4 against 22 motor vehicles
allegedly owned by the complainant. On the strength of the said order, Andres was able to seize two of the
subject motor vehicles on October 17, 2005; four on October 18, 2005, and another three on October 19,
2005, or a total of nine motor vehicles.5
In his Affidavit-Complaint6 against Andres before the Office of the Court Administrator (OCA), Hao
alleged that Andres gave undue advantage to Zenaida Silver in the implementation of the order and that
Andres seized the nine motor vehicles in an oppressive manner. Hao also averred that Andres was
accompanied by unidentified armed personnel on board a military vehicle which was excessive since there
were no resistance from them. Hao also discovered that the compound where the seized motor vehicles were
placed is actually owned by Silver.7
On October 21, 2005, in view of the approval of the complainant’s counter-replevin bond, Judge Emmanuel
C. Carpio8 ordered Andres to immediately cease and desist from further implementing the order of seizure,
and to return the seized motor vehicles including its accessories to their lawful owners. 9
However, on October 24, 2005, eight of the nine seized motor vehicles were reported missing. In his
report,10Andres stated that he was shocked to find that the motor vehicles were already missing when he
inspected it on October 22, 2005. He narrated that on October 21, 2005, PO3 Rodrigo Despe, one of the
policemen guarding the subject motor vehicles, reported to him that a certain "Nonoy" entered the
compound and caused the duplication of the vehicles’ keys. 11 But Andres claimed the motor vehicles were
still intact when he inspected it on October 21, 2005.
Subsequently, Hao reported that three of the carnapped vehicles were recovered by the police. 12 He then
accused Andres of conspiring and conniving with Atty. Oswaldo Macadangdang (Silver’s counsel) and the
policemen in the carnapping of the motor vehicles. Hao also accused Andres of concealing the depository
receipts from them and pointed out that the depository receipts show that Silver and Atty. Macadangdang
were the ones who chose the policemen who will guard the motor vehicles.
In his Comment13 dated March 3, 2006, Andres vehemently denied violating Rep. Act No. 3019 and
committing gross neglect of duty.
Andres denied implementing the Order of Seizure in an oppressive manner. He said he took the vehicles
because they were the specific vehicles ordered to be seized after checking their engine and chassis
numbers. Andres likewise denied that he was accompanied by military personnel in the implementation of
the order. He claimed that he was merely escorted by policemen pursuant to the directive of Police Senior
Supt. Catalino S. Cuy, Chief of the Davao City Police Office. Andres also maintained that no form of
harassment or oppression was committed during the implementation of the order, claiming that the presence
of the policemen was only for the purpose of preserving peace and order, considering there were 22 motor
vehicles specified in the Order of Seizure. Andres added that he exercised no discretion in the selection of
95
the policemen who assisted in the implementation of the order, much less of those who will guard the seized
motor vehicles.
Andres disputed the allegation that he neglected his duty to safeguard the seized vehicles by pointing out
that he placed all the motor vehicles under police watch. He added that the policemen had control of the
compound where the seized motor vehicles were kept.
Andres likewise contended that after the unauthorized duplication of the vehicles’ keys was reported to him,
he immediately advised the policemen on duty to watch the motor vehicles closely. 14 He negated the
speculations that he was involved in the disappearance of the seized motor vehicles as he claims to be the
one who reported the incident to the court and the police.
As to the allegation of undisclosed depository receipts, Andres maintained that he never denied the existence
of the depository receipts. He said the existence of the depository receipts was immediately made known on
the same day that the subject motor vehicles were discovered missing. He even used the same in the filing of
the carnapping case against Silver and her co-conspirators.
Finally, Andres insisted that the guarding of properties under custodia legis by policemen is not prohibited,
but is even adopted by the court. Hence, he prays that he be held not liable for the loss of the vehicles and
that he be relieved of his duty to return the vehicles. 15
After the OCA recommended that the matter be investigated, we referred the case to Executive Judge
Renato A. Fuentes for investigation, report and recommendation. 16
In his Investigation Report17 dated September 21, 2006, Judge Fuentes found Andres guilty of serious
negligence in the custody of the nine motor vehicles. He recommended that Andres be suspended from
office.
Judge Fuentes found numerous irregularities in the implementation of the writ of replevin/order of seizure,
to wit: (1) at the time of the implementation of the writ, Andres knew that the vehicles to be seized were not
in the names of any of the parties to the case; (2) one vehicle was taken without the knowledge of its owner,
a certain Junard Escudero; (3) Andres allowed Atty. Macadangdang to get a keymaster to duplicate the
vehicles’ keys in order to take one motor vehicle; and (4) Andres admitted that prior to the implementation
of the writ of seizure, he consulted Silver and Atty. Macadangdang regarding the implementation of the writ
and was accompanied by the latter in the course of the implementation. Judge Fuentes observed that the
motor vehicles were speedily seized without strictly observing fairness and regularity in its
implementation.18
Anent the safekeeping of the seized motor vehicles, Judge Fuentes pointed out several instances where
Andres lacked due diligence to wit: (1) the seized motor vehicles were placed in a compound surrounded by
an insufficiently locked see-through fence; (2) three motor vehicles were left outside the compound; (3)
Andres turned over the key of the gate to the policemen guarding the motor vehicles; (4) Andres does not
even know the full name of the owner of the compound, who was merely known to him as "Gloria"; (5)
except for PO3 Despe and SPO4 Nelson Salcedo, the identities of the other policemen tapped to guard the
compound were unknown to Andres; (6) Andres also admitted that he only stayed at least one hour each day
from October 19-21, 2005 during his visits to the compound; and (7) even after it was reported to him that a
certain "Nonoy" entered the compound and duplicated the keys of the motor vehicles, he did not exert his
best effort to look for that "Nonoy" and to confiscate the duplicated keys. 19
Judge Fuentes also observed that Andres appeared to be more or less accommodating to Silver and her
counsel but hostile and uncooperative to the complainant. He pointed out that Andres depended solely on
Silver in the selection of the policemen who would guard the seized motor vehicles. He added that even the
depository receipts were not turned over to the defendants/third-party claimants in the replevin case but were
in fact concealed from them. Andres also gave inconsistent testimonies as to whether he has in his
possession the depository receipts.20
The OCA disagreed with the observations of Judge Fuentes. It recommended that Andres be held liable only
for simple neglect of duty and be suspended for one (1) month and one (1) day. 21
We adopt the recommendation of the investigating judge.
Being an officer of the court, Andres must be aware that there are well-defined steps provided in the Rules
of Court regarding the proper implementation of a writ of replevin and/or an order of seizure. The Rules,
likewise, is explicit on the duty of the sheriff in its implementation. To recapitulate what should be common
knowledge to sheriffs, the pertinent provisions of Rule 60, of the Rules of Court are quoted hereunder:
SEC. 4. Duty of the sheriff.–Upon receiving such order, the sheriff must serve a copy thereof on the
adverse party, together with a copy of the application, affidavit and bond, and must forthwith take the
property, if it be in the possession of the adverse party, or his agent, and retain it in his custody. If the
property or any part thereof be concealed in a building or enclosure, the sheriff must demand its
delivery, and if it be not delivered, he must cause the building or enclosure to be broken open and take
the property into his possession. After the sheriff has taken possession of the property as herein
provided, he must keep it in a secure place and shall be responsible for its delivery to the party entitled
thereto upon receiving his fees and necessary expenses for taking and keeping the same. (Emphasis
supplied.)
SEC. 6. Disposition of property by sheriff.–If within five (5) days after the taking of the property by the
sheriff, the adverse party does not object to the sufficiency of the bond, or of the surety or sureties
thereon; or if the adverse party so objects and the court affirms its approval of the applicant’s bond or
approves a new bond, or if the adverse party requires the return of the property but his bond is objected
to and found insufficient and he does not forthwith file an approved bond, the property shall be delivered
to the applicant. If for any reason the property is not delivered to the applicant, the sheriff must return it
to the adverse party. (Emphasis supplied.)
First, the rules provide that property seized under a writ of replevin is not to be delivered immediately to the
plaintiff.22 In accordance with the said rules, Andres should have waited no less than five days in order to
give the complainant an opportunity to object to the sufficiency of the bond or of the surety or sureties
thereon, or require the return of the seized motor vehicles by filing a counter-bond. This, he failed to do.
Records show that Andres took possession of two of the subject motor vehicles on October 17, 2005, four
on October 18, 2005, and another three on October 19, 2005. Simultaneously, as evidenced by the
depository receipts, on October 18, 2005, Silver received from Andres six of the seized motor vehicles, and
three more motor vehicles on October 19, 2005. Consequently, there is no question that Silver was already
in possession of the nine seized vehicles immediately after seizure, or no more than three days after the
taking of the vehicles. Thus, Andres committed a clear violation of Section 6, Rule 60 of the Rules of Court
with regard to the proper disposal of the property.
It matters not that Silver was in possession of the seized vehicles merely for safekeeping as stated in the
depository receipts. The rule is clear that the property seized should not be immediately delivered to the
plaintiff, and the sheriff must retain custody of the seized property for at least five days. 23 Hence, the act of
Andres in delivering the seized vehicles immediately after seizure to Silver for whatever purpose, without
observing the five-day requirement finds no legal justification.
In Pardo v. Velasco,24 this Court held that
…Respondent as an officer of the Court is charged with certain ministerial duties which must be
performed faithfully to the letter. Every provision in the Revised Rules of Court has a specific reason or
objective. In this case, the purpose of the five (5) days is to give a chance to the defendant to object to the
sufficiency of the bond or the surety or sureties thereon or require the return of the property by filing a
counterbond.…25 (Emphasis supplied.)
In Sebastian v. Valino,26 this Court reiterated that
Under the Revised Rules of Court, the property seized under a writ of replevin is not to be delivered
immediately to the plaintiff. The sheriff must retain it in his custody for five days and he shall return it to
the defendant, if the latter, as in the instant case, requires its return and files a counterbond.…27 (Emphasis
supplied.)
Likewise, Andres’ claim that he had no knowledge that the compound is owned by Silver fails to convince
us. Regardless of who actually owns the compound, the fact remains that Andres delivered the vehicles to
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Silver prematurely. It violates the rule requiring him to safekeep the vehicles in his custody. 28 The alleged
lack of facility to store the seized vehicles is unacceptable considering that he should have deposited the
same in a bonded warehouse. If this was not feasible, he should have sought prior authorization from the
court issuing the writ before delivering the vehicles to Silver.
Second, it must be stressed that from the moment an order of delivery in replevin is executed by taking
possession of the property specified therein, such property is in custodia legis. As legal custodian, it is
Andres’ duty to safekeep the seized motor vehicles. Hence, when he passed his duty to safeguard the motor
vehicles to Silver, he committed a clear neglect of duty.
Third, we are appalled that even after PO3 Despe reported the unauthorized duplication of the vehicles’
keys, Andres failed to take extra precautionary measures to ensure the safety of the vehicles. It is obvious
that the vehicles were put at risk by the unauthorized duplication of the keys of the vehicles. Neither did he
immediately report the incident to the police or to the court. The loss of the motor vehicles could have been
prevented if Andres immediately asked the court for an order to transfer the vehicles to another secured
place as soon as he discovered the unauthorized duplication. Under these circumstances, even an ordinary
prudent man would have exercised extra diligence. His warning to the policemen to closely watch the
vehicles was insufficient. Andres cannot toss back to Silver or to the policemen the responsibility for the
loss of the motor vehicles since he remains chiefly responsible for their safekeeping as legal custodian
thereof. Indeed, Andres’ failure to take the necessary precaution and proper monitoring of the vehicles to
ensure its safety constitutes plain negligence.
Fourth, despite the cease and desist order, Andres failed to return the motor vehicles to their lawful owners.
Instead of returning the motor vehicles immediately as directed, he opted to write Silver and demand that
she put up an indemnity bond to secure the third-party claims. Consequently, due to his delay, the eventual
loss of the motor vehicles rendered the order to return the seized vehicles ineffectual to the prejudice of the
complaining owners.
It must be stressed that as court custodian, it was Andres’ responsibility to ensure that the motor vehicles
were safely kept and that the same were readily available upon order of the court or demand of the parties
concerned. Specifically, sheriffs, being ranking officers of the court and agents of the law, must discharge
their duties with great care and diligence. In serving and implementing court writs, as well as processes and
orders of the court, they cannot afford to err without affecting adversely the proper dispensation of justice.
Sheriffs play an important role in the administration of justice and as agents of the law, high standards of
performance are expected of them.29Hence, his failure to return the motor vehicles at the time when its
return was still feasible constitutes another instance of neglect of duty.
Fifth, as found by the OCA, we agree that Andres also disregarded the provisions of Rule 141 30 of the Rules
of Court with regard to payment of expenses.
Under Section 9,31 Rule 141 of the Rules of Court, the procedure for the execution of writs and other
processes are: First, the sheriff must make an estimate of the expenses to be incurred by him; Second, he
must obtain court approval for such estimated expenses; Third, the approved estimated expenses shall be
deposited by the interested party with the Clerk of Court and ex officio sheriff; Fourth, the Clerk of Court
shall disburse the amount to the executing sheriff; and Fifth, the executing sheriff shall liquidate his
expenses within the same period for rendering a return on the writ.
In this case, no estimate of sheriff’s expenses was submitted to the court by Andres. Without approval of the
court, he also allowed Silver to pay directly to the policemen the expenses for the safeguarding of the motor
vehicles including their meals.32 Obviously, this practice departed from the accepted procedure provided in
the Rules of Court.
In view of the foregoing, there is no doubt that Andres failed to live up to the standards required of his
position. The number of instances that Andres strayed from the regular course observed in the proper
implementation of the orders of the court cannot be countenanced. Thus, taking into account the numerous
times he was found negligent and careless of his duties coupled with his utter disregard of legal procedures,
he cannot be considered guilty merely of simple negligence. His acts constitute gross negligence.
As we have previously ruled:
…Gross negligence refers to negligence characterized by the want of even slight care, acting or omitting
to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally, with a
conscious indifference to consequences in so far as other persons may be affected. It is the omission of
that care which even inattentive and thoughtless men never fail to take on their own
property.…33(Emphasis supplied.)
…Gross neglect, on the other hand, is such neglect from the gravity of the case, or the frequency of
instances, becomes so serious in its character as to endanger or threaten the public welfare. The term
does not necessarily include willful neglect or intentional official wrongdoing. 34 (Emphasis supplied.)
Good faith on the part of Andres, or lack of it, in proceeding to properly execute his mandate would be of no
moment, for he is chargeable with the knowledge that being an officer of the court tasked therefor, it
behooves him to make due compliance. He is expected to live up to the exacting standards of his office and
his conduct must at all times be characterized by rectitude and forthrightness, and so above suspicion and
mistrust as well.35 Thus, an act of gross neglect resulting in loss of properties in custodia legis ruins the
confidence lodged by the parties to a suit or the citizenry in our judicial process. Those responsible for such
act or omission cannot escape the disciplinary power of this Court.
Anent the allegation of grave abuse of authority (oppression), we likewise agree with the observations of the
investigating judge. Records show that Andres started enforcing the writ of replevin/order of seizure on the
same day that the order of seizure was issued. He also admitted that he took the vehicles of persons who are
not parties to the replevin case.36 He further admitted that he took one vehicle belonging to a certain Junard
Escudero without the latter’s knowledge and even caused the duplication of its keys in order that it may be
taken by Andres.37Certainly, these are indications that Andres enforced the order of seizure with undue haste
and without giving the complainant prior notice or reasonable time to deliver the motor vehicles. Hence,
Andres is guilty of grave abuse of authority (oppression).
When a writ is placed in the hands of a sheriff, it is his duty, in the absence of any instructions to the
contrary, to proceed with reasonable celerity and promptness to execute it according to its mandate.
However, the prompt implementation of an order of seizure is called for only in instances where there is no
question regarding the right of the plaintiff to the property. 38 Where there is such a question, the prudent
recourse for Andres is to desist from executing the order and convey the information to his judge and to the
plaintiff.
True, sheriffs must comply with their mandated ministerial duty to implement writs promptly and
expeditiously, but equally true is the principle that sheriffs by the nature of their functions must at all times
conduct themselves with propriety and decorum and act above suspicion. There must be no room for anyone
to conjecture that sheriffs and deputy sheriffs as officers of the court have conspired with any of the parties
to a case to obtain a favorable judgment or immediate execution. The sheriff is at the front line as
representative of the judiciary and by his act he may build or destroy the institution.39
However, as to the charge of graft and corruption, it must be stressed that the same is criminal in nature,
thus, the resolution thereof cannot be threshed out in the instant administrative proceeding. We also take
note that there is a pending criminal case for carnapping against Andres; 40 hence, with more reason that we
cannot rule on the allegation of graft and corruption as it may preempt the court in its resolution of the said
case.
We come to the matter of penalties. The imposable penalty for gross neglect of duty is dismissal. While the
penalty imposable for grave abuse of authority (oppression) is suspension for six (6) months one (1) day to
one (1) year.41Section 55, Rule IV, of the Uniform Rules on Administrative Cases in the Civil Service
provides that if the respondent is found guilty of two or more charges or counts, the penalty to be imposed
should be that corresponding to the most serious charge or count and the rest shall be considered as
aggravating circumstances.
In the instant case, the penalty for the more serious offense which is dismissal should be imposed on Andres.
However, following Sections 5342 and 54,43 Rule IV of the Uniform Rules on Administrative Cases in the
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Civil Service, we have to consider that Andres is a first-time offender; hence, a lighter penalty than
dismissal from the service would suffice. Consequently, instead of imposing the penalty of dismissal, the
penalty of suspension from office for one (1) year without pay is proper for gross neglect of duty, and
another six (6) months should be added for the aggravating circumstance of grave abuse of authority
(oppression).
WHEREFORE, the Court finds Abe C. Andres, Sheriff IV, RTC of Davao City, Branch 16, GUILTY of
gross neglect of duty and grave abuse of authority (oppression) and is SUSPENDED for one (1) year and six
(6) months without pay. He is also hereby WARNED that a repetition of the same or similar offenses in the
future shall be dealt with more severely.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
G.R. No. 153788 November 27, 2009
ROGER V. NAVARRO, Petitioner,
vs.
HON. JOSE L. ESCOBIDO, Presiding Judge, RTC Branch 37, Cagayan de Oro City, and KAREN T. GO,
doing business under the name KARGO ENTERPRISES, Respondents.
DECISION
BRION, J.:
This is a petition for review on certiorari1 that seeks to set aside the Court of Appeals (CA) Decision 2 dated
October 16, 2001 and Resolution3 dated May 29, 2002 in CA-G.R. SP. No. 64701. These CA rulings
affirmed the July 26, 20004 and March 7, 20015 orders of the Regional Trial Court (RTC), Misamis Oriental,
Cagayan de Oro City, denying petitioner Roger V. Navarro’s (Navarro) motion to dismiss.
BACKGROUND FACTS
On September 12, 1998, respondent Karen T. Go filed two complaints, docketed as Civil Case Nos. 98-599
(first complaint)6 and 98-598 (second complaint),7 before the RTC for replevin and/or sum of money with
damages against Navarro. In these complaints, Karen Go prayed that the RTC issue writs of replevin for the
seizure of two (2) motor vehicles in Navarro’s possession.
The first complaint stated:
1. That plaintiff KAREN T. GO is a Filipino, of legal age, married to GLENN O. GO, a resident of
Cagayan de Oro City and doing business under the trade name KARGO ENTERPRISES, an entity
duly registered and existing under and by virtue of the laws of the Republic of the Philippines,
which has its business address at Bulua, Cagayan de Oro City; that defendant ROGER NAVARRO
is a Filipino, of legal age, a resident of 62 Dolores Street, Nazareth, Cagayan de Oro City, where
he may be served with summons and other processes of the Honorable Court; that defendant
"JOHN DOE" whose real name and address are at present unknown to plaintiff is hereby joined as
party defendant as he may be the person in whose possession and custody the personal property
subject matter of this suit may be found if the same is not in the possession of defendant ROGER
NAVARRO;
2. That KARGO ENTERPRISES is in the business of, among others, buying and selling motor
vehicles, including hauling trucks and other heavy equipment;
3. That for the cause of action against defendant ROGER NAVARRO, it is hereby stated that on
August 8, 1997, the said defendant leased [from] plaintiff a certain motor vehicle which is more
particularly described as follows –
Make/Type FUSO WITH MOUNTED CRANE
Serial No. FK416K-51680
Motor No. 6D15-338735
Plate No. GHK-378
as evidenced by a LEASE AGREEMENT WITH OPTION TO PURCHASE entered into by and between
KARGO ENTERPRISES, then represented by its Manager, the aforementioned GLENN O. GO, and
defendant ROGER NAVARRO xxx; that in accordance with the provisions of the above LEASE
AGREEMENT WITH OPTION TO PURCHASE, defendant ROGER NAVARRO delivered unto plaintiff
six (6) post-dated checks each in the amount of SIXTY-SIX THOUSAND THREE HUNDRED THIRTY-
THREE & 33/100 PESOS (₱66,333.33) which were supposedly in payment of the agreed rentals; that when
the fifth and sixth checks, i.e. PHILIPPINE BANK OF COMMUNICATIONS – CAGAYAN DE ORO
BRANCH CHECKS NOS. 017112 and 017113, respectively dated January 8, 1998 and February 8, 1998,
were presented for payment and/or credit, the same were dishonored and/or returned by the drawee bank for
the common reason that the current deposit account against which the said checks were issued did not have
sufficient funds to cover the amounts thereof; that the total amount of the two (2) checks, i.e. the sum of
ONE HUNDRED THIRTY-TWO THOUSAND SIX HUNDRED SIXTY-SIX & 66/100 PESOS
(₱132,666.66) therefore represents the principal liability of defendant ROGER NAVARRO unto plaintiff on
the basis of the provisions of the above LEASE AGREEMENT WITH RIGHT TO PURCHASE; that
demands, written and oral, were made of defendant ROGER NAVARRO to pay the amount of ONE
HUNDRED THIRTY-TWO THOUSAND SIX HUNDRED SIXTY-SIX & 66/100 PESOS (₱132,666.66),
or to return the subject motor vehicle as also provided for in the LEASE AGREEMENT WITH RIGHT TO
PURCHASE, but said demands were, and still are, in vain to the great damage and injury of herein plaintiff;
xxx
4. That the aforedescribed motor vehicle has not been the subject of any tax assessment and/or fine pursuant
to law, or seized under an execution or an attachment as against herein plaintiff;
xxx
8. That plaintiff hereby respectfully applies for an order of the Honorable Court for the immediate delivery
of the above-described motor vehicle from defendants unto plaintiff pending the final determination of this
case on the merits and, for that purpose, there is attached hereto an affidavit duly executed and bond double
the value of the personal property subject matter hereof to answer for damages and costs which defendants
may suffer in the event that the order for replevin prayed for may be found out to having not been properly
issued.
The second complaint contained essentially the same allegations as the first complaint, except that the Lease
Agreement with Option to Purchase involved is dated October 1, 1997 and the motor vehicle leased is
described as follows:
Make/Type FUSO WITH MOUNTED CRANE
Serial No. FK416K-510528
Motor No. 6D14-423403
The second complaint also alleged that Navarro delivered three post-dated checks, each for the amount of
₱100,000.00, to Karen Go in payment of the agreed rentals; however, the third check was dishonored when
presented for payment.8
On October 12, 19989 and October 14, 1998,10 the RTC issued writs of replevin for both cases; as a result,
the Sheriff seized the two vehicles and delivered them to the possession of Karen Go.
In his Answers, Navarro alleged as a special affirmative defense that the two complaints stated no cause of
action, since Karen Go was not a party to the Lease Agreements with Option to Purchase (collectively, the
lease agreements) – the actionable documents on which the complaints were based.
On Navarro’s motion, both cases were duly consolidated on December 13, 1999.
In its May 8, 2000 order, the RTC dismissed the case on the ground that the complaints did not state a cause
of action.
98
In response to the motion for reconsideration Karen Go filed dated May 26, 2000, 11 the RTC issued another
order dated July 26, 2000 setting aside the order of dismissal. Acting on the presumption that Glenn Go’s
leasing business is a conjugal property, the RTC held that Karen Go had sufficient interest in his leasing
business to file the action against Navarro. However, the RTC held that Karen Go should have included her
husband, Glenn Go, in the complaint based on Section 4, Rule 3 of the Rules of Court (Rules). 12 Thus, the
lower court ordered Karen Go to file a motion for the inclusion of Glenn Go as co-plaintiff.1avvphi1
When the RTC denied Navarro’s motion for reconsideration on March 7, 2001, Navarro filed a petition for
certiorari with the CA, essentially contending that the RTC committed grave abuse of discretion when it
reconsidered the dismissal of the case and directed Karen Go to amend her complaints by including her
husband Glenn Go as co-plaintiff. According to Navarro, a complaint which failed to state a cause of action
could not be converted into one with a cause of action by mere amendment or supplemental pleading.
On October 16, 2001, the CA denied Navarro’s petition and affirmed the RTC’s order.13 The CA also denied
Navarro’s motion for reconsideration in its resolution of May 29, 2002, 14 leading to the filing of the present
petition.
THE PETITION
Navarro alleges that even if the lease agreements were in the name of Kargo Enterprises, since it did not
have the requisite juridical personality to sue, the actual parties to the agreement are himself and Glenn Go.
Since it was Karen Go who filed the complaints and not Glenn Go, she was not a real party-in-interest and
the complaints failed to state a cause of action.
Navarro posits that the RTC erred when it ordered the amendment of the complaint to include Glenn Go as a
co-plaintiff, instead of dismissing the complaint outright because a complaint which does not state a cause of
action cannot be converted into one with a cause of action by a mere amendment or a supplemental
pleading. In effect, the lower court created a cause of action for Karen Go when there was none at the time
she filed the complaints.
Even worse, according to Navarro, the inclusion of Glenn Go as co-plaintiff drastically changed the theory
of the complaints, to his great prejudice. Navarro claims that the lower court gravely abused its discretion
when it assumed that the leased vehicles are part of the conjugal property of Glenn and Karen Go. Since
Karen Go is the registered owner of Kargo Enterprises, the vehicles subject of the complaint are her
paraphernal properties and the RTC gravely erred when it ordered the inclusion of Glenn Go as a co-
plaintiff.
Navarro likewise faults the lower court for setting the trial of the case in the same order that required Karen
Go to amend her complaints, claiming that by issuing this order, the trial court violated Rule 10 of the Rules.
Even assuming the complaints stated a cause of action against him, Navarro maintains that the complaints
were premature because no prior demand was made on him to comply with the provisions of the lease
agreements before the complaints for replevin were filed.
Lastly, Navarro posits that since the two writs of replevin were issued based on flawed complaints, the
vehicles were illegally seized from his possession and should be returned to him immediately.
Karen Go, on the other hand, claims that it is misleading for Navarro to state that she has no real interest in
the subject of the complaint, even if the lease agreements were signed only by her husband, Glenn Go; she is
the owner of Kargo Enterprises and Glenn Go signed the lease agreements merely as the manager of Kargo
Enterprises. Moreover, Karen Go maintains that Navarro’s insistence that Kargo Enterprises is Karen Go’s
paraphernal property is without basis. Based on the law and jurisprudence on the matter, all property
acquired during the marriage is presumed to be conjugal property. Finally, Karen Go insists that her
complaints sufficiently established a cause of action against Navarro. Thus, when the RTC ordered her to
include her husband as co-plaintiff, this was merely to comply with the rule that spouses should sue jointly,
and was not meant to cure the complaints’ lack of cause of action.
THE COURT’S RULING
We find the petition devoid of merit.
Karen Go is the real party-in-interest
The 1997 Rules of Civil Procedure requires that every action must be prosecuted or defended in the name of
the real party-in-interest, i.e., the party who stands to be benefited or injured by the judgment in the suit, or
the party entitled to the avails of the suit.15
Interestingly, although Navarro admits that Karen Go is the registered owner of the business name Kargo
Enterprises, he still insists that Karen Go is not a real party-in-interest in the case. According to Navarro,
while the lease contracts were in Kargo Enterprises’ name, this was merely a trade name without a juridical
personality, so the actual parties to the lease agreements were Navarro and Glenn Go, to the exclusion of
Karen Go.
As a corollary, Navarro contends that the RTC acted with grave abuse of discretion when it ordered the
inclusion of Glenn Go as co-plaintiff, since this in effect created a cause of action for the complaints when
in truth, there was none.
We do not find Navarro’s arguments persuasive.
The central factor in appreciating the issues presented in this case is the business name Kargo Enterprises.
The name appears in the title of the Complaint where the plaintiff was identified as "KAREN T. GO doing
business under the name KARGO ENTERPRISES," and this identification was repeated in the first
paragraph of the Complaint. Paragraph 2 defined the business KARGO ENTERPRISES undertakes.
Paragraph 3 continued with the allegation that the defendant "leased from plaintiff a certain motor vehicle"
that was thereafter described. Significantly, the Complaint specifies and attaches as its integral part the
Lease Agreement that underlies the transaction between the plaintiff and the defendant. Again, the name
KARGO ENTERPRISES entered the picture as this Lease Agreement provides:
This agreement, made and entered into by and between:
GLENN O. GO, of legal age, married, with post office address at xxx, herein referred to as the LESSOR-
SELLER; representing KARGO ENTERPRISES as its Manager,
xxx
thus, expressly pointing to KARGO ENTERPRISES as the principal that Glenn O. Go represented. In other
words, by the express terms of this Lease Agreement, Glenn Go did sign the agreement only as the manager
of Kargo Enterprises and the latter is clearly the real party to the lease agreements.
As Navarro correctly points out, Kargo Enterprises is a sole proprietorship, which is neither a natural person,
nor a juridical person, as defined by Article 44 of the Civil Code:
Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose, created by law; their
personality begins as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations for private interest or purpose to which the law
grants a juridical personality, separate and distinct from that of each shareholder, partner or
member.
Thus, pursuant to Section 1, Rule 3 of the Rules, 16 Kargo Enterprises cannot be a party to a civil action. This
legal reality leads to the question: who then is the proper party to file an action based on a contract in the
name of Kargo Enterprises?
We faced a similar question in Juasing Hardware v. Mendoza,17 where we said:
Finally, there is no law authorizing sole proprietorships like petitioner to bring suit in court. The law merely
recognizes the existence of a sole proprietorship as a form of business organization conducted for profit by a
single individual, and requires the proprietor or owner thereof to secure licenses and permits, register the
business name, and pay taxes to the national government. It does not vest juridical or legal personality upon
the sole proprietorship nor empower it to file or defend an action in court.
Thus, the complaint in the court below should have been filed in the name of the owner of Juasing
Hardware. The allegation in the body of the complaint would show that the suit is brought by such person as
proprietor or owner of the business conducted under the name and style Juasing Hardware. The descriptive
99
words "doing business as Juasing Hardware" may be added to the title of the case, as is customarily
done.18 [Emphasis supplied.]
This conclusion should be read in relation with Section 2, Rule 3 of the Rules, which states:
SEC. 2. Parties in interest. – A real party in interest is the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law
or these Rules, every action must be prosecuted or defended in the name of the real party in interest.
As the registered owner of Kargo Enterprises, Karen Go is the party who will directly benefit from or be
injured by a judgment in this case. Thus, contrary to Navarro’s contention, Karen Go is the real party-in-
interest, and it is legally incorrect to say that her Complaint does not state a cause of action because her
name did not appear in the Lease Agreement that her husband signed in behalf of Kargo Enterprises.
Whether Glenn Go can legally sign the Lease Agreement in his capacity as a manager of Kargo
Enterprises, a sole proprietorship, is a question we do not decide, as this is a matter for the trial court to
consider in a trial on the merits.
Glenn Go’s Role in the Case
We find it significant that the business name Kargo Enterprises is in the name of Karen T. Go, 19 who
described herself in the Complaints to be "a Filipino, of legal age, married to GLENN O. GO, a resident of
Cagayan de Oro City, and doing business under the trade name KARGO ENTERPRISES."20 That Glenn Go
and Karen Go are married to each other is a fact never brought in issue in the case. Thus, the business name
KARGO ENTERPRISES is registered in the name of a married woman, a fact material to the side issue of
whether Kargo Enterprises and its properties are paraphernal or conjugal properties. To restate the parties’
positions, Navarro alleges that Kargo Enterprises is Karen Go’s paraphernal property, emphasizing the fact
that the business is registered solely in Karen Go’s name. On the other hand, Karen Go contends that while
the business is registered in her name, it is in fact part of their conjugal property.
The registration of the trade name in the name of one person – a woman – does not necessarily lead to the
conclusion that the trade name as a property is hers alone, particularly when the woman is married. By law,
all property acquired during the marriage, whether the acquisition appears to have been made, contracted or
registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is
proved.21 Our examination of the records of the case does not show any proof that Kargo Enterprises and the
properties or contracts in its name are conjugal. If at all, only the bare allegation of Navarro to this effect
exists in the records of the case. As we emphasized in Castro v. Miat:22
Petitioners also overlook Article 160 of the New Civil Code. It provides that "all property of the marriage is
presumed to be conjugal partnership, unless it be prove[n] that it pertains exclusively to the husband or to
the wife." This article does not require proof that the property was acquired with funds of the
partnership. The presumption applies even when the manner in which the property was acquired does not
appear.23 [Emphasis supplied.]
Thus, for purposes solely of this case and of resolving the issue of whether Kargo Enterprises as a sole
proprietorship is conjugal or paraphernal property, we hold that it is conjugal property.
Article 124 of the Family Code, on the administration of the conjugal property, provides:
Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both
spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court
by the wife for proper remedy, which must be availed of within five years from the date of the contract
implementing such decision.
xxx
This provision, by its terms, allows either Karen or Glenn Go to speak and act with authority in managing
their conjugal property, i.e., Kargo Enterprises. No need exists, therefore, for one to obtain the consent of
the other before performing an act of administration or any act that does not dispose of or encumber their
conjugal property.
Under Article 108 of the Family Code, the conjugal partnership is governed by the rules on the contract of
partnership in all that is not in conflict with what is expressly determined in this Chapter or by the spouses in
their marriage settlements. In other words, the property relations of the husband and wife shall be governed
primarily by Chapter 4 on Conjugal Partnership of Gains of the Family Code and, suppletorily, by the
spouses’ marriage settlement and by the rules on partnership under the Civil Code. In the absence of any
evidence of a marriage settlement between the spouses Go, we look at the Civil Code provision on
partnership for guidance.
A rule on partnership applicable to the spouses’ circumstances is Article 1811 of the Civil Code, which
states:
Art. 1811. A partner is a co-owner with the other partners of specific partnership property.
The incidents of this co-ownership are such that:
(1) A partner, subject to the provisions of this Title and to any agreement between the partners, has an equal
right with his partners to possess specific partnership property for partnership purposes; xxx
Under this provision, Glenn and Karen Go are effectively co-owners of Kargo Enterprises and the properties
registered under this name; hence, both have an equal right to seek possession of these properties. Applying
Article 484 of the Civil Code, which states that "in default of contracts, or special provisions, co-ownership
shall be governed by the provisions of this Title," we find further support in Article 487 of the Civil Code
that allows any of the co-owners to bring an action in ejectment with respect to the co-owned property.
While ejectment is normally associated with actions involving real property, we find that this rule can be
applied to the circumstances of the present case, following our ruling in Carandang v. Heirs of De
Guzman.24 In this case, one spouse filed an action for the recovery of credit, a personal property considered
conjugal property, without including the other spouse in the action. In resolving the issue of whether the
other spouse was required to be included as a co-plaintiff in the action for the recovery of the credit, we said:
Milagros de Guzman, being presumed to be a co-owner of the credits allegedly extended to the spouses
Carandang, seems to be either an indispensable or a necessary party. If she is an indispensable party,
dismissal would be proper. If she is merely a necessary party, dismissal is not warranted, whether or not
there was an order for her inclusion in the complaint pursuant to Section 9, Rule 3.
Article 108 of the Family Code provides:
Art. 108. The conjugal partnership shall be governed by the rules on the contract of partnership in all that is
not in conflict with what is expressly determined in this Chapter or by the spouses in their marriage
settlements.
This provision is practically the same as the Civil Code provision it superseded:
Art. 147. The conjugal partnership shall be governed by the rules on the contract of partnership in all that is
not in conflict with what is expressly determined in this Chapter.
In this connection, Article 1811 of the Civil Code provides that "[a] partner is a co-owner with the other
partners of specific partnership property." Taken with the presumption of the conjugal nature of the funds
used to finance the four checks used to pay for petitioners’ stock subscriptions, and with the presumption
that the credits themselves are part of conjugal funds, Article 1811 makes Quirino and Milagros de Guzman
co-owners of the alleged credit.
Being co-owners of the alleged credit, Quirino and Milagros de Guzman may separately bring an action for
the recovery thereof. In the fairly recent cases of Baloloy v. Hular and Adlawan v. Adlawan, we held that, in
a co-ownership, co-owners may bring actions for the recovery of co-owned property without the necessity of
joining all the other co-owners as co-plaintiffs because the suit is presumed to have been filed for the benefit
of his co-owners. In the latter case and in that of De Guia v. Court of Appeals, we also held that Article 487
of the Civil Code, which provides that any of the co-owners may bring an action for ejectment, covers all
kinds of action for the recovery of possession.
In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to Article
487 of the Civil Code and relevant jurisprudence, any one of them may bring an action, any kind of action,
for the recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-owner who
filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other co-
owners are not indispensable parties. They are not even necessary parties, for a complete relief can be
100
accorded in the suit even without their participation, since the suit is presumed to have been filed for the
benefit of all co-owners.25 [Emphasis supplied.]
Under this ruling, either of the spouses Go may bring an action against Navarro to recover possession of the
Kargo Enterprises-leased vehicles which they co-own. This conclusion is consistent with Article 124 of the
Family Code, supporting as it does the position that either spouse may act on behalf of the conjugal
partnership, so long as they do not dispose of or encumber the property in question without the other
spouse’s consent.
On this basis, we hold that since Glenn Go is not strictly an indispensable party in the action to recover
possession of the leased vehicles, he only needs to be impleaded as a pro-forma party to the suit, based on
Section 4, Rule 4 of the Rules, which states:
Section 4. Spouses as parties. – Husband and wife shall sue or be sued jointly, except as provided by law.
Non-joinder of indispensable parties not ground to dismiss action
Even assuming that Glenn Go is an indispensable party to the action, we have held in a number of
cases26 that the misjoinder or non-joinder of indispensable parties in a complaint is not a ground for
dismissal of action. As we stated in Macababbad v. Masirag:27
Rule 3, Section 11 of the Rules of Court provides that neither misjoinder nor nonjoinder of parties is a
ground for the dismissal of an action, thus:
Sec. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor non-joinder of parties is ground for
dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on
its own initiative at any stage of the action and on such terms as are just. Any claim against a misjoined
party may be severed and proceeded with separately.
In Domingo v. Scheer, this Court held that the proper remedy when a party is left out is to implead the
indispensable party at any stage of the action. The court, either motu proprio or upon the motion of a party,
may order the inclusion of the indispensable party or give the plaintiff opportunity to amend his complaint in
order to include indispensable parties. If the plaintiff to whom the order to include the indispensable party is
directed refuses to comply with the order of the court, the complaint may be dismissed upon motion of the
defendant or upon the court's own motion. Only upon unjustified failure or refusal to obey the order to
include or to amend is the action dismissed.
In these lights, the RTC Order of July 26, 2000 requiring plaintiff Karen Go to join her husband as a party
plaintiff is fully in order.
Demand not required prior
to filing of replevin action
In arguing that prior demand is required before an action for a writ of replevin is filed, Navarro apparently
likens a replevin action to an unlawful detainer.
For a writ of replevin to issue, all that the applicant must do is to file an affidavit and bond, pursuant to
Section 2, Rule 60 of the Rules, which states:
Sec. 2. Affidavit and bond.
The applicant must show by his own affidavit or that of some other person who personally knows the facts:
(a) That the applicant is the owner of the property claimed, particularly describing it, or is entitled to the
possession thereof;
(b) That the property is wrongfully detained by the adverse party, alleging the cause of detention thereof
according to the best of his knowledge, information, and belief;
(c) That the property has not been distrained or taken for a tax assessment or a fine pursuant to law, or
seized under a writ of execution or preliminary attachment, or otherwise placed under custodia legis, or if
so seized, that it is exempt from such seizure or custody; and
(d) The actual market value of the property.
The applicant must also give a bond, executed to the adverse party in double the value of the property as
stated in the affidavit aforementioned, for the return of the property to the adverse party if such return be
adjudged, and for the payment to the adverse party of such sum as he may recover from the applicant in the
action.
We see nothing in these provisions which requires the applicant to make a prior demand on the possessor of
the property before he can file an action for a writ of replevin. Thus, prior demand is not a condition
precedent to an action for a writ of replevin.
More importantly, Navarro is no longer in the position to claim that a prior demand is necessary, as he has
already admitted in his Answers that he had received the letters that Karen Go sent him, demanding that he
either pay his unpaid obligations or return the leased motor vehicles. Navarro’s position that a demand is
necessary and has not been made is therefore totally unmeritorious.
WHEREFORE, premises considered, we DENY the petition for review for lack of merit. Costs against
petitioner Roger V. Navarro.
SO ORDERED.

101
 THIRD DIVISION
G.R. No. 182963 June 3, 2013
SPOUSES DEO AGNER and MARICON AGNER, Petitioners,
vs.
BPI FAMILY SAVINGS BANK, INC., Respondent.
DECISION
PERALTA, J.:
This is a petition for review on certiorari assailing the April 30, 2007 Decision 1 and May 19, 2008
Resolution2of the Court of Appeals in CAG.R. CV No. 86021, which affirmed the August 11, 2005
Decision3 of the Regional Trial Court, Branch 33, Manila City.
On February 15, 2001, petitioners spouses Deo Agner and Maricon Agner executed a Promissory Note with
Chattel Mortgage in favor of Citimotors, Inc. The contract provides, among others, that: for receiving the
amount of Php834, 768.00, petitioners shall pay Php 17,391.00 every 15th day of each succeeding month
until fully paid; the loan is secured by a 2001 Mitsubishi Adventure Super Sport; and an interest of 6% per
month shall be imposed for failure to pay each installment on or before the stated due date. 4
On the same day, Citimotors, Inc. assigned all its rights, title and interests in the Promissory Note with
Chattel Mortgage to ABN AMRO Savings Bank, Inc. (ABN AMRO), which, on May 31, 2002, likewise
assigned the same to respondent BPI Family Savings Bank, Inc. 5
For failure to pay four successive installments from May 15, 2002 to August 15, 2002, respondent, through
counsel, sent to petitioners a demand letter dated August 29, 2002, declaring the entire obligation as due and
demandable and requiring to pay Php576,664.04, or surrender the mortgaged vehicle immediately upon
receiving the letter.6 As the demand was left unheeded, respondent filed on October 4, 2002 an action for
Replevin and Damages before the Manila Regional Trial Court (RTC).
A writ of replevin was issued.7 Despite this, the subject vehicle was not seized.8 Trial on the merits ensued.
On August 11, 2005, the Manila RTC Br. 33 ruled for the respondent and ordered petitioners to jointly and
severally pay the amount of Php576,664.04 plus interest at the rate of 72% per annum from August 20, 2002
until fully paid, and the costs of suit.
Petitioners appealed the decision to the Court of Appeals (CA), but the CA affirmed the lower court’s
decision and, subsequently, denied the motion for reconsideration; hence, this petition.
Before this Court, petitioners argue that: (1) respondent has no cause of action, because the Deed of
Assignment executed in its favor did not specifically mention ABN AMRO’s account receivable from
petitioners; (2) petitioners cannot be considered to have defaulted in payment for lack of competent proof
that they received the demand letter; and (3) respondent’s remedy of resorting to both actions of replevin
and collection of sum of money is contrary to the provision of Article 1484 9 of the Civil Code and the Elisco
Tool Manufacturing Corporation v. Court of Appeals10ruling.
The contentions are untenable.
With respect to the first issue, it would be sufficient to state that the matter surrounding the Deed of
Assignment had already been considered by the trial court and the CA. Likewise, it is an issue of fact that is
not a proper subject of a petition for review under Rule 45. An issue is factual when the doubt or difference
arises as to the truth or falsehood of alleged facts, or when the query 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.11 Time and
again, We stress that this Court is not a trier of facts and generally does not weigh anew evidence which
lower courts have passed upon.
As to the second issue, records bear that both verbal and written demands were in fact made by respondent
prior to the institution of the case against petitioners.12 Even assuming, for argument’s sake, that no demand
letter was sent by respondent, there is really no need for it because petitioners legally waived the necessity
of notice or demand in the Promissory Note with Chattel Mortgage, which they voluntarily and knowingly
signed in favor of respondent’s predecessor-in-interest. Said contract expressly stipulates:
102
In case of my/our failure to pay when due and payable, any sum which I/We are obliged to pay under this
note and/or any other obligation which I/We or any of us may now or in the future owe to the holder of this
note or to any other party whether as principal or guarantor x x x then the entire sum outstanding under this
note shall, without prior notice or demand, immediately become due and payable. (Emphasis and
underscoring supplied)
A provision on waiver of notice or demand has been recognized as legal and valid in Bank of the Philippine
Islands v. Court of Appeals,13 wherein We held:
The Civil Code in Article 1169 provides that one incurs in delay or is in default from the time the obligor
demands the fulfillment of the obligation from the obligee. However, the law expressly provides that
demand is not necessary under certain circumstances, and one of these circumstances is when the parties
expressly waive demand. Hence, since the co-signors expressly waived demand in the promissory notes,
demand was unnecessary for them to be in default. 14
Further, the Court even ruled in Navarro v. Escobido 15 that prior demand is not a condition precedent to an
action for a writ of replevin, since there is nothing in Section 2, Rule 60 of the Rules of Court that requires
the applicant to make a demand on the possessor of the property before an action for a writ of replevin could
be filed.
Also, petitioners’ representation that they have not received a demand letter is completely inconsequential as
the mere act of sending it would suffice. Again, We look into the Promissory Note with Chattel Mortgage,
which provides:
All correspondence relative to this mortgage, including demand letters, summonses, subpoenas, or
notifications of any judicial or extrajudicial action shall be sent to the MORTGAGOR at the address
indicated on this promissory note with chattel mortgage or at the address that may hereafter be given in
writing by the MORTGAGOR to the MORTGAGEE or his/its assignee. The mere act of sending any
correspondence by mail or by personal delivery to the said address shall be valid and effective notice to the
mortgagor for all legal purposes and the fact that any communication is not actually received by the
MORTGAGOR or that it has been returned unclaimed to the MORTGAGEE or that no person was found at
the address given, or that the address is fictitious or cannot be located shall not excuse or relieve the
MORTGAGOR from the effects of such notice.16 (Emphasis and underscoring supplied)
The Court cannot yield to petitioners’ denial in receiving respondent’s demand letter. To note, their postal
address evidently remained unchanged from the time they executed the Promissory Note with Chattel
Mortgage up to time the case was filed against them. Thus, the presumption that "a letter duly directed and
mailed was received in the regular course of the mail"17 stands in the absence of satisfactory proof to the
contrary.
Petitioners cannot find succour from Ting v. Court of Appeals18 simply because it pertained to violation of
Batas Pambansa Blg. 22 or the Bouncing Checks Law. As a higher quantum of proof – that is, proof beyond
reasonable doubt – is required in view of the criminal nature of the case, We found insufficient the mere
presentation of a copy of the demand letter allegedly sent through registered mail and its corresponding
registry receipt as proof of receiving the notice of dishonor.
Perusing over the records, what is clear is that petitioners did not take advantage of all the opportunities to
present their evidence in the proceedings before the courts below. They miserably failed to produce the
original cash deposit slips proving payment of the monthly amortizations in question. Not even a photocopy
of the alleged proof of payment was appended to their Answer or shown during the trial. Neither have they
demonstrated any written requests to respondent to furnish them with official receipts or a statement of
account. Worse, petitioners were not able to make a formal offer of evidence considering that they have not
marked any documentary evidence during the presentation of Deo Agner’s testimony. 19
Jurisprudence abounds that, in civil cases, one who pleads payment has the burden of proving it; the burden
rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment.20 When the
creditor is in possession of the document of credit, proof of non-payment is not needed for it is
presumed.21 Respondent's possession of the Promissory Note with Chattel Mortgage strongly buttresses its
claim that the obligation has not been extinguished. As held in Bank of the Philippine Islands v. Spouses
Royeca:22
x x x The creditor's possession of the evidence of debt is proof that the debt has not been discharged by
payment. A promissory note in the hands of the creditor is a proof of indebtedness rather than proof of
payment. In an action for replevin by a mortgagee, it is prima facie evidence that the promissory note has
not been paid. Likewise, an uncanceled mortgage in the possession of the mortgagee gives rise to the
presumption that the mortgage debt is unpaid.23
Indeed, when the existence of a debt is fully established by the evidence contained in the record, the burden
of proving that it has been extinguished by payment devolves upon the debtor who offers such defense to the
claim of the creditor.24 The debtor has the burden of showing with legal certainty that the obligation has
been discharged by payment.25
Lastly, there is no violation of Article 1484 of the Civil Code and the Court’s decision in Elisco Tool
Manufacturing Corporation v. Court of Appeals.26
In Elisco, petitioner's complaint contained the following prayer:
WHEREFORE, plaintiffs pray that judgment be rendered as follows:
ON THE FIRST CAUSE OF ACTION
Ordering defendant Rolando Lantan to pay the plaintiff the sum of ₱39,054.86 plus legal interest from the
date of demand until the whole obligation is fully paid;
ON THE SECOND CAUSE OF ACTION
To forthwith issue a Writ of Replevin ordering the seizure of the motor vehicle more particularly described
in paragraph 3 of the Complaint, from defendant Rolando Lantan and/or defendants Rina Lantan, John Doe,
Susan Doe and other person or persons in whose possession the said motor vehicle may be found, complete
with accessories and equipment, and direct deliver thereof to plaintiff in accordance with law, and after due
hearing to confirm said seizure and plaintiff's possession over the same;
PRAYER COMMON TO ALL CAUSES OF ACTION
1. Ordering the defendant Rolando Lantan to pay the plaintiff an amount equivalent to twenty-five
percent (25%) of his outstanding obligation, for and as attorney's fees;
2. Ordering defendants to pay the cost or expenses of collection, repossession, bonding fees and
other incidental expenses to be proved during the trial; and
3. Ordering defendants to pay the costs of suit.
Plaintiff also prays for such further reliefs as this Honorable Court may deem just and equitable under the
premises.27
The Court therein ruled:
The remedies provided for in Art. 1484 are alternative, not cumulative. The exercise of one bars the exercise
of the others. This limitation applies to contracts purporting to be leases of personal property with option to
buy by virtue of Art. 1485. The condition that the lessor has deprived the lessee of possession or enjoyment
of the thing for the purpose of applying Art. 1485 was fulfilled in this case by the filing by petitioner of the
complaint for replevin to recover possession of movable property. By virtue of the writ of seizure issued by
the trial court, the deputy sheriff seized the vehicle on August 6, 1986 and thereby deprived private
respondents of its use. The car was not returned to private respondent until April 16, 1989, after two (2)
years and eight (8) months, upon issuance by the Court of Appeals of a writ of execution.
Petitioner prayed that private respondents be made to pay the sum of ₱39,054.86, the amount that they were
supposed to pay as of May 1986, plus interest at the legal rate. At the same time, it prayed for the issuance
of a writ of replevin or the delivery to it of the motor vehicle "complete
with accessories and equipment." In the event the car could not be delivered to petitioner, it was prayed that
private respondent Rolando Lantan be made to pay petitioner the amount of ₱60,000.00, the "estimated
actual value" of the car, "plus accrued monthly rentals thereof with interests at the rate of fourteen percent
(14%) per annum until fully paid." This prayer of course cannot be granted, even assuming that private
103
respondents have defaulted in the payment of their obligation. This led the trial court to say that petitioner
wanted to eat its cake and have it too.28
In contrast, respondent in this case prayed:
(a) Before trial, and upon filing and approval of the bond, to forthwith issue a Writ of Replevin
ordering the seizure of the motor vehicle above-described, complete with all its accessories and
equipments, together with the Registration Certificate thereof, and direct the delivery thereof to
plaintiff in accordance with law and after due hearing, to confirm the said seizure;
(b) Or, in the event that manual delivery of the said motor vehicle cannot be effected to render
judgment in favor of plaintiff and against defendant(s) ordering them to pay to plaintiff, jointly and
severally, the sum of ₱576,664.04 plus interest and/or late payment charges thereon at the rate of
72% per annum from August 20, 2002 until fully paid;
(c) In either case, to order defendant(s) to pay jointly and severally:
(1) the sum of ₱297,857.54 as attorney’s fees, liquidated damages, bonding fees and
other expenses incurred in the seizure of the said motor vehicle; and
(2) the costs of suit.
Plaintiff further prays for such other relief as this Honorable Court may deem just and equitable in the
premises.29
Compared with Elisco, the vehicle subject matter of this case was never recovered and delivered to
respondent despite the issuance of a writ of replevin. As there was no seizure that transpired, it cannot be
said that petitioners were deprived of the use and enjoyment of the mortgaged vehicle or that respondent
pursued, commenced or concluded its actual foreclosure. The trial court, therefore, rightfully granted the
alternative prayer for sum of money, which is equivalent to the remedy of "exacting fulfillment of the
obligation." Certainly, there is no double recovery or unjust enrichment 30 to speak of.1âwphi1
All the foregoing notwithstanding, We are of the opinion that the interest of 6% per month should be
equitably reduced to one percent (1%) per month or twelve percent (12%) per annum, to be reckoned from
May 16, 2002 until full payment and with the remaining outstanding balance of their car loan as of May 15,
2002 as the base amount.
Settled is the principle which this Court has affirmed in a number of cases that stipulated interest rates of
three percent (3%) per month and higher are excessive, iniquitous, unconscionable, and exorbitant. 31 While
Central Bank Circular No. 905-82, which took effect on January 1, 1983, effectively removed the ceiling on
interest rates for both secured and unsecured loans, regardless of maturity, nothing in the said circular could
possibly be read as granting carte blanche authority to lenders to raise interest rates to levels which would
either enslave their borrowers or lead to a hemorrhaging of their assets. 32 Since the stipulation on the interest
rate is void for being contrary to morals, if not against the law, it is as if there was no express contract on
said interest rate; thus, the interest rate may be reduced as reason and equity demand. 33
WHEREFORE, the petition is DENIED and the Court AFFIRMS WITH MODIFICATION the April 30,
2007 Decision and May 19, 2008 Resolution of the Court of Appeals in CA-G.R. CV No. 86021. Petitioners
spouses Deo Agner and Maricon Agner are ORDERED to pay, jointly and severally, respondent BPI Family
Savings Bank, Inc. ( 1) the remaining outstanding balance of their auto loan obligation as of May 15, 2002
with interest at one percent ( 1 o/o) per month from May 16, 2002 until fully paid; and (2) costs of suit.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 127578 February 15, 1999
MANUEL DE ASIS, petitioner,
vs.
COURT OF APPEALS, HON. JAIME T. HAMOY, Branch 130, RTC, Kalookan City and GLEN CAMIL
ANDRES DE ASIS represented by her mother/guardian VIRCEL D. ANDRES, respondents.
PURISIMA, J.:
Petition for certiorari under Rule 65 oft he Revised Rules of Court seeking to nullify the decision of the
Court of Appeals which affirmed the trial court's Orders, dated November 25, 1993 and February 4, 1994,
respectively, denying petitioner's Motion to Dismiss the Complaint in Civil Case No. C-16107, entitled
"Glen Camil Andres de Asis, etc. vs. Manuel de Asis", and the motion for reconsideration.
The pertinent facts leading to the filing of the petition at bar are as follows:
On October 14, 1988, Vircel D. Andres, (the herein private respondent) in her capacity as the legal guardian
of the minor, Glen Camil Andres de Asis, brought an action for maintenance and support against Manuel de
Asis, docketed as Civil Case No. Q-88-935 before the Regional Trial Court of Quezon City, Branch 94,
alleging that the defendant Manuel de Asis (the petitioner here) is the father of subject minor Glen Camil
Andres de Asis, and the former refused and/or failed to provide for the maintenance of the latter, despite
repeated demands.
In his Answer, petitioner denied his paternity of the said minor and theorized that he cannot therefore be
required to provide support for him.
On July 4, 1989, private respondent Vircel D. Andres, through counsel, sent in a manifestation the pertinent
portion of which, reads;
1. That this proposed Amended Answer, defendant (herein petitioner) has made a judicial
admission/declaration that "1). defendant denies that the said minor child (Glen Camil) is
his child 2) he (petitioner) has no obligation to the plaintiff Glen Camil . . .
2. That with the aforesaid judicial admission/declarations by the defendant, it seems futile
and a useless exercise to claim support from said defendant.
3. That under the foregoing circumstances it would be more practical that plaintiff
withdraws the complains against the defendant subject to the condition that the defendant
should not pursue his counterclaim in the above-entitled case, . . . 1
By virtue of the said manifestation, both the plaintiff and the defendant agreed to move for the dismissal of
the case. Acting thereupon, the Regional Trial Court a quo issued the following Order of August 8, 1989,
dismissing Civil Case No. Q-88-935 with prejudice, to wit:
Acting on the manifestation of Atty. Romualdo C. delos Santos, counsel for the
defendant, that counsel for the plaintiff Atty. Ismael J. Andres has no objection that this
case be withdrawn provided that the defendant will withdraw the counterclaim, as prayed
for, let the case be dismissed with prejudice.
SO ORDERED.2
On September 7, 1995, another Complaint for maintenance and support was brought against Manuel A. de
Asis, this time in the name of Glen Camil Andres de Asis, represented by her legal guardian/mother, Vircel
D. Andres. Docketed as Civil Case No. C-16107 before Branch 130 of the Regional Trial Court of
Kalookan, the said Complaint prayed, thus:
WHEREFORE, premises considered, it is respectfully prayed that judgment be rendered
ordering defendant:
104
1. To pay plaintiff the sum of not less than P2,000.00 per month for every month since
June 1, 1987 as support in arrears which defendant failed to provide plaintiff shortly after
her birth in June 1987 up to present;
2. To give plaintiff a monthly allowance of P5,000.00 to be paid in advance on or before
the 5th of each and every month.
3. To give plaintiff by way of support pendente lite a monthly allowance of P5,000.00 per
month, the first monthly allowance to start retroactively from the first day of this month
and the subsequent ones to be paid in advance on or before the 5th of each succeeding
month.
4. To pay the costs of suit.
Plaintiff prays for such other relief just and equitable under the premises. 3
On October 8, 1993, petitioner moved to dismiss the Complaint on the ground of res judicata, alleging that
Civil Case C-16107 is barred by the prior judgment which dismissed with prejudice Civil Case Q -88-935.
In the Order dated November 25, 1993 denying subject motion to dismiss, the trial court ruled that res
judicata is inapplicable in an action for support for the reason that renunciation or waiver of future support
is prohibited by law. Petitioner's motion for reconsideration of the said Order met the same fate. It was
likewise denied.
Petitioner filed with the Court of Appeals a Petition for Certiorari. But on June 7, 1996, the Court of
Appeals found that the said Petition devoid of merit and dismissed the same.
Undaunted, petitioner found his way to this court via the present petition, posing the question whether or not
the public respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
upholding the denial of the motion to dismiss by the trial court, and holding that an action for support cannot
be barred by res judicata.
To buttress his submission, petitioner invokes the previous dismissal of the Complaint for maintenance and
support, Civil Case Q-88-935, filed by the mother and guardian of the minor, Glen Camil Andres de Asis,
(the herein private respondent). In said case, the complainant manifested that because of the defendant's
judicial declaration denying that he is the father of subject minor child, it was "futile and a useless exercise
to claim support from defendant". Because of such manifestation, and defendant's assurance that he would
not pursue his counterclaim anymore, the parties mutually agreed to move for the dismissal of the
complaint. The motion was granted by the Quezon City Regional Trial Court, which then dismissed the case
with prejudice.
Petitioner contends that the aforecited manifestation, in effect admitted the lack of filiation between him and
the minor child, which admission binds the complainant, and since the obligation to give support is based on
the existence of paternity and filiation between the child and the putative parent, the lack thereof negates the
right to claim for support. Thus, petitioner maintains that the dismissal of the Complaint by the lower court
on the basis of the said manifestation bars the present action for support, especially so because the order of
the trial court explicitly stated that the dismissal of the case was with prejudice.
The petition is not impressed with merit.
The right to receive support can neither be renounced nor transmitted to a third person. Article 301 of the
Civil Code, the law in point, reads:
Art. 301. The right to receive support cannot be renounced, nor can it be transmitted to a third person.
Neither can it be compensated with what the recipient owes the obligor...
Furthermore, future support cannot be the subject of a compromise.
Art. 2035, ibid, provides, that:
No compromise upon the following questions shall be valid:
(1) The civil status of persons;
(2) The validity of a marriage or legal separation;
(3) Any ground for legal separation
(4) Future support;
 (5) The jurisdiction of courts;
(6) Future legitime.
The raison d' etre behind the proscription against renunciation, transmission and/or compromise of the right
to support is stated, thus:
The right to support being founded upon the need of the recipient to maintain his existence, he is not
entitled to renounce or transfer the right for this would mean sanctioning the voluntary giving up of life
itself. The right to life cannot be renounce; hence, support which is the means to attain the former, cannot
be renounced.
xxx xxx xxx
To allow renunciation or transmission or compensation of the family right of a person to support is
virtually to allow either suicide or the conversion of the recipient to a public burden. This is contrary to
public policy. 4
In the case at bar, respondent minor's mother, who was the plaintiff in the first case, manifested that she was
withdrawing the case as it seemed futile to claim support from petitioner who denied his paternity over the
child. Since the right to claim for support is predicated on the existence of filiation between the minor child
and the putative parent, petitioner would like us to believe that such manifestation admitting the futility of
claiming support from him puts the issue to rest and bars any and all future complaint for support.
The manifestation sent in by respondent's mother in the first case, which acknowledged that it would be
useless to pursue its complaint for support, amounted to renunciation as it severed the vinculum that gives
the minor, Glen Camil, the right to claim support from his putative parent, the petitioner. Furthermore, the
agreement entered into between the petitioner and respondent's mother for the dismissal of the complaint for
maintenance and support conditioned upon the dismissal of the counterclaim is in the nature of a
compromise which cannot be countenanced. It violates the prohibition against any compromise of the right
to support.
Thus, the admission made by counsel for the wife of the facts alleged in a motion of the husband,
in which the latter prayed that his obligation to support be extinguished cannot be considered as an
assent to the prayer, and much less, as a waiver of the right to claim for support. 5
It is true that in order to claim support, filiation and/or paternity must first be shown between the claimant
and the parent. However, paternity and filiation or the lack of the same is a relationship that must be
judicially established and it is for the court to declare its existence or absence. It cannot be left to the will or
agreement of the parties.
The civil status of a son having been denied, and this civil status, from which the right to
support is derived being in issue, it is apparent that no effect can be .given to such a claim
until an authoritative declaration has been made as to the existence of the cause. 6
Although in the case under scrutiny, the admission may be binding upon the respondent, such an admission
is at most evidentiary and does not conclusively establish the lack of filiation.
Neither are we persuaded by petitioner's theory that the dismissal with prejudice of Civil Case Q-88-935 has
the effect of res judicata on the subsequent case for support. The case of Advincula vs. Advincula 7 comes to
the fore. In Advincula, the minor, Manuela Advincula, instituted a case for acknowledgment and support
against her putative father, Manuel Advincula. On motion of both parties and for the reason that
the "plaintiff has lost interest and is no longer interested in continuing the case against the defendant and has
no further evidence to introduce in support of the complaint", the case was dismissed. Thereafter, a similar
case was instituted by Manuela, which the defendant moved to dismiss, theorizing that the dismissal of the
first case precluded the filing of the second case.
In disposing such case, this Court ruled, thus:
The new Civil Code provides that the allowance for support is provisional because the amount may be
increased or decreased depending upon the means of the giver and the needs of the recipient (Art.
297); and that the right to receive support cannot be renounced nor can it be transmitted to a third
person neither can it be compensated with what the recipient owes the obligator (Art .301).
105
Furthermore, the right to support can not be waived or transferred to third parties and future support
cannot be the subject of compromise (Art. 2035; Coral v. Gallego, 38 O.G. 3135, cited in IV Civil
Code by Padilla, p. 648; 1956 Ed.). This being true, it is indisputable that the present action for support
can be brought, notwithstanding the fact the previous case filed against the same defendant was
dismissed. And it also appearing that the dismissal of Civil Case No. 3553, was not an adjudication
upon the merits, as heretofore shown, the right of herein plaintiff-appellant to reiterate her suit for
support and acknowledgment is available, as her needs arise. Once the needs of plaintiff arise, she has
the right to bring an action for support, for it is only then that her cause for action is accrues.. . .
xxx xxx xxx
It appears that the former dismissal was predicated upon compromise. Acknowledgment, affecting as it
does the civil status of a persons and future support, cannot be the subject of compromise (pars. 1 & 4,
Art. 2035, Civil Code). Hence, the first dismissal cannot have force and effect and can not bar the
filing of another action, asking for the same relief against the same defendant. (emphasis supplied).
Conformably, notwithstanding the dismissal of Civil Case Q-88-935 and the lower court's pronouncement
that such dismissal was with prejudice, the second action for support may still prosper.
WHEREFORE, the petition under consideration is hereby DISMISSED and the decision of the Court of
Appeals AFFIRMED. No pronouncement as to costs.SO ORDERED.
EN BANC
G.R. No. 128157 September 29, 1999
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
MANUEL MANAHAN, alias "Maning," defendant-appellant.
BELLOSILLO, J.:
MANUEL MANAHAN alias Maning was found guilty of rape and sentenced to death by the court a quo.
He was also ordered to indemnify the victim P50,000.00 as moral damages, pay the costs, and acknowledge
and support the offspring of his indiscretion. 1 This case is now before us on automatic review.
Complainant Teresita Tibigar, 16 years old, worked at the Espiritu Canteen in Dagupan City. As a stay-in
waitress she slept at the second floor of the canteen. Manuel Manahan is the brother-in-law of Josefina
Espiritu, owner of the canteen. His wife Primadonna is the sister of Josefina Espiritu. Manuel and
Primadonna temporarily reside at the canteen together with the family of Josefina as Primadonna was then
pregnant.
On 5 January 1995, at about two o'clock in the morning, Teresita who was asleep was suddenly awakened
when she felt someone beside her. Upon opening her eyes she saw accused Manuel Manahan as he
immediately placed himself on top of her. She tried to shout but the accused covered her mouth. He then
forcibly spread her legs. She cried; she pushed and kicked him many times in an effort to free herself but the
accused proved too strong for her. Soon enough she became weary and exhausted. Her condition enabled the
accused to pursue his immoral intentions. He lifted her skirt, removed her panty and then inserted his penis
into her vagina. He succeeded in having carnal knowledge of her. After satisfying his lust, the accused
warned the victim not to report the incident to anyone and threatened her that should she squeal he would
kill her and her family. Thereafter, he left her. She was terribly afraid and shaken and could do nothing but
cry until dawn. 2
Within the month Teresita left the canteen and returned home to her parents in Mangaldan, Pangasinan. The
sexual encounter resulted in her pregnancy. When her parents discovered it and learned of her story, they
brought her to the hospital where she was examined by Dr. Casimero Bacugan. From there they proceeded
to the police station where a statement of Teresita was taken by SPO1 Isagani L. Ico. Police Chief Inspector
Wendy G. Rosario later endorsed the complaining witness to the Office of the City Prosecutor of Dagupan
City for appropriate legal action. Thereafter, with the assistance of her mother, Teresita filed a criminal
complaint accusing Manuel Manahan alias Maning of rape. 3
Meanwhile, on 2 October 1995, she gave birth to a healthy baby girl and christened her Melanie Tibigar.
Accused Manuel Manahan has a different story. He denied having raped Teresita. He claimed they were
lovers. According to him, he met Teresita at the Espiritu Canteen in August 1994 and began courting her.
Subsequently, they became sweethearts and their first sexual intercourse occurred on 27 December 1994
followed by another on 28 December 1994. In the first week of January 1995 they again had a tryst in the
house of Teresita's Aunt Fely, their last intercourse being on 7 May 1995 in the house of one Maura
Manahan-Quinto, his sister.
Manuel further alleged that even after Teresita left the Espiritu Canteen there were several occasions when
they saw each other in front of the DBP in Dagupan City. In one of those assignations Teresita allegedly told
him that she wanted to have the child aborted as her father might kill her if he discovered she was pregnant,
but accused did not agree.
In September 1995, the accused was arrested in connection with the case filed by Teresita but was later
released. We fail to discern from the records the reason for his release. But on 15 March 1996 he was again
arrested and detained at the Dagupan City Jail where Estrella, Teresita's mother, supposedly visited him at
least five (5) times to ask about his condition and whether he was tortured in detention. The accused
maintained that Estrella was trying to conceal Teresita's condition from her father. She purportedly proposed
to the accused to sell his land and give the proceeds to Teresita's father as a form of settlement.
The accused assails in his appeal brief the credibility of the complaining witness. He asserts that the
prosecution failed to prove his guilt beyond reasonable doubt and reiterates that he and the complaining
witness were lovers, and that their sexual congress was consensual.
We have painstakingly reviewed the records and we sustain the conviction of the accused. The prosecution
for rape almost always involves sharply contrasting and irreconcilable declarations of the victim and the
accused. At the heart of almost all rape cases is the issue of credibility of the witnesses, to be resolved
primarily by the trial court which is in a better position to decide the question, having heard the witnesses
and observed their deportment and manner of testifying. Accordingly, its findings are entitled to the highest
degree of respect and will not be disturbed on appeal in the absence of any showing that the trial court
overlooked, misunderstood or misapplied some facts or circumstances of weight or substance which would
otherwise affect the result of the case. The exception is nowhere perceivable in the present case.
The accused banks heavily on his "sweetheart theory," a usual defense in rape cases, and vigorously
maintains that the sexual intercourse between him and Teresita was but the culmination of a mutual passion.
But we find otherwise primarily because the accused miserably failed to prove that he and the complaining
witness indeed had a romantic liaison as this claim was categorically denied by her. Moreover, there was no
substantial evidence, e.g., love notes, mementos or pictures, presented to support it.
The testimony of defense witnesses Nelson de Venecia and Arvin Sereban that they used to see Manuel and
Teresita together in front of the DBP in Dagupan City, even if true, did not confirm that there was indeed an
amorous relationship between the two. 4 Likewise, the testimony of Isabel Remandaban, another defense
witness, that she saw the accused and the complaining witness embracing each other in the house of Maura
Manahan-Quinto can hardly be given weight. The trifling manner by which she answered the questions
propounded to her at the witness stand even prompted the trial court to remark that she was not serious with
her testimony. Thus —
COURT: This is not a joke. The penalty [for] the accused [if
convicted] is death. Do not testify here as if you are joking, or you will
be the one to [be] sen[t] to jail ahead of Manahan. You want to be sent
to jail?
WITNESS: No sir.
106
COURT: Why are you smiling? This is a serious matter. Put that on
record the witness is smiling. Not serious about her testimony
(emphasis supplied).
Ultimately, the trial court disregarded altogether, and rightly so, the testimony of Isabel Remandaban. To
emphasize, the task of assigning values to the testimonies of witnesses in the stand and weighing their
credibility is best left to the trial court which forms first-hand impressions of the witnesses testifying before
it, and therefore more competent to discriminate between the true and the false. 5 We find no trace of whim
or arbitrariness on the court a quo in its assessment of the testimony of this witness.
Also, Exh. "1" of the defense, a photograph showing Estrella talking to the accused while carrying Melanie,
the offspring of Teresita and Manuel, does not establish anything. As Estrella explained, she visited the
accused in jail not to show him Melanie but to ascertain that he was in fact incarcerated, 6 and that she only
brought the child with her incidentally during her visit because Teresita was sick at that time and there was
no one else to take care of the baby. 7
Even assuming ex gratia argumenti that the accused and the victim were really lovers, that fact alone would
not negate the commission of rape. A sweetheart cannot be forced to have sex against her will. Definitely, a
man cannot demand sexual gratification from a fiancee and, worse, employ violence upon her on the pretext
of love. Love is not a license for lust. 8
Equally untenable is the accused's contention that there can be no rape since the prosecution failed to prove
beyond reasonable doubt the element of intimidation. One of the modes of committing the crime of rape is
by having carnal knowledge of a woman using force and intimidation. Even if we concede the absence of
intimidation in this case, the fact remains that the accused employed force against his victim. Thus,
testifying in a clear, definitive and convincing manner as concluded by the trial court, Teresita established
beyond any scintilla of doubt the presence of force essential in rape —
Q: What were you doing then when Manuel Manahan accosted you?
A: I was sleeping, then suddenly I felt somebody near me and when I
opened my eyes I saw Manuel Manahan and then he immediately laid
on top of me, sir.
Q: How did you come to know that it was Manuel Manahan who
went, who laid on top of you?
A: I know him, sir.
Q: What did you do when Manuel Manahan laid on top of you?
A: I was about to shout but he covered my mouth and then he
immediately spread my legs, sir.
Q: What did you do when he did that to you?
A: I cried, sir.
Q: Before Manuel Manahan spread your legs, what did you do?
Before he was able to spread your legs?
A: I pushed him and I kicked him several times, sir.
Q: What happened when you pushed him and kicked him several
times ?
A: I got weakened because he was strong that is why he was able to
abuse me, sir.
Q: After Manuel Manahan was able to spread your legs, what did he
do?
A: And then he inserted his penis, sir . . . . 9
Again, during the cross-examination the victim recounted how she was forced to have sexual intercourse
with the accused, thus —
Q: Did you spread your legs voluntarily or did he force open your
legs?
 A: He forced me, sir.
Q: What did he do to force open your legs?
A: By the use of his legs, sir.
Q: He did that while he was on top of you?
A: Yes, sir.
Q: What legs did he use, was it the right leg or both legs?
A: Both legs, sir.
Q: You mentioned about crossing his legs and then forced open your
legs, will you please demonstrate how he forced open your legs by the
use of this pencil and ballpen illustrate your legs with these two other
ballpens where the legs of Manuel Manahan, will you please
demonstrate how he forced open his legs when you said first he put
together his legs and then open your legs, will you please do it?
A: He went on top of me and he put his legs between my legs and also
his legs, sir.
INTERPRETER: Witness, demonstrating by spreading both ends of
the ballpen.
Q: And then by doing so, by spreading his legs between your legs, he
was able to insert his penis?
A: Yes, sir.
Q: At that precise moment when he was on top of you and also your
legs, where was the right hand of Manuel Manahan?
A: He closed my mouth with his right hand.
Q: What about his left hand?
A: He used his left hand in pulling up my dress.
Q: At that precise moment when he was doing the push and pull, was
his right hand still with your mouth?
A: Yes, sir.
Q: What about his left hand after raising your skirt, what was his left
hand doing?
A: He was squeezing my neck, sir . . . .
Q: During your direct testimony you mentioned about having resisted
him, now, at what precise moment did you try to resist him?
A: When he went on top of me I struggled, sir.
Q: Were you able to dislodge him from being on top of you?
A: Yes, sir.
COURT: Then what did he do when you were able to dislodge him on
top of you?
A: He went again on top of me, sir.
Q: Did you again struggle to resist him or no more?
A: No more because I already felt weak, sir . . . . 10
Evidently, complainant offered a tenacious resistance to the criminal acts of the accused, but the serious
determination of the latter to accomplish what he intended to do eventually weakened complainant and
shocked her into insensibility. It is quite understandable that, at a tender age of 16 and innocent in the ways
of the world, complainant is no match to the accused, a 28-year old married man endowed with physical
strength she could not possibly overcome.
Neither could she shout to alert the other occupants of the house as the accused prevented her by covering
her mouth with his right hand. The accused however claims that complainant had the opportunity to shout
for help at that precise moment he was removing his pants and brief, but she did not. Suffice it to say, in this
107
connection, that not every victim of a crime can be expected to act reasonably and conformably with the
expectations of mankind. Different people react to similar situations dissimilarity. While the normal
response of a woman about to be defiled may be to shout and put up a wild struggle, others become virtually
catatonic because of the mental shock they experience and the fear engendered by the unexpected
occurrence. Yet it can never be successfully argued that the latter are any less sexual victims than the
former. 11
The failure of complainant to disclose the outrage on her person to anybody, including her parents, is due to
the threats on her life and that of her family. Indeed, one cannot expect her to act like an adult or a mature
experienced woman who would have the courage and intelligence to disregard the threat to her life and
complain immediately that she had been sexually assaulted. It is not uncommon for young girls to conceal
for sometime the assaults on their virtue because of the rapists' threats to their lives. Delay or vacillation in
making a criminal accusation does not necessarily impair the credibility of the witness if such delay is
satisfactorily explained, as in this
case. 12
In the instant case, the complaining witness may not have even filed the rape charge had she not become
pregnant. This Court has taken cognizance of the fact that many of the victims of rape never complain or file
criminal charges against the rapists. They prefer to bear the ignominy in painful silence rather than reveal
their shame to the world and risk the rapists' making good their threats to kill or hurt their victims. 13
That accused also asserts that the rape case is a mere face-saving device of the victim to escape the anger of
her father. Again, we are not convinced. It taxes credulity that a simple barrio lass 14 like the victim, a minor
and a mere elementary graduate at that, could contrive such an unthinkable solution to save herself from the
imagined wrath of her father; what is more, concoct such a good rape story convincing enough to withstand
the rigors of cross-examination, and sway the judge to impose on the accused the extreme penalty of death.
Indeed, it is very unlikely that the victim would make up a story of rape with all its attendant scandal and
humiliation. Considering the modesty and timidity of a typical Filipina, especially one from the rural areas,
it is hard to accept that the victim would fabricate facts which would seriously cast dishonor on her
maidenhood. No young Filipina of decent repute would publicly admit she had been raped unless that was
the truth. It is her natural instinct to protect her honor. As we have long held, when a woman says that she
has been raped, she says in effect all that is necessary to show that rape has been committed. Her testimony
is credible where she has no motive to testify against the
accused. 15
On the matter of acknowledgment and support of the child, a correction of the view of the court a quo is in
order. Article 345 of The Revised Penal Code provides that persons guilty of rape shall also be sentenced to
"acknowledge the offspring, unless the law should prevent him from doing so," and "in every case to support
the offspring." In the case before us, compulsory acknowledgment of the child Melanie Tibigar is not proper
there being a legal impediment in doing so as it appears that the accused is a married man. As pronounced
by this Court in People v. Guerrero, 16 the rule is that if the rapist is a married man, he cannot be compelled
to recognize the offspring of the crime, should there be any, as his child, whether legitimate or illegitimate."
Consequently, that portion of the judgment under review is accordingly deleted. In any case, we sustain that
part ordering the accused to support the child as it is in accordance with law.
Finally, we do not agree with the trial court that the proper penalty to be imposed on the accused is death, it
appearing that the crime committed was merely simple rape, i.e., not committed with or effectively qualified
by any of the circumstances enumerated under Art. 335 of The Revised Penal Code, as amended by Sec. 11,
RA 7659, under which the death penalty is authorized. 17 In this case, the proper imposable penalty should
only be reclusion perpetua.
WHEREFORE, the Decision of the Regional Trial Court of Dagupan City, Branch 40, dated 28 November
1996, convicting accused MANUEL MANAHAN alias Maning of the crime of rape is AFFIRMED subject
however to the modification that the death sentence imposed on the accused is reduced to reclusion
perpetua. The portion of the decision of the trial court ordering the accused, a married man, to acknowledge
the child Melanie Tibigar is DELETED being contrary to law and jurisprudence.
SO ORDERED.

108
 THIRD DIVISION
G.R. No. 163209 October 30, 2009
SPOUSES PRUDENCIO and FILOMENA LIM, Petitioners,
vs.
MA. CHERYL S. LIM, for herself and on behalf of her minor children LESTER EDWARD S. LIM,
CANDICE GRACE S. LIM, and MARIANO S. LIM, III, Respondents.
DECISION
CARPIO, J.:
The Case
For review1 is the Decision2 of the Court of Appeals, dated 28 April 2003, ordering petitioners Prudencio
and Filomena Lim (petitioners) to provide legal support to respondents Cheryl, Lester Edward, Candice
Grace and Mariano III, all surnamed Lim (respondents).
The Facts
In 1979, respondent Cheryl S. Lim (Cheryl) married Edward Lim (Edward), son of petitioners. Cheryl bore
Edward three children, respondents Lester Edward, Candice Grace and Mariano III. Cheryl, Edward and
their children resided at the house of petitioners in Forbes Park, Makati City, together with Edward’s ailing
grandmother, Chua Giak and her husband Mariano Lim (Mariano). Edward’s family business, which
provided him with a monthly salary of ₱6,000, shouldered the family expenses. Cheryl had no steady source
of income.
On 14 October 1990, Cheryl abandoned the Forbes Park residence, bringing the children with her (then all
minors), after a violent confrontation with Edward whom she caught with the in-house midwife of Chua
Giak in what the trial court described "a very compromising situation."3
Cheryl, for herself and her children, sued petitioners, Edward, Chua Giak and Mariano (defendants) in the
Regional Trial Court of Makati City, Branch 140 (trial court) for support. The trial court ordered Edward to
provide monthly support of ₱6,000 pendente lite. 4
The Ruling of the Trial Court
On 31 January 1996, the trial court rendered judgment ordering Edward and petitioners to "jointly" provide
₱40,000 monthly support to respondents, with Edward shouldering ₱6,000 and petitioners the balance of
₱34,000 subject to Chua Giak’s subsidiary liability. 5
The defendants sought reconsideration, questioning their liability. The trial court, while denying
reconsideration, clarified that petitioners and Chua Giak were held jointly liable with Edward because of the
latter’s "inability x x x to give sufficient support x x x."6
Petitioners appealed to the Court of Appeals assailing, among others, their liability to support respondents.
Petitioners argued that while Edward’s income is insufficient, the law itself sanctions its effects by
providing that legal support should be "in keeping with the financial capacity of the family" under Article
194 of the Civil Code, as amended by Executive Order No. 209 (The Family Code of the Philippines). 7
The Ruling of the Court of Appeals
In its Decision dated 28 April 2003, the Court of Appeals affirmed the trial court. On the issue material to
this appeal, that is, whether there is basis to hold petitioners, as Edward’s parents, liable with him to support
respondents, the Court of Appeals held:
The law on support under Article 195 of the Family Code is clear on this matter. Parents and their legitimate
children are obliged to mutually support one another and this obligation extends down to the legitimate
grandchildren and great grandchildren.
In connection with this provision, Article 200 paragraph (3) of the Family Code clearly provides that should
the person obliged to give support does not have sufficient means to satisfy all claims, the other persons
enumerated in Article 199 in its order shall provide the necessary support. This is because the closer the
relationship of the relatives, the stronger the tie that binds them. Thus, the obligation to support is imposed
first upon the shoulders of the closer relatives and only in their default is the obligation moved to the next
nearer relatives and so on.8
109
Petitioners sought reconsideration but the Court of Appeals denied their motion in the Resolution dated 12
April 2004.
Hence, this petition.
The Issue
The issue is whether petitioners are concurrently liable with Edward to provide support to respondents.
The Ruling of the Court
We rule in the affirmative. However, we modify the appealed judgment by limiting petitioners’ liability to
the amount of monthly support needed by respondents Lester Edward, Candice Grace and Mariano III only.
Petitioners Liable to Provide Support but only to their Grandchildren
By statutory9 and jurisprudential mandate,10 the liability of ascendants to provide legal support to their
descendants is beyond cavil. Petitioners themselves admit as much – they limit their petition to the narrow
question of when their liability is triggered, not if they are liable. Relying on provisions 11 found in Title IX
of the Civil Code, as amended, on Parental Authority, petitioners theorize that their liability is activated only
upon default of parental authority, conceivably either by its termination 12 or suspension13 during the
children’s minority. Because at the time respondents sued for support, Cheryl and Edward exercised parental
authority over their children,14 petitioners submit that the obligation to support the latter’s offspring ends
with them.
Neither the text of the law nor the teaching of jurisprudence supports this severe constriction of the scope of
familial obligation to give support. In the first place, the governing text are the relevant provisions in Title
VIII of the Civil Code, as amended, on Support, not the provisions in Title IX on Parental Authority. While
both areas share a common ground in that parental authority encompasses the obligation to provide legal
support,15 they differ in other concerns including the duration of the obligation and its concurrence among
relatives of differing degrees.16 Thus, although the obligation to provide support arising from parental
authority ends upon the emancipation of the child, 17the same obligation arising from spousal and general
familial ties ideally lasts during the obligee's lifetime.. Also, while parental authority under Title IX (and the
correlative parental rights) pertains to parents, passing to ascendants only upon its termination or
suspension, the obligation to provide legal support passes on to ascendants not only upon default of the
parents but also for the latter’s inability to provide sufficient support. As we observed in another case raising
the ancillary issue of an ascendant’s obligation to give support in light of the father’s sufficient means:
Professor Pineda is of the view that grandchildren cannot demand support directly from their grandparents if
they have parents (ascendants of nearest degree) who are capable of supporting them. This is so because we
have to follow the order of support under Art. 199. We agree with this view.
xxxx
There is no showing that private respondent is without means to support his son; neither is there any
evidence to prove that petitioner, as the paternal grandmother, was willing to voluntarily provide for her
grandson's legal support. x x x18 (Emphasis supplied; internal citations omitted)
Here, there is no question that Cheryl is unable to discharge her obligation to provide sufficient legal support
to her children, then all school-bound. It is also undisputed that the amount of support Edward is able to give
to respondents, ₱6,000 a month, is insufficient to meet respondents’ basic needs. This inability of Edward
and Cheryl to sufficiently provide for their children shifts a portion of their obligation to the ascendants in
the nearest degree, both in the paternal (petitioners) and maternal19 lines, following the ordering in Article
199. To hold otherwise, and thus subscribe to petitioners’ theory, is to sanction the anomalous scenario of
tolerating extreme material deprivation of children because of parental inability to give adequate support
even if ascendants one degree removed are more than able to fill the void.1avvphi1
However, petitioners’ partial concurrent obligation extends only to their descendants as this word is
commonly understood to refer to relatives, by blood of lower degree. As petitioners’ grandchildren by
blood, only respondents Lester Edward, Candice Grace and Mariano III belong to this category. Indeed,
Cheryl’s right to receive support from the Lim family extends only to her husband Edward, arising from
their marital bond.20 Unfortunately, Cheryl’s share from the amount of monthly support the trial court
awarded cannot be determined from the records. Thus, we are constrained to remand the case to the trial
court for this limited purpose.21
Petitioners Precluded from Availing of the Alternative Option Under
Article 204 of the Civil Code, as Amended
As an alternative proposition, petitioners wish to avail of the option in Article 204 of the Civil Code, as
amended, and pray that they be allowed to fulfill their obligation by maintaining respondents at petitioners’
Makati residence. The option is unavailable to petitioners.
The application of Article 204 which provides that —
The person obliged to give support shall have the option to fulfill the obligation either by paying the
allowance fixed, or by receiving and maintaining in the family dwelling the person who has a right to
receive support. The latter alternative cannot be availed of in case there is a moral or legal obstacle thereto.
(Emphasis supplied)
is subject to its exception clause. Here, the persons entitled to receive support are petitioners’ grandchildren
and daughter-in-law. Granting petitioners the option in Article 204 will secure to the grandchildren a well-
provided future; however, it will also force Cheryl to return to the house which, for her, is the scene of her
husband’s infidelity. While not rising to the level of a legal obstacle, as indeed, Cheryl’s charge against
Edward for concubinage did not prosper for insufficient evidence, her steadfast insistence on its occurrence
amounts to a moral impediment bringing the case within the ambit of the exception clause of Article 204,
precluding its application.
WHEREFORE, we DENY the petition. We AFFIRM the Decision of the Court of Appeals, dated 28 April
2003, and its Resolution dated 12 April 2004 with the MODIFICATION that petitioners Prudencio and
Filomena Lim are liable to provide support only to respondents Lester Edward, Candice Grace and Mariano
III, all surnamed Lim. We REMAND the case to the Regional Trial Court of Makati City, Branch 140, for
further proceedings consistent with this ruling.
SO ORDERED.

110
 SECOND DIVISION
G.R. No. 165166 August 15, 2012
CHARLES GOTARDO, Petitioner,
vs.
DIVINA BULING, Respondent.
VILLARAMA, JR.,*
DECISION
BRION, J.:
We resolve the petition for review on certiorari, 1 filed by petitioner Charles Gotardo, to challenge the
March 5, 2004 decision2 and the July 27, 2004 resolution3 of the Court of Appeals (CA) in CA GR CV No.
76326. The CA decision ordered the petitioner to recognize and provide legal support to his minor son,
Gliffze 0. Buling. The CA resolution denied the petitioner's subsequent motion for reconsideration.
FACTUAL BACKGROUND
On September 6, 1995, respondent Divina Buling filed a complaint with the Regional Trial Court (RTC) of
Maasin, Southern Leyte, Branch 25, for compulsory recognition and support pendente lite, claiming that the
petitioner is the father of her child Gliffze.4
In his answer, the petitioner denied the imputed paternity of Gliffze. 5 For the parties’ failure to amicably
settle the dispute, the RTC terminated the pre-trial proceedings.6 Trial on the merits ensued.
The respondent testified for herself and presented Rodulfo Lopez as witness. Evidence for the respondent
showed that she met the petitioner on December 1, 1992 at the Philippine Commercial and Industrial Bank,
Maasin, Southern Leyte branch where she had been hired as a casual employee, while the petitioner worked
as accounting supervisor.7 The petitioner started courting the respondent in the third week of December 1992
and they became sweethearts in the last week of January 1993. 8 The petitioner gave the respondent greeting
cards on special occasions, such as on Valentine’s Day and her birthday; she reciprocated his love and took
care of him when he was ill.9
Sometime in September 1993, the petitioner started intimate sexual relations with the respondent in the
former’s rented room in the boarding house managed by Rodulfo, the respondent’s uncle, on Tomas Oppus
St., Agbao, Maasin, Southern Leyte.10 The petitioner rented the room from March 1, 1993 to August 30,
1994.11 The sexual encounters occurred twice a month and became more frequent in June 1994; eventually,
on August 8, 1994, the respondent found out that she was pregnant. 12 When told of the pregnancy, the
petitioner was happy and made plans to marry the respondent.13 They in fact applied for a marriage
license.14 The petitioner even inquired about the costs of a wedding reception and the bridal
gown.15 Subsequently, however, the petitioner backed out of the wedding plans. 16
The respondent responded by filing a complaint with the Municipal Trial Court of Maasin, Southern Leyte
for damages against the petitioner for breach of promise to marry.17 Later, however, the petitioner and the
respondent amicably settled the case.18
The respondent gave birth to their son Gliffze on March 9, 1995. 19 When the petitioner did not show up and
failed to provide support to Gliffze, the respondent sent him a letter on July 24, 1995 demanding recognition
of and support for their child.20 When the petitioner did not answer the demand, the respondent filed her
complaint for compulsory recognition and support pendente lite.21
The petitioner took the witness stand and testified for himself. He denied the imputed paternity, 22 claiming
that he first had sexual contact with the respondent in the first week of August 1994 and she could not have
been pregnant for twelve (12) weeks (or three (3) months) when he was informed of the pregnancy on
September 15, 1994.23
During the pendency of the case, the RTC, on the respondent’s motion, 24 granted a ₱2,000.00 monthly child
support, retroactive from March 1995.25
THE RTC RULING
In its June 25, 2002 decision, the RTC dismissed the complaint for insufficiency of evidence proving
Gliffze’s filiation. It found the respondent’s testimony inconsistent on the question of when she had her first
111
sexual contact with the petitioner, i.e., "September 1993" in her direct testimony while "last week of January
1993" during her cross-testimony, and her reason for engaging in sexual contact even after she had refused
the petitioner’s initial marriage proposal. It ordered the respondent to return the amount of support pendente
lite erroneously awarded, and to pay ₱ 10,000.00 as attorney’s fees. 26
The respondent appealed the RTC ruling to the CA.27
THE CA RULING
In its March 5, 2004 decision, the CA departed from the RTC's appreciation of the respondent’s testimony,
concluding that the latter merely made an honest mistake in her understanding of the questions of the
petitioner’s counsel. It noted that the petitioner and the respondent had sexual relationship even before
August 1994; that the respondent had only one boyfriend, the petitioner, from January 1993 to August 1994;
and that the petitioner’s allegation that the respondent had previous relationships with other men remained
unsubstantiated. The CA consequently set aside the RTC decision and ordered the petitioner to recognize his
minor son Gliffze. It also reinstated the RTC order granting a ₱ 2,000.00 monthly child support. 28
When the CA denied29 the petitioner’s motion for reconsideration,30 the petitioner filed the present petition
for review on certiorari.
THE PETITION
The petitioner argues that the CA committed a reversible error in rejecting the RTC’s appreciation of the
respondent’s testimony, and that the evidence on record is insufficient to prove paternity.
THE CASE FOR THE RESPONDENT
The respondent submits that the CA correctly explained that the inconsistency in the respondent’s testimony
was due to an incorrect appreciation of the questions asked, and that the record is replete with evidence
proving that the petitioner was her lover and that they had several intimate sexual encounters during their
relationship, resulting in her pregnancy and Gliffze’s birth on March 9, 1995.
THE ISSUE
The sole issue before us is whether the CA committed a reversible error when it set aside the RTC’s findings
and ordered the petitioner to recognize and provide legal support to his minor son Gliffze.
OUR RULING
We do not find any reversible error in the CA’s ruling.
We have recognized that "[f]iliation proceedings are usually filed not just to adjudicate paternity but also to
secure a legal right associated with paternity, such as citizenship, support (as in this case) or inheritance. [In
paternity cases, the burden of proof] is on the person who alleges that the putative father is the biological
father of the child."31
One can prove filiation, either legitimate or illegitimate, through the record of birth appearing in the civil
register or a final judgment, an admission of filiation in a public document or a private handwritten
instrument and signed by the parent concerned, or the open and continuous possession of the status of a
legitimate or illegitimate child, or any other means allowed by the Rules of Court and special laws. 32 We
have held that such other proof of one's filiation may be a "baptismal certificate, a judicial admission, a
family bible in which his name has been entered, common reputation respecting [his] pedigree, admission by
silence, the [testimonies] of witnesses, and other kinds of proof admissible under Rule 130 of the Rules of
Court."33
In Herrera v. Alba,34 we stressed that there are four significant procedural aspects of a traditional paternity
action that parties have to face: a prima facie case, affirmative defenses, presumption of legitimacy, and
physical resemblance between the putative father and the child.35 We explained that a prima facie case exists
if a woman declares — supported by corroborative proof — that she had sexual relations with the putative
father; at this point, the burden of evidence shifts to the putative father. 36 We explained further that the two
affirmative defenses available to the putative father are: (1) incapability of sexual relations with the mother
due to either physical absence or impotency, or (2) that the mother had sexual relations with other men at the
time of conception.37
In this case, the respondent established a prima facie case that the petitioner is the putative father of Gliffze
through testimony that she had been sexually involved only with one man, the petitioner, at the time of her
conception.38Rodulfo corroborated her testimony that the petitioner and the respondent had intimate
relationship.39
On the other hand, the petitioner did not deny that he had sexual encounters with the respondent, only that it
occurred on a much later date than the respondent asserted, such that it was physically impossible for the
respondent to have been three (3) months pregnant already in September 1994 when he was informed of the
pregnancy.40 However, the petitioner failed to substantiate his allegations of infidelity and insinuations of
promiscuity. His allegations, therefore, cannot be given credence for lack of evidentiary support. The
petitioner’s denial cannot overcome the respondent’s clear and categorical assertions.
The petitioner, as the RTC did, made much of the variance between the respondent’s direct testimony
regarding their first sexual contact as "sometime in September 1993" and her cross-testimony when she
stated that their first sexual contact was "last week of January 1993," as follows:
ATTY. GO CINCO:
When did the defendant, according to you, start courting you?
A Third week of December 1992.
Q And you accepted him?
A Last week of January 1993.
Q And by October you already had your sexual intercourse?
A Last week of January 1993.
COURT: What do you mean by accepting?
A I accepted his offer of love.41
We find that the contradictions are for the most part more apparent than real, having resulted from the
failure of the respondent to comprehend the question posed, but this misunderstanding was later corrected
and satisfactorily explained. Indeed, when confronted for her contradictory statements, the respondent
explained that that portion of the transcript of stenographic notes was incorrect and she had brought it to the
attention of Atty. Josefino Go Cinco (her former counsel) but the latter took no action on the matter. 42
Jurisprudence teaches that in assessing the credibility of a witness, his testimony must be considered in its
entirety instead of in truncated parts. The technique in deciphering a testimony is not to consider only its
isolated parts and to anchor a conclusion based on these parts. "In ascertaining the facts established by a
witness, everything stated by him on direct, cross and redirect examinations must be calibrated and
considered."43 Evidently, the totality of the respondent's testimony positively and convincingly shows that no
real inconsistency exists. The respondent has consistently asserted that she started intimate sexual relations
with the petitioner sometime in September 1993.44
Since filiation is beyond question, support follows as a matter of obligation; a parent is obliged to support
his child, whether legitimate or illegitimate.45 Support consists of everything indispensable for sustenance,
dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity
of the family.46 Thus, the amount of support is variable and, for this reason, no final judgment on the amount
of support is made as the amount shall be in proportion to the resources or means of the giver and the
necessities of the recipient.47 It may be reduced or increased proportionately according to the reduction or
increase of the necessities of the recipient and the resources or means of the person obliged to support. 48
In this case, we sustain the award of ₱ 2,000.00 monthly child support, without prejudice to the filing of the
proper motion in the RTC for the determination of any support in arrears, considering the needs of the child,
Gliffze, during the pendency of this case.
WHEREFORE, we hereby DENY the petition for lack of merit. The March 5, 2004 decision and the July
27, 2004 resolution of the Court of Appeals in CA GR CV No. 76326 are hereby AFFIRMED. Costs against
the petitioner.
SO ORDERED.

112
 FIRST DIVISION
G.R. Nos. 175279-80 June 5, 2013
SUSAN LIM-LUA, Petitioner,
vs.
DANILO Y. LUA, Respondent.
DECISION
VILLARAMA, JR., J.:
In this petition for review on certiorari under Rule 45, petitioner seeks to set aside the Decision1 dated April
20, 2006 and Resolution2 dated October 26, 2006 of the Court of Appeals (CA) dismissing her petition for
contempt (CA-G.R. SP No. 01154) and granting respondent's petition for certiorari (CA-G.R. SP No.
01315).
The factual background is as follows:
On September 3, 2003,3 petitioner Susan Lim-Lua filed an action for the declaration of nullity of her
marriage with respondent Danilo Y. Lua, docketed as Civil Case No. CEB-29346 of the Regional Trial
Court (RTC) of Cebu City, Branch 14.
In her prayer for support pendente lite for herself and her two children, petitioner sought the amount of
₱500,000.00 as monthly support, citing respondent’s huge earnings from salaries and dividends in several
companies and businesses here and abroad.4
After due hearing, Judge Raphael B. Yrastorza, Sr. issued an Order5 dated March 31, 2004 granting support
pendente lite, as follows:
From the evidence already adduced by the parties, the amount of Two Hundred Fifty (₱250,000.00)
Thousand Pesos would be sufficient to take care of the needs of the plaintiff. This amount excludes the One
hundred thirty-five (₱135,000.00) Thousand Pesos for medical attendance expenses needed by plaintiff for
the operation of both her eyes which is demandable upon the conduct of such operation. The amounts
already extended to the two (2) children, being a commendable act of defendant, should be continued by him
considering the vast financial resources at his disposal.
According to Art. 203 of the Family Code, support is demandable from the time plaintiff needed the said
support but is payable only from the date of judicial demand. Since the instant complaint was filed on 03
September 2003, the amount of Two Hundred Fifty (₱250,000.00) Thousand should be paid by defendant to
plaintiff retroactively to such date until the hearing of the support pendente lite. ₱250,000.00 x 7
corresponding to the seven (7) months that lapsed from September, 2003 to March 2004 would tantamount
to a total of One Million Seven Hundred Fifty (₱1,750,000.00) Thousand Pesos. Thereafter, starting the
month of April 2004, until otherwise ordered by this Court, defendant is ordered to pay a monthly support of
Two Hundred Fifty Thousand (₱250,000.00) Pesos payable within the first five (5) days of each
corresponding month pursuant to the third paragraph of Art. 203 of the Family Code of the Philippines. The
113
monthly support of ₱250,000.00 is without prejudice to any increase or decrease thereof that this Court may
grant plaintiff as the circumstances may warrant i.e. depending on the proof submitted by the parties during
the proceedings for the main action for support.6
Respondent filed a motion for reconsideration,7 asserting that petitioner is not entitled to spousal support
considering that she does not maintain for herself a separate dwelling from their children and respondent has
continued to support the family for their sustenance and well-being in accordance with family’s social and
financial standing. As to the ₱250,000.00 granted by the trial court as monthly support pendente lite, as well
as the ₱1,750,000.00 retroactive support, respondent found it unconscionable and beyond the intendment of
the law for not having considered the needs of the respondent.
In its May 13, 2004 Order, the trial court stated that the March 31, 2004 Order had become final and
executory since respondent’s motion for reconsideration is treated as a mere scrap of paper for violation of
the threeday notice period under Section 4, Rule 15 of the 1997 Rules of Civil Procedure, as amended, and
therefore did not interrupt the running of the period to appeal. Respondent was given ten (10) days to show
cause why he should not be held in contempt of the court for disregarding the March 31, 2004 order granting
support pendente lite.8
His second motion for reconsideration having been denied, respondent filed a petition for certiorari in the
CA.
On April 12, 2005, the CA rendered its Decision,9 finding merit in respondent’s contention that the trial
court gravely abused its discretion in granting ₱250,000.00 monthly support to petitioner without evidence
to prove his actual income. The said court thus decreed:
WHEREFORE, foregoing premises considered, this petition is given due course. The assailed Orders dated
March 31, 2004, May 13, 2004, June 4, 2004 and June 18, 2004 of the Regional Trial Court, Branch 14,
Cebu City issued in Civil Case No. CEB No. 29346 entitled "Susan Lim Lua versus Danilo Y. Lua" are
hereby nullified and set aside and instead a new one is entered ordering herein petitioner:
a) to pay private respondent a monthly support pendente lite of ₱115,000.00 beginning the month
of April 2005 and every month thereafter within the first five (5) days thereof;
b) to pay the private respondent the amount of ₱115,000.00 a month multiplied by the number of
months starting from September 2003 until March 2005 less than the amount supposedly given by
petitioner to the private respondent as her and their two (2) children monthly support; and
c) to pay the costs.
SO ORDERED.10
Neither of the parties appealed this decision of the CA. In a Compliance 11 dated June 28, 2005, respondent
attached a copy of a check he issued in the amount of ₱162,651.90 payable to petitioner. Respondent
explained that, as decreed in the CA decision, he deducted from the amount of support in arrears (September
3, 2003 to March 2005) ordered by the CA -- ₱2,185,000.00 -- plus ₱460,000.00 (April, May, June and July
2005), totaling ₱2,645,000.00, the advances given by him to his children and petitioner in the sum of
₱2,482,348.16 (with attached photocopies of receipts/billings).
In her Comment to Compliance with Motion for Issuance of a Writ of Execution,12 petitioner asserted that
none of the expenses deducted by respondent may be chargeable as part of the monthly support
contemplated by the CA in CA-G.R. SP No. 84740.
On September 27, 2005, the trial court issued an Order13 granting petitioner’s motion for issuance of a writ
of execution as it rejected respondent’s interpretation of the CA decision. Respondent filed a motion for
reconsideration and subsequently also filed a motion for inhibition of Judge Raphael B. Yrastorza, Sr. On
November 25, 2005, Judge Yrastorza, Sr. issued an Order14 denying both motions.
WHEREFORE, in view of the foregoing premises, both motions are DENIED. Since a second motion for
reconsideration is prohibited under the Rules, this denial has attained finality; let, therefore, a writ of
execution be issued in favor of plaintiff as against defendant for the accumulated support in arrears pendente
lite.
Notify both parties of this Order.
SO ORDERED.15
Since respondent still failed and refused to pay the support in arrears pendente lite, petitioner filed in the CA
a Petition for Contempt of Court with Damages, docketed as CA-G.R. SP No. 01154 ("Susan Lim Lua
versus Danilo Y. Lua"). Respondent, on the other hand, filed CA-G.R. SP No. 01315, a Petition for
Certiorari under Rule 65 of the Rules of Court ("Danilo Y. Lua versus Hon. Raphael B. Yrastorza, Sr., in his
capacity as Presiding Judge of Regional Trial Court of Cebu, Branch 14, and Susan Lim Lua"). The two
cases were consolidated.
By Decision dated April 20, 2006, the CA set aside the assailed orders of the trial court, as follows:
WHEREFORE, judgment is hereby rendered:
a) DISMISSING, for lack of merit, the case of Petition for Contempt of Court with Damages filed
by Susan Lim Lua against Danilo Y. Lua with docket no. SP. CA-GR No. 01154;
b) GRANTING Danilo Y. Lua’s Petition for Certiorari docketed as SP. CA-GR No. 01315.
Consequently, the assailed Orders dated 27 September 2005 and 25 November 2005 of the
Regional Trial Court, Branch 14, Cebu City issued in Civil Case No. CEB-29346 entitled "Susan
Lim Lua versus Danilo Y. Lua, are hereby NULLIFIED and SET ASIDE, and instead a new one is
entered:
i. ORDERING the deduction of the amount of Ph₱2,482,348.16 plus 946,465.64, or a
total of PhP3,428,813.80 from the current total support in arrears of Danilo Y. Lua to his
wife, Susan Lim Lua and their two (2) children;
114
ii. ORDERING Danilo Y. Lua to resume payment of his monthly support of
Ph₱115,000.00 pesos starting from the time payment of this amount was deferred by him
subject to the deductions aforementioned.
iii. DIRECTING the issuance of a permanent writ of preliminary injunction.
SO ORDERED.16
The appellate court said that the trial court should not have completely disregarded the expenses incurred by
respondent consisting of the purchase and maintenance of the two cars, payment of tuition fees, travel
expenses, and the credit card purchases involving groceries, dry goods and books, which certainly inured to
the benefit not only of the two children, but their mother (petitioner) as well. It held that respondent’s act of
deferring the monthly support adjudged in CA-G.R. SP No. 84740 was not contumacious as it was anchored
on valid and justifiable reasons. Respondent said he just wanted the issue of whether to deduct his advances
be settled first in view of the different interpretation by the trial court of the appellate court’s decision in
CA-G.R. SP No. 84740. It also noted the lack of contribution from the petitioner in the joint obligation of
spouses to support their children.
Petitioner filed a motion for reconsideration but it was denied by the CA.
Hence, this petition raising the following errors allegedly committed by the CA:
I.
THE HONORABLE COURT ERRED IN NOT FINDING RESPONDENT GUILTY OF
INDIRECT CONTEMPT.
II.
THE HONORABLE COURT ERRED IN ORDERING THE DEDUCTION OF THE AMOUNT
OF PH₱2,482,348.16 PLUS 946,465.64, OR A TOTAL OF PH₱3,428,813.80 FROM THE
CURRENT TOTAL SUPPORT IN ARREARS OF THE RESPONDENT TO THE PETITIONER
AND THEIR CHILDREN.17
The main issue is whether certain expenses already incurred by the respondent may be deducted from the
total support in arrears owing to petitioner and her children pursuant to the Decision dated April 12, 2005 in
CA-G.R. SP No. 84740.
The pertinent provision of the Family Code of the Philippines provides:
Article 194. Support comprises everything indispensable for sustenance, dwelling, clothing, medical
attendance, education and transportation, in keeping with the financial capacity of the family.
The education of the person entitled to be supported referred to in the preceding paragraph shall include his
schooling or training for some profession, trade or vocation, even beyond the age of majority.
Transportation shall include expenses in going to and from school, or to and from place of work. (Emphasis xxxx
supplied.)
Q How much do you spend for your food and your two (2) children every month?
Petitioner argues that it was patently erroneous for the CA to have allowed the deduction of the value of the
two cars and their maintenance costs from the support in arrears, as these items are not indispensable to the A Presently, Sir?
sustenance of the family or in keeping them alive. She points out that in the Decision in CA-G.R. SP No.
84740, the CA already considered the said items which it deemed chargeable to respondent, while the
ATTY. ZOSA:
monthly support pendente lite (₱115,000.00) was fixed on the basis of the documentary evidence of
respondent’s alleged income from various businesses and petitioner’s testimony that she needed
₱113,000.00 for the maintenance of the household and other miscellaneous expenses excluding the Yes.
₱135,000.00 medical attendance expenses of petitioner.
A For the food alone, I spend not over ₱40,000.00 to ₱50,000.00 a month for the food alone.
Respondent, on the other hand, contends that disallowing the subject deductions would result in unjust
enrichment, thus making him pay for the same obligation twice. Since petitioner and the children resided in xxxx
one residence, the groceries and dry goods purchased by the children using respondent’s credit card,
totalling ₱594,151.58 for the period September 2003 to June 2005 were not consumed by the children alone ATTY. ZOSA:
but shared with their mother. As to the Volkswagen Beetle and BMW 316i respondent bought for his
daughter Angelli Suzanne Lua and Daniel Ryan Lua, respectively, these, too, are to be considered advances
for support, in keeping with the financial capacity of the family. Respondent stressed that being children of Q What other expenses do you incur in living in that place?
parents belonging to the upper-class society, Angelli and Daniel Ryan had never in their entire life
commuted from one place to another, nor do they eat their meals at "carinderias". Hence, the cars and their A The normal household and the normal expenses for a family to have a decent living, Sir.
maintenance are indispensable to the children’s day-to-day living, the value of which were properly
deducted from the arrearages in support pendente lite ordered by the trial and appellate courts. Q How much other expenses do you incur?

As a matter of law, the amount of support which those related by marriage and family relationship is WITNESS:
generally obliged to give each other shall be in proportion to the resources or means of the giver and to the
needs of the recipient.18 Such support comprises everything indispensable for sustenance, dwelling, clothing,
A For other expenses, is around over a ₱100,000.00, Sir.
medical attendance, education and transportation, in keeping with the financial capacity of the family.

Q Why do you incur that much amount?

Upon receipt of a verified petition for declaration of absolute nullity of void marriage or for annulment of
voidable marriage, or for legal separation, and at any time during the proceeding, the court, motu proprio or
upon verified application of any of the parties, guardian or designated custodian, may temporarily grant
support pendente lite prior to the rendition of judgment or final order. 19 Because of its provisional nature, a
court does not need to delve fully into the merits of the case before it can settle an application for this relief.
All that a court is tasked to do is determine the kind and amount of evidence which may suffice to enable it
to justly resolve the application. It is enough that the facts be established by affidavits or other documentary
evidence appearing in the record.20
A For the clothing for the three (3) of us, for the vitamins and medicines. And also I am having a special
therapy to straighten my back because I am scoliotic. I am advised by the Doctor to hire a driver, but I
cannot still afford it now. Because my eyesight is not reliable for driving. And I still need another househelp
to accompany me whenever I go marketing because for my age, I cannot carry anymore heavy loads.
xxxx

In this case, the amount of monthly support pendente lite for petitioner and her two children was determined ATTY. FLORES:
after due hearing and submission of documentary evidence by the parties. Although the amount fixed by the
trial court was reduced on appeal, it is clear that the monthly support pendente lite of ₱115,000.00 ordered xxxx
by the CA was intended primarily for the sustenance of petitioner and her children, e.g., food, clothing,
salaries of drivers and house helpers, and other household expenses. Petitioner’s testimony also mentioned
the cost of regular therapy for her scoliosis and vitamins/medicines. Q On the issue of the food for you and the two (2) children, you mentioned ₱40,000.00 to ₱50,000.00?

ATTY. ZOSA: A Yes, for the food alone.

115
Q Okay, what other possible expenses that you would like to include in those two (2) items? You mentioned Q That is very reasonable. [W]ould you care to please repeat that?
of a driver, am I correct?
A Therapy for my scoliotic back and then also for the operation both of my eyes. And I am also taking some
A Yes, I might need two (2) drivers, Sir for me and my children. vitamins from excel that will cost ₱20,000.00 a month.

Q Okay. How much would you like possibly to pay for those two (2) drivers? Q Okay. Let’s have piece by piece. Have you asked the Doctor how much would it cost you for the
operation of that scoliotic?
A I think ₱10,000.00 a month for one (1) driver. So I need two (2) drivers. And I need another househelp.
A Yes before because I was already due last year. Before, this eye will cost ₱60,000.00 and the other eyes
Q You need another househelp. The househelp nowadays would charge you something between ₱3,000.00 ₱75,000.00.
to ₱4,000.00. That’s quite…
Q So for both eyes, you are talking of ₱60,000.00 plus ₱75,000.00 is ₱135,000.00?
A Right now, my househelp is receiving ₱8,000.00. I need another which I will give a compensation of
₱5,000.00. A Yes.

Q Other than that, do you still have other expenses? xxxx

A My clothing. Q You talk of therapy?

COURT: A Yes.

How about the schooling for your children? Q So how much is that?

WITNESS: A Around ₱5,000.00 a week.21

A The schooling is shouldered by my husband, Your Honor. As to the financial capacity of the respondent, it is beyond doubt that he can solely provide for the
subsistence, education, transportation, health/medical needs and recreational activities of his children, as
COURT: well as those of petitioner who was then unemployed and a full-time housewife. Despite this, respondent’s
counsel manifested during the same hearing that respondent was willing to grant the amount of only
₱75,000.00 as monthly support pendente lite both for the children and petitioner as spousal support. Though
Everything?
the receipts of expenses submitted in court unmistakably show how much respondent lavished on his
children, it appears that the matter of spousal support was a different matter altogether. Rejecting
A Yes, Your Honor. petitioner’s prayer for ₱500,000.00 monthly support and finding the ₱75,000.00 monthly support offered by
respondent as insufficient, the trial court fixed the monthly support pendente lite at ₱250,000.00. However,
xxxx since the supposed income in millions of respondent was based merely on the allegations of petitioner in her
complaint and registration documents of various corporations which respondent insisted are owned not by
ATTY. FLORES: him but his parents and siblings, the CA reduced the amount of support pendente lite to ₱115,000.00, which
ruling was no longer questioned by both parties.
Q Madam witness, let us talk of the present needs. x x x. What else, what specific need that you would like
to add so I can tell my client, the defendant. Controversy between the parties resurfaced when respondent’s compliance with the final CA decision
indicated that he deducted from the total amount in arrears (₱2,645,000.00) the sum of ₱2,482,348.16,
representing the value of the two cars for the children, their cost of maintenance and advances given to
WITNESS: petitioner and his children. Respondent explained that the deductions were made consistent with the fallo of
the CA Decision in CA-G.R. SP No. 84740 ordering him to pay support pendente lite in arrears less the
A I need to have an operation both of my eyes. I also need a special therapy for my back because I am amount supposedly given by him to petitioner as her and their two children’s monthly support.
scoliotic, three (3) times a week.

116
The following is a summary of the subject deductions under Compliance dated June 28, 2005, duly Judicial determination of support pendente lite in cases of legal separation and petitions for declaration of
supported by receipts22: nullity or annulment of marriage are guided by the following provisions of the Rule on Provisional Orders24
Car purchases for Angelli Suzanne - Php1,350,000.00
Sec. 2. Spousal Support.–In determining support for the spouses, the court may be guided by the following
and Daniel Ryan - 613,472.86 rules:

Car Maintenance fees of Angelli -
Suzanne
Credit card statements of Daniel Ryan -
Car Maintenance fees of Daniel Ryan -
51,232.50 (a) In the absence of adequate provisions in a written agreement between the spouses, the spouses
may be supported from the properties of the absolute community or the conjugal partnership.
348,682.28
(b) The court may award support to either spouse in such amount and for such period of time as the
118,960.52 court may deem just and reasonable based on their standard of living during the marriage.

After the trial court disallowed the foregoing deductions, respondent filed a motion for reconsideration
further asserting that the following amounts, likewise with supporting receipts, be considered as additional
advances given to petitioner and the children23:
Medical expenses of Susan Lim-Lua
Dental Expenses of Daniel Ryan
Travel expenses of Susan Lim-Lua
Credit card purchases of Angelli
Suzanne
Salon and travel expenses of Angelli
Suzanne
School expenses of Daniel Ryan Lua
(c) The court may likewise consider the following factors: (1) whether the spouse seeking support
Php2,482,348.16
is the custodian of a child whose circumstances make it appropriate for that spouse not to seek
outside employment; (2) the time necessary to acquire sufficient education and training to enable
the spouse seeking support to find appropriate employment, and that spouse’s future earning
capacity; (3) the duration of the marriage; (4) the comparative financial resources of the spouses,
including their comparative earning abilities in the labor market; (5) the needs and obligations of
each spouse; (6) the contribution of each spouse to the marriage, including services rendered in
Php 42,450.71 home-making, child care, education, and career building of the other spouse; (7) the age and health
of the spouses; (8) the physical and emotional conditions of the spouses; (9) the ability of the
11,500.00
supporting spouse to give support, taking into account that spouse’s earning capacity, earned and
14,611.15 unearned income, assets, and standard of living; and (10) any other factor the court may deem just
and equitable.
408,891.08
(d) The Family Court may direct the deduction of the provisional support from the salary of the
spouse.
87,112.70
Sec. 3. Child Support.–The common children of the spouses shall be supported from the properties of the
260,900.00 absolute community or the conjugal partnership.

Cash given to Daniel and Angelli 121,000.00 Subject to the sound discretion of the court, either parent or both may be ordered to give an amount
necessary for the support, maintenance, and education of the child. It shall be in proportion to the resources
or means of the giver and to the necessities of the recipient.
TOTAL - Php 946,465.64
In determining the amount of provisional support, the court may likewise consider the following factors: (1)
GRAND TOTAL - Php 3,428,813.80 the financial resources of the custodial and non-custodial parent and those of the child; (2) the physical and
emotional health of the child and his or her special needs and aptitudes; (3) the standard of living the child
has been accustomed to; (4) the non-monetary contributions that the parents will make toward the care and
The CA, in ruling for the respondent said that all the foregoing expenses already incurred by the respondent well-being of the child.
should, in equity, be considered advances which may be properly deducted from the support in arrears due
to the petitioner and the two children. Said court also noted the absence of petitioner’s contribution to the The Family Court may direct the deduction of the provisional support from the salary of the parent.
joint obligation of support for their children.
Since the amount of monthly support pendente lite as fixed by the CA was not appealed by either party,
We reverse in part the decision of the CA. there is no controversy as to its sufficiency and reasonableness. The dispute concerns the deductions made
by respondent in settling the support in arrears.

117
On the issue of crediting of money payments or expenses against accrued support, we find as relevant the
following rulings by US courts.
In Bradford v. Futrell,25 appellant sought review of the decision of the Circuit Court which found him in
arrears with his child support payments and entered a decree in favor of appellee wife. He complained that
in determining the arrearage figure, he should have been allowed full credit for all money and items of
personal property given by him to the children themselves, even though he referred to them as gifts. The
Court of Appeals of Maryland ruled that in the suit to determine amount of arrears due the divorced wife
under decree for support of minor children, the husband (appellant) was not entitled to credit for checks
which he had clearly designated as gifts, nor was he entitled to credit for an automobile given to the oldest
son or a television set given to the children. Thus, if the children remain in the custody of the mother, the
father is not entitled to credit for money paid directly to the children if such was paid without any relation to
the decree.
In the absence of some finding of consent by the mother, most courts refuse to allow a husband to dictate
how he will meet the requirements for support payments when the mode of payment is fixed by a decree of
court. Thus he will not be credited for payments made when he unnecessarily interposed himself as a
volunteer and made payments direct to the children of his own accord. Wills v. Baker, 214 S. W. 2d 748
(Mo. 1948); Openshaw v. Openshaw, 42 P. 2d 191 (Utah 1935). In the latter case the court said in part: "The
payments to the children themselves do not appear to have been made as payments upon alimony, but were
rather the result of his fatherly interest in the welfare of those children. We do not believe he should be
permitted to charge them to plaintiff. By so doing he would be determining for Mrs. Openshaw the manner
in which she should expend her allowances. It is a very easy thing for children to say their mother will not
give them money, especially as they may realize that such a plea is effective in attaining their ends. If she is
not treating them right the courts are open to the father for redress."26
In Martin, Jr. v. Martin,27 the Supreme Court of Washington held that a father, who is required by a divorce
decree to make child support payments directly to the mother, cannot claim credit for payments voluntarily
made directly to the children. However, special considerations of an equitable nature may justify a court in
crediting such payments on his indebtedness to the mother, when such can be done without injustice to her.
The general rule is to the effect that when a father is required by a divorce decree to pay to the mother
money for the support of their dependent children and the unpaid and accrued installments become
judgments in her favor, he cannot, as a matter of law, claim credit on account of payments voluntarily made
directly to the children. Koon v. Koon, supra; Briggs v. Briggs, supra. However, special considerations of an
equitable nature may justify a court in crediting such payments on his indebtedness to the mother, when that
can be done without injustice to her. Briggs v. Briggs, supra. The courts are justifiably reluctant to lay down
any general rules as to when such credits may be allowed.28 (Emphasis supplied.)
Here, the CA should not have allowed all the expenses incurred by respondent to be credited against the
accrued support pendente lite. As earlier mentioned, the monthly support pendente lite granted by the trial
court was intended primarily for food, household expenses such as salaries of drivers and house helpers, and
also petitioner’s scoliosis therapy sessions. Hence, the value of two expensive cars bought by respondent for
his children plus their maintenance cost, travel expenses of petitioner and Angelli, purchases through credit
card of items other than groceries and dry goods (clothing) should have been disallowed, as these bear no
relation to the judgment awarding support pendente lite. While it is true that the dispositive portion of the
executory decision in CA-G.R. SP No. 84740 ordered herein respondent to pay the support in arrears "less
than the amount supposedly given by petitioner to the private respondent as her and their two (2) children
118
monthly support," the deductions should be limited to those basic needs and expenses considered by the trial
and appellate courts. The assailed ruling of the CA allowing huge deductions from the accrued monthly
support of petitioner and her children, while correct insofar as it commends the generosity of the respondent
to his children, is clearly inconsistent with the executory decision in CA-G.R. SP No. 84740. More
important, it completely ignores the unfair consequences to petitioner whose sustenance and well-being, was
given due regard by the trial and appellate courts. This is evident from the March 31, 2004 Order granting
support pendente lite to petitioner and her children, when the trial court observed:
While there is evidence to the effect that defendant is giving some forms of financial assistance to his two
(2) children via their credit cards and paying for their school expenses, the same is, however, devoid of any
form of spousal support to the plaintiff, for, at this point in time, while the action for nullity of marriage is
still to be heard, it is incumbent upon the defendant, considering the physical and financial condition of the
plaintiff and the overwhelming capacity of defendant, to extend support unto the latter. x x x 29
On appeal, while the Decision in CA-G.R. SP No. 84740 reduced the amount of monthly support fixed by
the trial court, it nevertheless held that considering respondent’s financial resources, it is but fair and just
that he give a monthly support for the sustenance and basic necessities of petitioner and his children. This
would imply that any amount respondent seeks to be credited as monthly support should only cover those
incurred for sustenance and household expenses.1avvphi1
In the case at bar, records clearly show and in fact has been admitted by petitioner that aside from paying the
expenses of their two (2) children’s schooling, he gave his two (2) children two (2) cars and credit cards of
which the expenses for various items namely: clothes, grocery items and repairs of their cars were
chargeable to him which totaled an amount of more than One Hundred Thousand (₱100,000.00) for each of
them and considering that as testified by the private respondent that she needs the total amount of
₱113,000.00 for the maintenance of the household and other miscellaneous expenses and considering further
that petitioner can afford to buy cars for his two (2) children, and to pay the expenses incurred by them
which are chargeable to him through the credit cards he provided them in the amount of ₱100,000.00 each, it
is but fair and just that the monthly support pendente lite for his wife, herein private respondent, be fixed as
of the present in the amount of ₱115,000.00 which would be sufficient enough to take care of the household
and other needs. This monthly support pendente lite to private respondent in the amount of ₱115,000.00
excludes the amount of One Hundred ThirtyFive (₱135,000.00) Thousand Pesos for medical attendance
expenses needed by private respondent for the operation of both her eyes which is demandable upon the
conduct of such operation. Likewise, this monthly support of ₱115,000.00 is without prejudice to any
increase or decrease thereof that the trial court may grant private respondent as the circumstances may
warrant i.e. depending on the proof submitted by the parties during the proceedings for the main action for
support.
The amounts already extended to the two (2) children, being a commendable act of petitioner, should be
continued by him considering the vast financial resources at his disposal.30 (Emphasis supplied.)
Accordingly, only the following expenses of respondent may be allowed as deductions from the accrued
support pendente lite for petitioner and her children:
1âwphi1
Medical expenses of Susan Lim-Lua Php 42,450.71
Dental Expenses of Daniel Ryan 11,500.00
 Credit card purchases of Angelli 365,282.20 a) DISMISSING, for lack of merit, the case of Petition for Contempt of Court with Damages filed
by Susan Lim Lua against Danilo Y. Lua with docket no. SP. CA-G.R. No. 01154;
(Groceries and Dry Goods) 228,869.38
Credit Card purchases of Daniel Ryan b) GRANTING IN PART Danilo Y. Lua's Petition for Certiorari docketed as SP. CA-G.R. No.
01315. Consequently, the assailed Orders dated 27 September 2005 and 25 November 2005 of the
TOTAL Php 648,102.29 Regional Trial Court, Branch 14, Cebu City issued in Civil Case No. CEB-29346 entitled "Susan
Lim Lua versus Danilo Y. Lua, are hereby NULLIFIED and SET ASIDE, and instead a new one is
entered:
As to the contempt charge, we sustain the CA in holding that respondent is not guilty of indirect contempt.

Contempt of court is defined as a disobedience to the court by acting in opposition to its authority, justice,
and dignity. It signifies not only a willful disregard or disobedience of the court’s order, but such conduct
which tends to bring the authority of the court and the administration of law into disrepute or, in some
manner, to impede the due administration of justice.31 To constitute contempt, the act must be done willfully
and for an illegitimate or improper purpose.32 The good faith, or lack of it, of the alleged contemnor should
be considered.33
i. ORDERING the deduction of the amount of Php 648,102.29 from the support pendente
lite in arrears of Danilo Y. Lua to his wife, Susan Lim Lua and their two (2) children;
ii. ORDERING Danilo Y. Lua to resume payment of his monthly support of
Ph₱115,000.00 pesos starting from the time payment of this amount was deferred by him
subject to the deduction aforementioned.

Respondent admittedly ceased or suspended the giving of monthly support pendente lite granted by the trial iii. DIRECTING the immediate execution of this judgment.
court, which is immediately executory. However, we agree with the CA that respondent’s act was not
contumacious considering that he had not been remiss in actually providing for the needs of his children. It SO ORDERED."
is a matter of record that respondent continued shouldering the full cost of their education and even beyond
their basic necessities in keeping with the family’s social status. Moreover, respondent believed in good No pronouncement as to costs.
faith that the trial and appellate courts, upon equitable grounds, would allow him to offset the substantial
amounts he had spent or paid directly to his children.
SO ORDERED.
Respondent complains that petitioner is very much capacitated to generate income on her own because she
presently maintains a boutique at the Ayala Center Mall in Cebu City and at the same time engages in the
business of lending money. He also claims that the two children have finished their education and are now
employed in the family business earning their own salaries.

Suffice it to state that the matter of increase or reduction of support should be submitted to the trial court in
which the action for declaration for nullity of marriage was filed, as this Court is not a trier of facts. The
amount of support may be reduced or increased proportionately according to the reduction or increase of the
necessities of the recipient and the resources or means of the person obliged to support. 34 As we held in
Advincula v. Advincula35

…Judgment for support does not become final. The right to support is of such nature that its allowance is
essentially provisional; for during the entire period that a needy party is entitled to support, his or her
alimony may be modified or altered, in accordance with his increased or decreased needs, and with the
means of the giver. It cannot be regarded as subject to final determination.36

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated April 20, 2006 of the Court of
Appeals in CA-G.R. SP Nos. 01154 and 01315 is hereby MODIFIED to read as follows:

"WHEREFORE, judgment is hereby rendered:

119
 FIRST DIVISION
G.R. No. 201043 June 16, 2014
REPUBLIC OF THE PHILIPPINES, represented by the Armed Forces of the Philippines Finance
Center (AFPFC), Petitioner,
vs.
DAISY R. YAHON, Respondent.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review on certiorari under Rule 45 which seeks to nullify and set aside the
Decision1 dated November 29, 2011 and Resolution2 dated March 9, 2012 of the Court of Appeals (CA)
Mindanao Station in CA-G.R. SP No. 02953-MIN. The CA affirmed the orders and decision of the Regional
Trial Court (RTC) of Cagayan de Oro City, Branch 22 granting temporary and permanent protection orders,
and denying the motion to lift the said temporary protection order (TPO).
Daisy R. Yahon (respondent) filed a petition for the issuance of protection order under the provisions of
Republic Act (R.A.) No. 9262,3 otherwise known as the "Anti-Violence Against Women and Their Children
Act of 2004," against her husband, S/Sgt. Charles A. Yahon (S/Sgt. Yahon), an enlisted personnel of the
Philippine Army who retired in January 2006. Respondent and S/Sgt. Yahon were married on June 8, 2003.
The couple did not have any child but respondent has a daughter with her previous live-in partner.
On September 28, 2006, the RTC issued a TPO, as follows:
Finding the herein petition for the Issuance of Protection Order to be sufficient in form and substance and to
prevent great and irreparable injury to the petitioner, a TEMPORARY PROTECTION ORDER is forthwith
issued to respondent, S/SGT. CHARLES A. YAHON directing him to do the following acts:
1. Respondent is enjoined from threatening to commit or committing further acts of physical abuse
and violence against the petitioner;
2. To stay away at a distance of at least 500 meters from petitioner, her residence or her place of
work;
3. To refrain from harassing, annoying, intimidating, contacting or communicating with petitioner;
4. Respondent is prohibited from using or possessing any firearm or deadly weapon on occasions
not related to his job;
5. To provide reasonable financial spousal support to the petitioner.
The Local Police Officers and the Barangay Officials through the Chairman in the area where the petitioner
and respondent live at Poblacion, Claveria, Misamis Oriental and Bobuntogan, Jasaan, Misamis Oriental are
120
directed to respond to any request for assistance from the petitioner for the implementation of this order.
They are also directed to accompany the petitioner to their conjugal abode at Purok 2, Bobuntogan, Jasaan,
Misamis Oriental to get her personal belongings in order to insure the safety of the petitioner.
The Deputy Sheriff of this Court is ordered to immediately serve the Temporary Protection Order (TPO)
upon the respondent personally and to seek and obtain the assistance of law enforcement agents, if needed,
for purposes of effecting the smooth implementation of this order.
In the meantime, let copy of this order and petition be served upon the respondent for him to file an
OPPOSITION within a period of five (5) days from receipt hereof and let a Preliminary Conference and
hearing on the merits be set on October 17, 2006 at 2:00 o’clock in the afternoon.
To insure that petitioner can receive a fair share of respondent’s retirement and other benefits, the following
agencies thru their heads are directed to WITHHOLD any retirement, pension and other benefits of
respondent, S/SGT. CHARLES A. YAHON, a member of the Armed Forces of the Philippines assigned at
4ID, Camp Evangelista, Patag, Cagayan de Oro City until further orders from the court:
1. Commanding General/Officer of the Finance Center of the Armed Forces of the Philippines,
Camp Emilio Aguinaldo, Quezon City;
2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon City;
3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City.
VIOLATION OF THIS ORDER IS PUNISHABLE BY LAW.
IF THE RESPONDENT APPEARS WITHOUT COUNSEL ON THE DATE OF THE
PRELIMINARYCONFERENCE AND HEARING ON THE MERITS OF THE ISSUANCE OF A
PERMANENT PROTECTION ORDER, THE COURT SHALL NOT RESCHEDULE OR POSTPONE
THE PRELIMINARY CONFERENCE AND HEARING BUT SHALL APPOINT A LAWYER FOR THE
RESPONDENT AND IMMEDIATELY PROCEED WITH THE SAID HEARING.
IF THE RESPONDENT FAILS TO APPEAR ON THE DATE OF THE PRELIMINARY CONFERENCE
AND HEARING ON THE MERITS DESPITE PROPER NOTICE, THE COURT SHALL ALLOW EX-
PARTE PRESENTATION OF EVIDENCE BY THE PETITIONER AND RENDER JUDGMENT ON
THE BASIS OF THE PLEADINGS AND EVIDENCE ON RECORD. NO DELEGATION OF THE
RECEPTION OF EVIDENCE SHALL BE ALLOWED.
SO ORDERED.4 (Emphasis supplied.)
S/Sgt. Yahon, having been personally served with copy of the TPO, appeared during the scheduled pre-trial
but informed the court that he did not yet have a counsel and requested for time to hire his own counsel.
However, he did not hire a counsel nor file an opposition or answer to the petition. Because of his failure to
appear in the subsequent hearings of the case, the RTC allowed the ex-parte presentation of evidence to
determine the necessity of issuance of a Permanent Protection Order (PPO).
Meanwhile, as prayed for by respondent who manifested that S/Sgt. Yahon deliberately refused to give her
spousal support as directed in the TPO (she claimed that she had no source of livelihood since he had told
her to resign from her job and concentrate on keeping their house), the RTC issued another order directing
S/Sgt. Yahon to give respondent spousal support in the amount of ₱4,000.00 per month and fifty percent
(50%) of his retirement benefits which shall be automatically deducted and given directly to respondent.5
In her testimony, respondent also said that S/Sgt. Yahon never complied with the TPO as he continued
making threats and inflicting physical abuse on her person, and failed to give her spousal support as ordered
by the court.
On July 23, 2007, the RTC rendered its Decision, 6 as follows:
After careful review and scrutiny of the evidence presented in this case, this court finds that there is a need
to permanently protect the applicant, Daisy R. Yahon from further acts of violence that might be committed
by respondent against her. Evidences showed that respondent who was a member of the Armed Forces of
the Philippines assigned at the Headquarters 4ID Camp Evangelista, Cagayan de Oro City had been
repeatedly inflicting physical, verbal, emotional and economic abuse and violence upon the petitioner.
Respondent in several instances had slapped, mauled and punched petitioner causing her physical harm.
Exhibits G and D are medical certificates showing physical injuries suffered by petitioner inflicted by the
respondent at instances of their marital altercations. Respondent at the height of his anger often poked a gun
on petitioner and threatened to massacre her and her child causing them to flee for their lives and sought
refuge from other people. He had demanded sex from petitioner at an unreasonable time when she was sick
and chilling and when refused poked a gun at her. Several police blotters were offered as evidence by
petitioner documenting the incidents when she was subjected to respondent’s ill temper and ill treatment.
Verbally, petitioner was not spared from respondent’s abuses by shouting at her that he was wishing she
would die and he would celebrate if it happens and by calling and sending her threatening text messages.
These incidents had caused petitioner great psychological trauma causing her [to] fear for her life and these
forced her to seek refuge from the court for protection. Economically, petitioner was also deprived by
respondent of her spousal support despite order of the court directing him to give a monthly support of
Php4,000.00. In view of the foregoing, this court finds a need to protect the life of the petitioner not only
physically but also emotionally and psychologically.
Based on the evidence presented, both oral and documentary, and there being no controverting evidence
presented by respondent, this Court finds that the applicant has established her case by preponderance of
evidence.
WHEREFORE, premises considered, judgment is hereby rendered GRANTING the petition, thus, pursuant
to Sec. 30 of A.M. No. 04-10-1-SC, let a PERMANENT PROTECTION ORDER be issued immediately
and respondent, S/Sgt. CHARLES A.YAHON is ordered to give to petitioner, DAISY R. YAHON the
amount of FOUR THOUSAND PESOS (Php4,000.00) per month by way of spousal support.
Pursuant to the order of the court dated February 6, 2007, respondent, S/Sgt. Charles A. Yahon is directed to
give it to petitioner 50% of whatever retirement benefits and other claims that may be due or released to him
from the government and the said share of petitioner shall be automatically deducted from respondent’s
benefits and claims and be given directly to the petitioner, Daisy R. Yahon.
121
Let copy of this decision be sent to the Commanding General/Officer of Finance Center of the Armed
Forces of the Philippines, Camp Emilio Aguinaldo, Quezon City; the Management of RSBS, Camp Emilio
Aguinaldo, Quezon City and the Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City for
their guidance and strict compliance.
SO ORDERED.7 (Emphasis supplied.)
Herein petitioner Armed Forces of the Philippines Finance Center (AFPFC), assisted by the Office of the
Judge Advocate General (OTJAG), AFP, filed before the RTC a Manifestation and Motion (To Lift
Temporary Protection Order Against the AFP)8 dated November 10, 2008. Stating that it was making a
limited and special appearance, petitioner manifested that on August 29, 2008, it furnished the AFP Pension
and Gratuity Management Center (PGMC) copy of the TPO for appropriate action. The PGMC, on
September 2, 2008, requested the Chief, AFPFC the temporary withholding of the thirty-six (36) Months
Lump Sum (MLS) due to S/Sgt. Yahon. Thereafter, on October 29, 2008, PGMC forwarded a letter to the
Chief of Staff, AFP for the OTJAG for appropriate action on the TPO, and requesting for legal opinion as to
the propriety of releasing the 36 MLS of S/Sgt. Yahon. Petitioner informed the RTC that S/Sgt. Yahon’s
check representing his 36 MLS had been processed and is ready for payment by the AFPFC, but to date said
check has not been claimed by respondent.
Petitioner further asserted that while it has initially discharged its obligation under the TPO, the RTC had
not acquired jurisdiction over the military institution due to lack of summons, and hence the AFPFC cannot
be bound by the said court order. Additionally, petitioner contended that the AFPFC is not a party-in-interest
and is a complete stranger to the proceedings before the RTC on the issuance of TPO/PPO. Not being
impleaded in the case, petitioner lamented that it was not afforded due process and it was thus improper to
issue execution against the AFPFC. Consequently, petitioner emphasized its position that the AFPFC cannot
be directed to comply with the TPO without violating its right to procedural due process.
In its Order9 dated December 17, 2008, the RTC denied the aforesaid motion for having been filed out of
time. It noted that the September 28, 2006 TPO and July 23, 2007 Decision granting Permanent Protection
Order (PPO) to respondent had long become final and executory.
Petitioner’s motion for reconsideration was likewise denied under the RTC’s Order10 dated March 6, 2009.
On May 27, 2009, petitioner filed a petition for certiorari before the CA praying for the nullification of the
aforesaid orders and decision insofar as it directs the AFPFC to automatically deduct from S/Sgt. Yahon’s
retirement and pension benefits and directly give the same to respondent as spousal support, allegedly issued
with grave abuse of discretion amounting to lack of jurisdiction. Respondent filed her Comment with Prayer
for Issuance of Preliminary Injunction, manifesting that there is no information as to whether S/Sgt. Yahon
already received his retirement benefit and that the latter has repeatedly violated the TPO, particularly on the
provision of spousal support.
After due hearing, the CA‘s Twenty-Second Division issued a Resolution11 granting respondent’s
application, viz:
Upon perusal of the respective pleadings filed by the parties, the Court finds meritorious private
respondent’s application for the issuance of an injunctive relief. While the 36-month lump sum retirement
benefits of S/Sgt. Charles A. Yahon has already been given to him, yet as admitted by petitioner itself, the
monthly pension after the mentioned retirement benefits has not yet been released to him. It appears that the
release of such pension could render ineffectual the eventual ruling of the Court in this Petition.
IN VIEW OF THE FOREGOING, let a WRIT OF PRELIMINARY INJUNCTION issue enjoining the
Armed Forces of the Philippines Finance Center, its employees, agents, representatives, and any all persons
acting on its behalf, from releasing the remaining pension that may be due to S/Sgt. Charles A. Yahon.
SO ORDERED.12
By Decision dated November 29, 2011, the CA denied the petition for certiorari and affirmed the assailed
orders and decision of the RTC. The CA likewise denied petitioner’s motion for reconsideration.
In this petition, the question of law presented is whether petitioner military institution may be ordered to
automatically deduct a percentage from the retirement benefits of its enlisted personnel, and to give the same
directly to the latter’s lawful wife as spousal support in compliance with a protection order issued by the
RTC pursuant to R.A. No. 9262.
A protection order is an order issued by the court to prevent further acts of violence against women and their
children, their family or household members, and to grant other necessary relief. Its purpose is to safeguard
the offended parties from further harm, minimize any disruption in their daily life and facilitate the
opportunity and ability to regain control of their life. 13 The protection orders issued by the court may be a
Temporary Protection Order (TPO) or a Permanent Protection Order (PPO), while a protection order that
may be issued by the barangay shall be known as a Barangay Protection Order (BPO). 14
Section 8 of R.A. No. 9262 enumerates the reliefs that may be included in the TPO, PPO or BPO, to wit:
(a) Prohibition of the respondent from threatening to commit or committing, personally or through
another, any of the acts mentioned in Section 5 of this Act;
(b) Prohibition of the respondent from harassing, annoying, telephoning, contacting or otherwise
communicating with the petitioner, directly or indirectly;
(c) Removal and exclusion of the respondent from the residence of the petitioner, regardless of
ownership of the residence, either temporarily for the purpose of protecting the petitioner, or
permanently where no property rights are violated, and if respondent must remove personal effects
from the residence, the court shall direct a law enforcement agent to accompany the respondent to
the residence, remain there until respondent has gathered his things and escort respondent from the
residence;
(d) Directing the respondent to stay away from petitioner and any designated family or household
member at a distance specified by the court, and to stay away from the residence, school, place of
employment, or any specified place frequented by the petitioner and any designated family or
household member;
(e) Directing lawful possession and use by petitioner of an automobile and other essential personal
effects, regardless of ownership, and directing the appropriate law enforcement officer to
122
accompany the petitioner to the residence of the parties to ensure that the petitioner is safely
restored to the possession of the automobile and other essential personal effects, or to supervise the
petitioner’s or respondent’s removal of personal belongings;
(f) Granting a temporary or permanent custody of a child/children to the petitioner;
(g) Directing the respondent to provide support to the woman and/or her child if entitled to legal
support. Notwithstanding other laws to the contrary, the court shall order an appropriate percentage
of the income or salary of the respondent to be withheld regularly by the respondent's employer for
the same to be automatically remitted directly to the woman. Failure to remit and/or withhold or
any delay in the remittance of support to the woman and/or her child without justifiable cause shall
render the respondent or his employer liable for indirect contempt of court;
(h) Prohibition of the respondent from any use or possession of any firearm or deadly weapon and
order him to surrender the same to the court for appropriate disposition by the court, including
revocation of license and disqualification to apply for any license to use or possess a firearm. If the
offender is a law enforcement agent, the court shall order the offender to surrender his firearm and
shall direct the appropriate authority to investigate on the offender and take appropriate action on
matter;
(i) Restitution for actual damages caused by the violence inflicted, including, but not limited to,
property damage, medical expenses, child care expenses and loss of income;
(j) Directing the DSWD or any appropriate agency to provide petitioner temporary shelter and
other social services that the petitioner may need; and
(k) Provision of such other forms of relief as the court deems necessary to protect and provide for
the safety of the petitioner and any designated family or household member, provided petitioner
and any designated family or household member consents to such relief. (Emphasis supplied.)
Petitioner argues that it cannot comply with the RTC’s directive for the automatic deduction of 50% from
S/Sgt. Yahon’s retirement benefits and pension to be given directly to respondent, as it contravenes an
explicit mandate under the law governing the retirement and separation of military personnel.
The assailed provision is found in Presidential Decree (P.D.) No. 1638,15 which states: Section 31. The
benefits authorized under this Decree, except as provided herein, shall not be subject to attachment,
garnishment, levy, execution or any tax whatsoever; neither shall they be assigned, ceded, or conveyed to
any third person: Provided, That if a retired or separated officer or enlisted man who is entitled to any
benefit under this Decree has unsettled money and/or property accountabilities incurred while in the active
service, not more than fifty per centum of the pension gratuity or other payment due such officer or enlisted
man or his survivors under this Decree may be withheld and be applied to settle such accountabilities.
(Emphasis supplied.)
A similar provision is found in R.A. No. 8291, otherwise known as the "Government Service Insurance
System Act of 1997," which reads:
SEC. 39. Exemption from Tax, Legal Process and Lien -- x x x
xxxx
The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to
the benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other processes
issued by the courts, quasi-judicial agencies or administrative bodies including Commission on Audit
(COA) disallowances and from all financial obligations of the members, including his pecuniary
accountability arising from or caused or occasioned by his exercise or performance of his official functions
or duties, or incurred relative to or in connection with his position or work except when his monetary
liability, contractual or otherwise, is in favor of the GSIS.
In Sarmiento v. Intermediate Appellate Court,16 we held that a court order directing the Philippine National
Bank to refrain from releasing to petitioner all his retirement benefits and to deliver one-half of such
monetary benefits to plaintiff as the latter’s conjugal share is illegal and improper, as it violates Section 26
of CA 186 (old GSIS Law) which exempts retirement benefits from execution.
The foregoing exemptions have been incorporated in the 1997 Rules of Civil Procedure, as amended, which
governs execution of judgments and court orders. Section 13 of Rule 39 enumerates those properties which
are exempt from execution:
SEC. 13. Property exempt from execution.– Except as otherwise expressly provided by law, the following
property, and no other, shall be exempt from execution:
xxxx
(l) The right to receive legal support, or money or property obtained as such support, or any pension or
gratuity from the Government;(Emphasis supplied.)
It is basic in statutory construction that in case of irreconcilable conflict between two laws, the later
enactment must prevail, being the more recent expression of legislative will. 17 Statutes must be so construed
and harmonized with other statutes as to form a uniform system of jurisprudence. 18 However, if several laws
cannot be harmonized, the earlier statute must yield to the later enactment. The later law is the latest
expression of the legislative will.19
We hold that Section 8(g) of R.A. No. 9262, being a later enactment, should be construed as laying down an
exception to the general rule above-stated that retirement benefits are exempt from execution. The law itself
declares that the court shall order the withholding of a percentage of the income or salary of the respondent
by the employer, which shall be automatically remitted directly to the woman "[n]otwithstanding other laws
to the contrary."
Petitioner further contends that the directive under the TPO to segregate a portion of S/Sgt. Yahon’s
retirement benefits was illegal because said moneys remain as public funds, citing the case of Pacific
Products v. Ong.20 In that case, this Court sustained the CA when it held that the garnishment of the amount
of ₱10,500 payable to BML Trading and Supply while it was still in the possession of the Bureau of
Telecommunications was illegal and therefore, null and void. The CA therein relied on the previous rulings
123
in Director of Commerce and Industry v. Concepcion21 and Avendano v. Alikpala, et al.22 wherein this Court
declared null and void the garnishment of the salaries of government employees.
Citing the two aforementioned cases, we thus declared in Pacific Products:
A rule, which has never been seriously questioned, is that money in the hands of public officers, although it
may be due government employees, is not liable to the creditors of these employees in the process of
garnishment. One reason is, that the State, by virtue of its sovereignty may not be sued in its own courts
except by express authorization by the Legislature, and to subject its officers to garnishment would be to
permit indirectly what is prohibited directly. Another reason is that moneys sought to be garnished, as long
as they remain in the hands of the disbursing officer of the Government, belong to the latter, although the
defendant in garnishment may be entitled to a specific portion thereof. And still another reason which covers
both of the foregoing is that every consideration of public policy forbids it. 23
We disagree.
Section 8(g) of R.A. No. 9262 used the general term "employer," which includes in its coverage the military
institution, S/Sgt. Yahon’s employer. Where the law does not distinguish, courts should not distinguish.
Thus, Section 8(g) applies to all employers, whether private or government.
It bears stressing that Section 8(g) providing for spousal and child support, is a support enforcement
legislation.1âwphi1 In the United States, provisions of the Child Support Enforcement Act24 allow
garnishment of certain federal funds where the intended recipient has failed to satisfy a legal obligation of
child support. As these provisions were designed "to avoid sovereign immunity problems" and provide that
"moneys payable by the Government to any individual are subject to child support enforcement
proceedings," the law is clearly intended to "create a limited waiver of sovereign immunity so that state
courts could issue valid orders directed against Government agencies attaching funds in their possession." 25
This Court has already ruled that R.A. No. 9262 is constitutional and does not violate the equal protection
clause. In Garcia v. Drilon26 the issue of constitutionality was raised by a husband after the latter failed to
obtain an injunction from the CA to enjoin the implementation of a protection order issued against him by
the RTC. We ruled that R.A. No. 9262 rests on real substantial distinctions which justify the classification
under the law: the unequal power relationship between women and men; the fact that women are more likely
than men to be victims of violence; and the widespread bias and prejudice against women.
We further held in Garcia that the classification is germane to the purpose of the law, viz:
The distinction between men and women is germane to the purpose of R.A. 9262, which is to address
violence committed against women and children, spelled out in its Declaration of Policy, as follows:
SEC. 2. Declaration of Policy.– It is hereby declared that the State values the dignity of women and children
and guarantees full respect for human rights. The State also recognizes the need to protect the family and its
members particularly women and children, from violence and threats to their personal safety and security.
Towards this end, the State shall exert efforts to address violence committed against women and children in
keeping with the fundamental freedoms guaranteed under the Constitution and the provisions of the
Universal Declaration of Human Rights, the Convention on the Elimination of All Forms of Discrimination
Against Women, Convention on the Rights of the Child and other international human rights instruments of
which the Philippines is a party. 27

Under R.A. No. 9262, the provision of spousal and child support specifically address one form of violence
committed against women – economic abuse.

D. "Economic abuse" refers to acts that make or attempt to make a woman financially dependent which
includes, but is not limited to the following:

1. Withdrawal of financial support or preventing the victim from engaging in any legitimate
profession, occupation, business or activity, except in cases wherein the other spouse/partner
objects on valid, serious and moral grounds as defined in Article 73 of the Family Code;

2. Deprivation or threat of deprivation of financial resources and the right to the use and enjoyment
of the conjugal, community or property owned in common;

3. Destroying household property;

4. Controlling the victims' own money or properties or solely controlling the conjugal money or
properties.28

The relief provided in Section 8(g) thus fulfills the objective of restoring the dignity of women who are
victims of domestic violence and provide them continued protection against threats to their personal safety
and security.

"The scope of reliefs in protection orders is broadened to ensure that the victim or offended party is afforded
all the remedies necessary to curtail access by a perpetrator to the victim. This serves to safeguard the victim
from greater risk of violence; to accord the victim and any designated family or household member safety in
the family residence, and to prevent the perpetrator from committing acts that jeopardize the employment
and support of the victim. It also enables the court to award temporary custody of minor children to protect
the children from violence, to prevent their abduction by the perpetrator and to ensure their financial
support."29

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated November 29, 2011 and
Resolution dated March 9, 2012 of the Court of Appeals Mindanao Station in CA-G.R. SP No. 02953-MIN
are AFFIRMED and UPHELD.

No costs.

SO ORDERED.

124
 FIRST DIVISION
G.R. No. 180284, September 11, 2013
NARCISO SALAS, Petitioners, v.ANNABELLE MATUSALEM, Respondent.
DECISION
VILLARAMA, JR., J.:
1
Before the Court is a petition for review on certiorari which seeks to reverse and set aside the Decision dated
July 18, 2006 and Resolution2 dated October 19, 2007 of the Court of Appeals (CA) in CA-G.R. CV No.
64379.
The factual antecedents:
On May 26, 1995, Annabelle Matusalem (respondent) filed a complaint for Support/Damages against
Narciso Salas (petitioner) in the Regional Trial Court (RTC) ofCabanatuan City (Civil Case No. 2124-AF).
Respondent claimed that petitioner is. the father of her son Christian Paulo Salas who was born on
December 28, 1994. Petitioner, already 56 years old at the time, enticed her as she was then only 24 years
old, making her believe that he is a widower. Petitioner rented an apartment where respondent stayed and
shouldered all expenses in the delivery of their child, including the cost of caesarian operation and hospital
confinement. However, when respondent refused the offer of petitioner’s family to take the child from her,
petitioner abandoned respondent and her child and left them to the mercy of relatives and friends.
Respondent further alleged that she attempted suicide due to depression but still petitioner refused to support
her and their child.
Respondent thus prayed for support pendente lite and monthly support in the amount of P20,000.00, as well
as actual, moral and exemplary damages, and attorney’s fees.
Petitioner filed his answer4 with special and affirmative defenses and counterclaims. He described
respondent as a woman of loose morals, having borne her first child also out of wedlock when she went to
work in Italy. Jobless upon her return to the country, respondent spent time riding on petitioner’s jeepney
which was then being utilized by a female real estate agent named Felicisima de Guzman. Respondent had
seduced a senior police officer in San Isidro and her charge of sexual abuse against said police officer was
later withdrawn in exchange for the quashing of drug charges against respondent’s brother-in-law who was
then detained at the municipal jail. It was at that time respondent introduced herself to petitioner whom she
pleaded for charity as she was pregnant with another child. Petitioner denied paternity of the child Christian
Paulo; he was motivated by no other reason except genuine altruism when he agreed to shoulder the
expenses for the delivery of said child, unaware of respondent’s chicanery and deceit designed to
“scandalize” him in exchange for financial favor.
At the trial, respondent and her witness Grace Murillo testified. Petitioner was declared to have waived his
right to present evidence and the case was considered submitted for decision based on respondent’s
evidence.
125
Respondent testified that she first met petitioner at the house of his “kumadre” Felicisima de Guzman at
Bgy. Malapit, San Isidro, Nueva Ecija. During their subsequent meeting, petitioner told her he is already a
widower and he has no more companion in life because his children are all grown-up. She also learned that
petitioner owns a rice mill, a construction business and a housing subdivision (petitioner offered her a job at
their family-owned Ma. Cristina Village). Petitioner at the time already knows that she is a single mother as
she had a child by her former boyfriend in Italy. He then brought her to a motel, promising that he will take
care of her and marry her. She believed him and yielded to his advances, with the thought that she and her
child will have a better life. Thereafter, they saw each other weekly and petitioner gave her money for her
child. When she became pregnant with petitioner’s child, it was only then she learned that he is in fact not a
widower. She wanted to abort the baby but petitioner opposed it because he wanted to have another child. 5
On the fourth month of her pregnancy, petitioner rented an apartment where she stayed with a housemaid;
he also provided for all their expenses. She gave birth to their child on December 28, 1994 at the Good
Samaritan Hospital in Cabanatuan City. Before delivery, petitioner even walked her at the hospital room and
massaged her stomach, saying he had not done this to his wife. She filled out the form for the child’s birth
certificate and wrote all the information supplied by petitioner himself. It was also petitioner who paid the
hospital bills and drove her baby home. He was excited and happy to have a son at his advanced age who is
his “look-alike,” and this was witnessed by other boarders, visitors and Grace Murillo, the owner of the
apartment unit petitioner rented. However, on the 18th day after the baby’s birth, petitioner went to Baguio
City for a medical check-up. He confessed to her daughter and eventually his wife was also informed about
his having sired an illegitimate child. His family then decided to adopt the baby and just give respondent
money so she can go abroad. When she refused this offer, petitioner stopped seeing her and sending money
to her. She and her baby survived through the help of relatives and friends. Depressed, she tried to commit
suicide by drug overdose and was brought to the hospital by Murillo who paid the bill. Murillo sought the
help of the Cabanatuan City Police Station which set their meeting with petitioner. However, it was only
petitioner’s wife who showed up and she was very mad, uttering unsavory words against respondent. 6
Murillo corroborated respondent’s testimony as to the payment by petitioner of apartment rental, his weekly
visits to respondent and financial support to her, his presence during and after delivery of respondent’s baby,
respondent’s attempted suicide through sleeping pills overdose and hospitalization for which she paid the
bill, her complaint before the police authorities and meeting with petitioner’s wife at the headquarters.7
On April 5, 1999, the trial court rendered its decision 8 in favor of respondent, the dispositive portion of
which reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the
defendant as follows:
1. Ordering the defendant to give as monthly support of TWO THOUSAND (P2,000.00) PESOS for
the child Christian Paulo through the mother;
2. Directing the defendant to pay the plaintiff the sum of P20,000.00 by way of litigation expenses;
and
3. To pay the costs of suit.
SO ORDERED.9
Petitioner appealed to the CA arguing that: (1) the trial court decided the case without affording him the
right to introduce evidence on his defense; and (2) the trial court erred in finding that petitioner is the
putative father of Christian Paulo and ordering him to give monthly support.
By Decision dated July 18, 2006, the CA dismissed petitioner’s appeal. The appellate court found no reason
to disturb the trial court’s exercise of discretion in denying petitioner’s motion for postponement on April
17, 1998, the scheduled hearing for the initial presentation of defendant’s evidence, and the motion for
reconsideration of the said order denying the motion for postponement and submitting the case for decision.
On the paternity issue, the CA affirmed the trial court’s ruling that respondent satisfactorily established the
illegitimate filiation of her son Christian Paulo, and consequently no error was committed by the trial court
in granting respondent’s prayer for support. The appellate court thus held:chanRoblesvirtualLawlibrary
Christian Paulo, in instant case, does not enjoy the benefit of a record of birth in the civil registry which
bears acknowledgment signed by Narciso Salas. He cannot claim open and continuous possession of the
status of an illegitimate child.
It had been established by plaintiff’s evidence, however, that during her pregnancy, Annabelle was provided
by Narciso Salas with an apartment at a rental of P1,500.00 which he paid for (TSN, October 6, 1995, p. 18).
Narciso provided her with a household help with a salary of P1,500.00 a month (TSN, October 6, 1995,
ibid). He also provided her a monthly food allowance of P1,500.00 (Ibid, p. 18). Narciso was with
Annabelle at the hospital while the latter was in labor, “walking” her around and massaging her belly (Ibid,
p. 11). Narciso brought home Christian Paulo to the rented apartment after Annabelle’s discharge from the
hospital. People living in the same apartment units were witnesses to Narciso’s delight to father a son at his
age which was his “look alike”. It was only after the 18th day when Annabelle refused to give him Christian
Paulo that Narciso withdrew his support to him and his mother.
Said testimony of Annabelle aside from having been corroborated by Grace Murillo, the owner of the
apartment which Narciso rented, was never rebutted on record. Narciso did not present any evidence, verbal
or documentary, to repudiate plaintiff’s evidence.
In the cases of Lim vs. CA (270 SCRA 1) and Rodriguez vs. CA (245 SCRA 150), the Supreme Court made
it clear that Article 172 of the Family Code is an adaptation of Article 283 of the Civil Code. Said legal
provision provides that the father is obliged to recognize the child as his natural child x x “3) when the child
has in his favor any evidence or proof that the defendant is his father”.
In fact, in Ilano vs. CA (230 SCRA 242, 258-259), it was held that–
“The last paragraph of Article 283 contains a blanket provision that practically covers all the other cases in
the preceding paragraphs. ‘Any other evidence or proof’ that the defendant is the father is broad enough to
render unnecessary the other paragraphs of this article. When the evidence submitted in the action for
compulsory recognition is not sufficient to meet [the] requirements of the first three paragraphs, it may still
be enough under the last paragraph. This paragraph permits hearsay and reputation evidence, as provided in
the Rules of Court, with respect to illegitimate filiation.”
As a necessary consequence of the finding that Christian Paulo is the son of defendant Narciso Salas, he is
entitled to support from the latter (Ilano vs. CA, supra).
It “shall be demandable from the time the person who has the right to recover the same needs it for
maintenance x x.” (Art. 203, Family Code of the Philippines).10
Petitioner filed a motion for reconsideration but it was denied by the CA.
Hence, this petition submitting the following arguments:chanRoblesvirtualLawlibrary
1. THE VENUE OF THE CASE WAS IMPROPERLY LAID BEFORE THE REGIONAL TRIAL COURT
OF CABANATUAN CITY CONSIDERING THAT BOTH PETITIONER AND RESPONDENT ARE
ACTUAL RESIDENTS OF BRGY. MALAPIT, SAN ISIDRO, NUEVA ECIJA.
126
2. THE HONORABLE COURT OF APPEALS ERRED IN PRONOUNCING THAT PETITIONER WAS
AFFORDED THE FULL MEASURE OF HIS RIGHT TO DUE PROCESS OF LAW AND IN
UPHOLDING THAT THE TRIAL COURT DID NOT GRAVELY ABUSE ITS DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DECIDED THE INSTANT CASE
WITHOUT AFFORDING PETITIONER THE RIGHT TO INTRODUCE EVIDENCE IN HIS DEFENSE.
3. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE FILIATION OF
CHRISTIAN PAULO WAS DULY ESTABLISHED PURSUANT TO ARTICLE 175 IN RELATION TO
ARTICLE 172 OF THE FAMILY CODE AND EXISTING JURISPRUDENCE AND THEREFORE
ENTITLED TO SUPPORT FROM THE PETITIONER.11
We grant the petition.
It is a legal truism that the rules on the venue of personal actions are fixed for the convenience of the
plaintiffs and their witnesses. Equally settled, however, is the principle that choosing the venue of an action
is not left to a plaintiff’s caprice; the matter is regulated by the Rules of Court. 12
In personal actions such as the instant case, the Rules give the plaintiff the option of choosing where to file
his complaint. He can file it in the place (1) where he himself or any of them resides, or (2) where the
defendant or any of the defendants resides or may be found. 13 The plaintiff or the defendant must be
residents of the place where the action has been instituted at the time the action is commenced.14
However, petitioner raised the issue of improper venue for the first time in the Answer itself and no prior
motion to dismiss based on such ground was filed. Under the Rules of Court before the 1997 amendments,
an objection to an improper venue must be made before a responsive pleading is filed. Otherwise, it will be
deemed waived.15 Not having been timely raised, petitioner’s objection on venue is therefore deemed
waived.
As to the denial of the motion for postponement filed by his counsel for the resetting of the initial
presentation of defense evidence on April 17, 1998, we find that it was not the first time petitioner’s motion
for postponement was denied by the trial court.
Records disclosed that after the termination of the testimony of respondent’s last witness on November 29,
1996, the trial court as prayed for by the parties, set the continuation of hearing for the reception of evidence
for the defendant (petitioner) on January 27, February 3, and February 10, 1997. In the Order dated
December 17, 1996, petitioner was advised to be ready with his evidence at those hearing dates earlier
scheduled. At the hearing on January 27, 1997, petitioner’s former counsel, Atty. Rolando S. Bala, requested
for the cancellation of the February 3 and 10, 1997 hearings in order to give him time to prepare for his
defense, which request was granted by the trial court which thus reset the hearing dates to March 3, 14 and
17, 1997. On March 3, 1997, upon oral manifestation by Atty. Bala and without objection from respondent’s
counsel, Atty. Feliciano Wycoco, the trial court again reset the hearing to March 14 and 17, 1997. With the
non-appearance of both petitioner and Atty. Bala on March 14, 1997, the trial court upon oral manifestation
by Atty. Wycoco declared their absence as a waiver of their right to present evidence and accordingly
deemed the case submitted for decision.16
On July 4, 1997, Atty. Bala withdrew as counsel for petitioner and Atty. Rafael E. Villarosa filed his
appearance as his new counsel on July 21, 1997. On the same date he filed entry of appearance, Atty.
Villarosa filed a motion for reconsideration of the March 14, 1997 Order pleading for liberality and
magnanimity of the trial court, without offering any explanation for Atty. Bala’s failure to appear for the
initial presentation of their evidence. The trial court thereupon reconsidered its March 14, 1997 Order,
finding it better to give petitioner a chance to present his evidence. On August 26, 1997, Atty. Villarosa
received a notice of hearing for the presentation of their evidence scheduled on September 22, 1997. On
August 29, 1997, the trial court received his motion requesting that the said hearing be re-set to October 10,
1997 for the reason that he had requested the postponement of a hearing in another case which was
incidentally scheduled on September 22, 23 and 24, 1997. As prayed for, the trial court reset the hearing to
October 10, 1997. On said date, however, the hearing was again moved to December 15, 1997. On February
16, 1998, the trial court itself reset the hearing to April 17, 1998 since it was unclear whether Atty. Wycoco
received a copy of the motion.17
On April 17, 1998, petitioner and his counsel failed to appear but the trial court received on April 16, 1998
an urgent motion to cancel hearing filed by Atty. Villarosa. The reason given by the latter was the scheduled
hearing on the issuance of writ of preliminary injunction in another case under the April 8, 1998 Order
issued by the RTC of Gapan, Nueva Ecija, Branch 36 in Civil Case No. 1946. But as clearly stated in the
said order, it was the plaintiffs therein who requested the postponement of the hearing and it behoved Atty.
Villarosa to inform the RTC of Gapan that he had a previous commitment considering that the April 17,
1998 hearing was scheduled as early as February 16, 1998. Acting on the motion for postponement, the trial
court denied for the second time petitioner’s motion for postponement. Even at the hearing of their motion
for reconsideration of the April 17, 1998 Order on September 21, 1998, Atty. Villarosa failed to appear and
instead filed another motion for postponement. The trial court thus ordered that the case be submitted for
decision stressing that the case had long been pending and that petitioner and his counsel have been given
opportunities to present their evidence. It likewise denied a second motion for reconsideration filed by Atty.
Villarosa, who arrived late during the hearing thereof on December 4, 1998.18
A motion for continuance or postponement is not a matter of right, but a request addressed to the sound
discretion of the court. Parties asking for postponement have absolutely no right to assume that their motions
would be granted. Thus, they must be prepared on the day of the hearing.19 Indeed, an order declaring a
party to have waived the right to present evidence for performing dilatory actions upholds the trial court’s
duty to ensure that trial proceeds despite the deliberate delay and refusal to proceed on the part of one
party.20
Atty. Villarosa’s plea for liberality was correctly rejected by the trial court in view of his own negligence in
failing to ensure there will be no conflict in his trial schedules. As we held in Tiomico v. Court of
Appeals21:chanRoblesvirtualLawlibrary
Motions for postponement are generally frowned upon by Courts if there is evidence of bad faith, malice or
inexcusable negligence on the part of the movant. The inadvertence of the defense counsel in failing to take
note of the trial dates and in belatedly informing the trial court of any conflict in his schedules of trial or
court appearances, constitutes inexcusable negligence. It should be borne in mind that a client is bound by
his counsel’s conduct, negligence and mistakes in handling the case.22
With our finding that there was no abuse of discretion in the trial court’s denial of the motion for
postponement filed by petitioner’s counsel, petitioner’s contention that he was deprived of his day in court
must likewise fail. The essence of due process is that a party is given a reasonable opportunity to be heard
and submit any evidence one may have in support of one’s defense. Where a party was afforded an
opportunity to participate in the proceedings but failed to do so, he cannot complain of deprivation of due
process. If the opportunity is not availed of, it is deemed waived or forfeited without violating the
constitutional guarantee.23
127
We now proceed to the main issue of whether the trial and appellate courts erred in ruling that respondent’s
evidence sufficiently proved that her son Christian Paulo is the illegitimate child of petitioner.
Under Article 175 of the Family Code of the Philippines, illegitimate filiation may be established in the
same way and on the same evidence as legitimate children.
Article 172 of the Family Code of the Philippines states:chanRoblesvirtualLawlibrary
The filiation of legitimate children is established by any of the following:
(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed
by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall be proved by:
(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws. (Underscoring supplied.)
Respondent presented the Certificate of Live Birth24 (Exhibit “A-1”) of Christian Paulo Salas in which the
name of petitioner appears as his father but which is not signed by him. Admittedly, it was only respondent
who filled up the entries and signed the said document though she claims it was petitioner who supplied the
information she wrote therein.
We have held that a certificate of live birth purportedly identifying the putative father is not competent
evidence of paternity when there is no showing that the putative father had a hand in the preparation of the
certificate.25 Thus, if the father did not sign in the birth certificate, the placing of his name by the mother,
doctor, registrar, or other person is incompetent evidence of paternity. 26 Neither can such birth certificate be
taken as a recognition in a public instrument27 and it has no probative value to establish filiation to the
alleged father.28
As to the Baptismal Certificate29 (Exhibit “B”) of Christian Paulo Salas also indicating petitioner as the
father, we have ruled that while baptismal certificates may be considered public documents, they can only
serve as evidence of the administration of the sacraments on the dates so specified. They are not necessarily
competent evidence of the veracity of entries therein with respect to the child’s paternity. 30
The rest of respondent’s documentary evidence consists of handwritten notes and letters, hospital bill and
photographs taken of petitioner and respondent inside their rented apartment unit.
Pictures taken of the mother and her child together with the alleged father are inconclusive evidence to
prove paternity.31 Exhibits “E” and “F”32 showing petitioner and respondent inside the rented apartment unit
thus have scant evidentiary value. The Statement of Account33 (Exhibit “C”) from the Good Samaritan
General Hospital where respondent herself was indicated as the payee is likewise incompetent to prove that
petitioner is the father of her child notwithstanding petitioner’s admission in his answer that he shouldered
the expenses in the delivery of respondent’s child as an act of charity.
As to the handwritten notes34 (Exhibits “D” to “D-13”) of petitioner and respondent showing their exchange
of affectionate words and romantic trysts, these, too, are not sufficient to establish Christian Paulo’s filiation
to petitioner as they were not signed by petitioner and contained no statement of admission by petitioner that
he is the father of said child. Thus, even if these notes were authentic, they do not qualify under Article 172
(2) vis-à- vis Article 175 of the Family Code which admits as competent evidence of illegitimate filiation an
admission of filiation in a private handwritten instrument signed by the parent concerned. 35
Petitioner’s reliance on our ruling in Lim v. Court of Appeals36 is misplaced. In the said case, the
handwritten letters of petitioner contained a clear admission that he is the father of private respondent’s
daughter and were signed by him. The Court therein considered the totality of evidence which established
beyond reasonable doubt that petitioner was indeed the father of private respondent’s daughter. On the other
hand, in Ilano v. Court of Appeals,37 the Court sustained the appellate court’s finding that private
respondent’s evidence to establish her filiation with and paternity of petitioner was overwhelming,
particularly the latter’s public acknowledgment of his amorous relationship with private respondent’s
mother, and private respondent as his own child through acts and words, her testimonial evidence to that
effect was fully supported by documentary evidence. The Court thus ruled that respondent had adduced
sufficient proof of continuous possession of status of a spurious child.
Here, while the CA held that Christian Paulo Salas could not claim open and continuous possession of status
of an illegitimate child, it nevertheless considered the testimonial evidence sufficient proof to establish his
filiation to petitioner.
An illegitimate child is now also allowed to establish his claimed filiation by “any other means allowed by
the Rules of Court and special laws,” like his baptismal certificate, a judicial admission, a family Bible in
which his name has been entered, common reputation respecting his pedigree, admission by silence, the
testimonies of witnesses, and other kinds of proof admissible under Rule 130 of the Rules of
Court.38Reviewing the records, we find the totality of respondent’s evidence insufficient to establish that
petitioner is the father of Christian Paulo.
The testimonies of respondent and Murillo as to the circumstances of the birth of Christian Paulo,
petitioner’s financial support while respondent lived in Murillo’s apartment and his regular visits to her at
the said apartment, though replete with details, do not approximate the “overwhelming evidence,
documentary and testimonial” presented in Ilano. In that case, we sustained the appellate court’s ruling
anchored on the following factual findings by the appellate court which was quoted at length in
the ponencia:chanRoblesvirtualLawlibrary
It was Artemio who made arrangement for the delivery of Merceditas (sic) at the Manila Sanitarium and
Hospital. Prior to the delivery, Leoncia underwent prenatal examination accompanied by Artemio (TSN, p.
33, 5/17/74). After delivery, they went home to their residence at EDSA in a car owned and driven by
Artemio himself (id. p. 36).
Merceditas (sic) bore the surname of “Ilano” since birth without any objection on the part of Artemio, the
fact that since Merceditas (sic) had her discernment she had always known and called Artemio as her
“Daddy” (TSN, pp. 28-29, 10/18/74); the fact that each time Artemio was at home, he would play with
Merceditas (sic), take her for a ride or restaurants to eat, and sometimes sleeping with Merceditas (sic) (id.
p. 34) and does all what a father should do for his child — bringing home goodies, candies, toys and
whatever he can bring her which a child enjoys which Artemio gives to Merceditas (sic) (TSN, pp. 38-39,
5/17/74) are positive evidence that Merceditas (sic) is the child of Artemio and recognized by Artemio as
such. Special attention is called to Exh. “E-7” where Artemio was telling Leoncia the need for a “frog test”
to know the status of Leoncia.
Plaintiff pointed out that the support by Artemio for Leoncia and Merceditas (sic) was sometimes in the
128
form of cash personally delivered to her by Artemio, thru Melencio, thru Elynia (Exhs. “E-2” and “E-3”, and
“D-6”), or thru Merceditas (sic) herself (TSN, p. 40, 5/17/74) and sometimes in the form of a check as the
Manila Banking Corporation Check No. 81532 (Exh. “G”) and the signature appearing therein which was
identified by Leoncia as that of Artemio because Artemio often gives her checks and Artemio would write
the check at home and saw Artemio sign the check (TSN, p. 49, 7/18/73). Both Artemio and Nilda admitted
that the check and signature were those of Artemio (TSN, p. 53, 10/17/77; TSN, p. 19, 10/9/78).
During the time that Artemio and Leoncia were living as husband and wife, Artemio has shown concern as
the father of Merceditas (sic). When Merceditas (sic) was in Grade 1 at the St. Joseph Parochial School,
Artemio signed the Report Card of Merceditas (sic) (Exh. “H”) for the fourth and fifth grading period(s)
(Exh. “H-1” and “H-2”) as the parent of Merceditas (sic). Those signatures of Artemio [were] both
identified by Leoncia and Merceditas (sic) because Artemio signed Exh. “H-1” and “H-2” at their residence
in the presence of Leoncia, Merceditas (sic) and of Elynia (TSN, p. 57, 7/18/73; TSN, p. 28, 10/1/73). x x x.
xxx xxx xxx
When Artemio run as a candidate in the Provincial Board of Cavite[,] Artemio gave Leoncia his picture with
the following dedication: “To Nene, with best regards, Temiong”. (Exh. “I”). (pp. 19-20, Appellant’s Brief)
The mere denial by defendant of his signature is not sufficient to offset the totality of the evidence
indubitably showing that the signature thereon belongs to him. The entry in the Certificate of Live Birth that
Leoncia and Artemio was falsely stated therein as married does not mean that Leoncia is not appellee’s
daughter. This particular entry was caused to be made by Artemio himself in order to avoid
embarrassment.39
In sum, we hold that the testimonies of respondent and Murillo, by themselves are not competent proof of
paternity and the totality of respondent’s evidence failed to establish Christian Paulo’s filiation to petitioner.
Time and again, this Court has ruled that a high standard of proof is required to establish paternity and
filiation. An order for recognition and support may create an unwholesome situation or may be an irritant to
the family or the lives of the parties so that it must be issued only if paternity or filiation is established by
clear and convincing evidence.40
Finally, we note the Manifestation and Motion41 filed by petitioner’s counsel informing this Court that
petitioner had died on May 6, 2010.
The action for support having been filed in the trial court when petitioner was still alive, it is not barred
under Article 175 (2)42 of the Family Code. We have also held that the death of the putative father is not a
bar to the action commenced during his lifetime by one claiming to be his illegitimate child. 43 The rule on
substitution of parties provided in Section 16, Rule 3 of the 1997 Rules of Civil Procedure, thus applies.
SEC. 16. Death of party; duty of counsel. – Whenever a party to a pending action dies, and the claim is not
thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after such
death of the fact thereof, and to give the name and address of his legal representative or representatives.
Failure of counsel to comply with his duty shall be a ground for disciplinary action.
The action must be brought within the same period specified in Article 173, except when the action is based
on the second paragraph of Article 172, in which case the action may be brought during the lifetime of the
alleged parent.
The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor
heirs.

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

If no legal representative is named by the counsel for the deceased party, or if the one so named shall fail to
appear within the specified period, the court may order the opposing party, within a specified time to
procure the appointment of an executor or administrator for the estate of the deceased and the latter shall
immediately appear for and on behalf of the deceased. The court charges in procuring such appointment, if
defrayed by the opposing party, may be recovered as costs.

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated July 18, 2006 and
Resolution dated October 19, 2007 of the Court of Appeals in CA-GR. CV No. 64379 are
hereby REVERSED and SET ASIDE. Civil Case No. 2124-AF of the Regional Trial Court of Cabanatuan
City, Branch 26 is DISMISSED.

No pronouncement as to costs. chanRoblesvirtualLawlibrary

SO ORDERED.

129
 THIRD DIVISION
G.R. No. 193707 December 10, 2014
NORMA A. DEL SOCORRO, for and in behalf of her minor child RODERIGO NORJO VAN
WILSEM, Petitioner,
vs.
ERNST JOHAN BRINKMAN VAN WILSEM, Respondent.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse
and set aside the Orders1 dated February 19, 2010 and September 1, 2010, respectively, of the Regional Trial
Court of Cebu City (RTC-Cebu), which dismissed the criminal case entitled People of the Philippines v.
Ernst Johan Brinkman Van Wilsem, docketed as Criminal Case No. CBU-85503, for violation of Republic
Act (R.A.) No. 9262, otherwise known as the Anti-Violence Against Women and Their Children Act of
2004.
The following facts are culled from the records:
Petitioner Norma A. Del Socorro and respondent Ernst Johan Brinkman Van Wilsem contracted marriage in
Holland on September 25, 1990.2 On January 19, 1994, they were blessed with a son named Roderigo Norjo
Van Wilsem, who at the time of the filing of the instant petition was sixteen (16) years of age. 3
Unfortunately, their marriage bond ended on July 19, 1995 by virtue of a Divorce Decree issued by the
appropriate Court of Holland.4 At that time, their son was only eighteen (18) months old. 5 Thereafter,
petitioner and her son came home to the Philippines.6
According to petitioner, respondent made a promise to provide monthly support to their son in the amount of
Two Hundred Fifty (250) Guildene (which is equivalent to Php17,500.00 more or less). 7 However, since the
arrival of petitioner and her son in the Philippines, respondent never gave support to the son, Roderigo. 8
Not long thereafter, respondent cameto the Philippines and remarried in Pinamungahan, Cebu, and since
then, have been residing thereat.9 Respondent and his new wife established a business known as Paree
Catering, located at Barangay Tajao, Municipality of Pinamungahan, Cebu City. 10 To date, all the parties,
including their son, Roderigo, are presently living in Cebu City.11
On August 28, 2009, petitioner, through her counsel, sent a letter demanding for support from respondent.
However, respondent refused to receive the letter.12
Because of the foregoing circumstances, petitioner filed a complaint affidavit with the Provincial Prosecutor
of Cebu City against respondent for violation of Section 5, paragraph E(2) of R.A. No. 9262 for the latter’s
unjust refusal to support his minor child with petitioner. 13 Respondent submitted his counter-affidavit
thereto, to which petitioner also submitted her reply-affidavit.14 Thereafter, the Provincial Prosecutor of
130
Cebu City issued a Resolution recommending the filing of an information for the crime charged against
herein respondent.
The information, which was filed with the RTC-Cebu and raffled to Branch 20 thereof, states that:
That sometime in the year 1995 and up to the present, more or less, in the Municipality of Minglanilla,
Province of Cebu, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, did then and there wilfully, unlawfully and deliberately deprive, refuse and still continue to deprive
his son RODERIGO NORJO VAN WILSEM, a fourteen (14) year old minor, of financial support legally
due him, resulting in economic abuse to the victim. CONTRARY TO LAW. 15
Upon motion and after notice and hearing, the RTC-Cebu issued a Hold Departure Order against
respondent.16Consequently, respondent was arrested and, subsequently, posted bail.17 Petitioner also filed a
Motion/Application of Permanent Protection Order to which respondent filed his Opposition. 18 Pending the
resolution thereof, respondent was arraigned.19 Subsequently, without the RTC-Cebu having resolved the
application of the protection order, respondent filed a Motion to Dismiss on the ground of: (1) lack of
jurisdiction over the offense charged; and (2) prescription of the crime charged. 20
On February 19, 2010, the RTC-Cebu issued the herein assailed Order,21 dismissing the instant criminal case
against respondent on the ground that the facts charged in the information do not constitute an offense with
respect to the respondent who is an alien, the dispositive part of which states:
WHEREFORE, the Court finds that the facts charged in the information do not constitute an offense with
respect to the accused, he being an alien, and accordingly, orders this case DISMISSED.
The bail bond posted by accused Ernst Johan Brinkman Van Wilsem for his provisional liberty is hereby
cancelled (sic) and ordered released.
SO ORDERED.
Cebu City, Philippines, February 19, 2010. 22
Thereafter, petitioner filed her Motion for Reconsideration thereto reiterating respondent’s obligation to
support their child under Article 19523 of the Family Code, thus, failure to do so makes him liable under
R.A. No. 9262 which "equally applies to all persons in the Philippines who are obliged to support their
minor children regardless of the obligor’s nationality."24
On September 1, 2010, the lower court issued an Order25 denying petitioner’s Motion for Reconsideration
and reiterating its previous ruling. Thus:
x x x The arguments therein presented are basically a rehash of those advanced earlier in the memorandum
of the prosecution. Thus, the court hereby reiterates its ruling that since the accused is a foreign national he
is not subject to our national law (The Family Code) in regard to a parent’s duty and obligation to
givesupport to his child. Consequently, he cannot be charged of violating R.A. 9262 for his alleged failure to
support his child. Unless it is conclusively established that R.A. 9262 applies to a foreigner who fails to give
support tohis child, notwithstanding that he is not bound by our domestic law which mandates a parent to
give such support, it is the considered opinion of the court that no prima faciecase exists against the accused
herein, hence, the case should be dismissed.
WHEREFORE, the motion for reconsideration is hereby DENIED for lack of merit.
SO ORDERED.
26
Cebu City, Philippines, September 1, 2010.
Hence, the present Petition for Review on Certiorari raising the following issues:
1. Whether or not a foreign national has an obligation to support his minor child under Philippine
law; and
2. Whether or not a foreign national can be held criminally liable under R.A. No. 9262 for his
unjustified failure to support his minor child.27
At the outset, let it be emphasized that We are taking cognizance of the instant petition despite the fact that
the same was directly lodged with the Supreme Court, consistent with the ruling in Republic v. Sunvar
Realty Development Corporation,28 which lays down the instances when a ruling of the trial court may be
brought on appeal directly to the Supreme Court without violating the doctrine of hierarchy of courts, to wit:
x x x Nevertheless, the Rules do not prohibit any of the parties from filing a Rule 45 Petition with this Court,
in case only questions of law are raised or involved. This latter situation was one that petitioners found
themselves in when they filed the instant Petition to raise only questions of law. In Republic v. Malabanan,
the Court clarified the three modes of appeal from decisions of the RTC, to wit: (1) by ordinary appeal or
appeal by writ of error under Rule 41, whereby judgment was rendered in a civil or criminal action by the
RTC in the exercise of its original jurisdiction; (2) by a petition for review under Rule 42, whereby
judgment was rendered by the RTC in the exercise of its appellate jurisdiction; and (3) by a petition for
review on certiorari before the Supreme Court under Rule 45. "The first mode of appeal is taken to the
[Court of Appeals] on questions of fact or mixed questions of fact and law. The second mode of appeal is
brought to the CA on questions of fact, of law, or mixed questions of fact and law. The third mode of
appealis elevated to the Supreme Court only on questions of law." (Emphasis supplied)
There is a question of law when the issue does not call for an examination of the probative value of the
evidence presented or of the truth or falsehood of the facts being admitted, and the doubt concerns the
correct application of law and jurisprudence on the matter. The resolution of the issue must rest solely on
what the law provides on the given set of circumstances.29
Indeed, the issues submitted to us for resolution involve questions of law – the response thereto concerns the
correct application of law and jurisprudence on a given set of facts, i.e.,whether or not a foreign national has
an obligation to support his minor child under Philippine law; and whether or not he can be held criminally
liable under R.A. No. 9262 for his unjustified failure to do so.
It cannot be negated, moreover, that the instant petition highlights a novel question of law concerning the
liability of a foreign national who allegedly commits acts and omissions punishable under special criminal
131
laws, specifically in relation to family rights and duties. The inimitability of the factual milieu of the present
case, therefore, deserves a definitive ruling by this Court, which will eventually serve as a guidepost for
future cases. Furthermore, dismissing the instant petition and remanding the same to the CA would only
waste the time, effort and resources of the courts. Thus, in the present case, considerations of efficiency and
economy in the administration of justice should prevail over the observance of the hierarchy of courts.
Now, on the matter of the substantive issues, We find the petition meritorious. Nonetheless, we do not fully
agree with petitioner’s contentions.
To determine whether or not a person is criminally liable under R.A. No. 9262, it is imperative that the legal
obligation to support exists.
Petitioner invokes Article 19530 of the Family Code, which provides the parent’s obligation to support his
child. Petitioner contends that notwithstanding the existence of a divorce decree issued in relation to Article
26 of the Family Code,31 respondent is not excused from complying with his obligation to support his minor
child with petitioner.
On the other hand, respondent contends that there is no sufficient and clear basis presented by petitioner that
she, as well as her minor son, are entitled to financial support.32 Respondent also added that by reason of the
Divorce Decree, he is not obligated topetitioner for any financial support.33
On this point, we agree with respondent that petitioner cannot rely on Article 195 34 of the New Civil Code in
demanding support from respondent, who is a foreign citizen, since Article 15 35 of the New Civil Code
stresses the principle of nationality. In other words, insofar as Philippine laws are concerned, specifically the
provisions of the Family Code on support, the same only applies to Filipino citizens. By analogy, the same
principle applies to foreigners such that they are governed by their national law with respect to family rights
and duties.36
The obligation to give support to a child is a matter that falls under family rights and duties. Since the
respondent is a citizen of Holland or the Netherlands, we agree with the RTC-Cebu that he is subject to the
laws of his country, not to Philippinelaw, as to whether he is obliged to give support to his child, as well as
the consequences of his failure to do so.37
In the case of Vivo v. Cloribel,38 the Court held that –
Furthermore, being still aliens, they are not in position to invoke the provisions of the Civil Code of the
Philippines, for that Code cleaves to the principle that family rights and duties are governed by their
personal law, i.e.,the laws of the nation to which they belong even when staying in a foreign country (cf.
Civil Code, Article 15).39
It cannot be gainsaid, therefore, that the respondent is not obliged to support petitioner’s son under
Article195 of the Family Code as a consequence of the Divorce Covenant obtained in Holland. This does
not, however, mean that respondent is not obliged to support petitioner’s son altogether.
In international law, the party who wants to have a foreign law applied to a dispute or case has the burden of
proving the foreign law.40 In the present case, respondent hastily concludes that being a national of the
Netherlands, he is governed by such laws on the matter of provision of and capacity to support. 41 While
respondent pleaded the laws of the Netherlands in advancing his position that he is not obliged to support his
son, he never proved the same.
It is incumbent upon respondent to plead and prove that the national law of the Netherlands does not impose
upon the parents the obligation to support their child (either before, during or after the issuance of a divorce
decree), because Llorente v. Court of Appeals,42 has already enunciated that:
True, foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to
takejudicial notice of them. Like any other fact, they must be alleged and proved. 43
In view of respondent’s failure to prove the national law of the Netherlands in his favor, the doctrine of
processual presumption shall govern. Under this doctrine, if the foreign law involved is not properly pleaded
and proved, our courts will presume that the foreign law is the same as our local or domestic or internal
law.44 Thus, since the law of the Netherlands as regards the obligation to support has not been properly
pleaded and proved in the instant case, it is presumed to be the same with Philippine law, which enforces the
obligation of parents to support their children and penalizing the non-compliance therewith.
Moreover, while in Pilapil v. Ibay-Somera,45 the Court held that a divorce obtained in a foreign land as well
as its legal effects may be recognized in the Philippines in view of the nationality principle on the matter of
status of persons, the Divorce Covenant presented by respondent does not completely show that he is
notliable to give support to his son after the divorce decree was issued. Emphasis is placed on petitioner’s
allegation that under the second page of the aforesaid covenant, respondent’s obligation to support his child
is specifically stated,46 which was not disputed by respondent.
We likewise agree with petitioner that notwithstanding that the national law of respondent states that parents
have no obligation to support their children or that such obligation is not punishable by law, said law would
still not find applicability,in light of the ruling in Bank of America, NT and SA v. American Realty
Corporation,47 to wit:
In the instant case, assuming arguendo that the English Law on the matter were properly pleaded and proved
in accordance with Section 24, Rule 132 of the Rules of Court and the jurisprudence laid down in Yao Kee,
et al. vs. Sy-Gonzales, said foreign law would still not find applicability.
Thus, when the foreign law, judgment or contract is contrary to a sound and established public policy of the
forum, the said foreign law, judgment or order shall not be applied.
Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their
object public order, public policy and good customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a foreign country.
The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction
proscribing the splitting up of a single cause of action.
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent
132
—
If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment
upon the merits in any one is available as a ground for the dismissal of the others. Moreover, foreign law
should not be applied when its application would work undeniable injustice to the citizens or residents of the
forum. To give justice is the most important function of law; hence, a law, or judgment or contract that is
obviously unjust negates the fundamental principles of Conflict of Laws. 48
Applying the foregoing, even if the laws of the Netherlands neither enforce a parent’s obligation to support
his child nor penalize the noncompliance therewith, such obligation is still duly enforceable in the
Philippines because it would be of great injustice to the child to be denied of financial support when the
latter is entitled thereto.
We emphasize, however, that as to petitioner herself, respondent is no longer liable to support his former
wife, in consonance with the ruling in San Luis v. San Luis, 49 to wit:
As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longerbe considered
marriedto the alien spouse. Further, she should not be required to perform her marital duties and obligations.
It held:
To maintain, as private respondent does, that, under our laws, petitioner has to be considered still married to
private respondent and still subject to a wife's obligations under Article 109, et. seq. of the Civil Code
cannot be just. Petitioner should not be obliged to live together with, observe respect and fidelity, and render
support to private respondent. The latter should not continue to be one of her heirs with possible rights to
conjugal property. She should not be discriminated against in her own country if the ends of justice are to be
served. (Emphasis added)50
Based on the foregoing legal precepts, we find that respondent may be made liable under Section 5(e) and (i)
of R.A. No. 9262 for unjustly refusing or failing to give support topetitioner’s son, to wit:
SECTION 5. Acts of Violence Against Women and Their Children.- The crime of violence against women
and their children is committed through any of the following acts:
xxxx
(e) Attempting to compel or compelling the woman or her child to engage in conduct which the woman or
her child has the right to desist from or desist from conduct which the woman or her child has the right to
engage in, or attempting to restrict or restricting the woman's or her child's freedom of movement or conduct
by force or threat of force, physical or other harm or threat of physical or other harm, or intimidation
directed against the woman or child. This shall include, butnot limited to, the following acts committed with
the purpose or effect of controlling or restricting the woman's or her child's movement or conduct:
xxxx
(2) Depriving or threatening to deprive the woman or her children of financial support legally due her or her
family, or deliberately providing the woman's children insufficient financial support; x x x x
(i) Causing mental or emotional anguish, public ridicule or humiliation to the woman or her child, including,
but not limited to, repeated verbal and emotional abuse, and denial of financial support or custody of minor
childrenof access to the woman's child/children.51

Under the aforesaid special law, the deprivation or denial of financial support to the child is considered
anact of violence against women and children.

In addition, considering that respondent is currently living in the Philippines, we find strength in petitioner’s
claim that the Territoriality Principle in criminal law, in relation to Article 14 of the New Civil Code, applies
to the instant case, which provides that: "[p]enal laws and those of public security and safety shall be
obligatory upon all who live and sojourn in Philippine territory, subject to the principle of public
international law and to treaty stipulations." On this score, it is indisputable that the alleged continuing acts
of respondent in refusing to support his child with petitioner is committed here in the Philippines as all of
the parties herein are residents of the Province of Cebu City. As such, our courts have territorial jurisdiction
over the offense charged against respondent. It is likewise irrefutable that jurisdiction over the respondent
was acquired upon his arrest.

Finally, we do not agree with respondent’s argument that granting, but not admitting, that there is a legal
basis for charging violation of R.A. No. 9262 in the instant case, the criminal liability has been extinguished
on the ground of prescription of crime52 under Section 24 of R.A. No. 9262, which provides that:

SECTION 24. Prescriptive Period. – Acts falling under Sections 5(a) to 5(f) shall prescribe in twenty (20)
years. Acts falling under Sections 5(g) to 5(I) shall prescribe in ten (10) years.

The act of denying support to a child under Section 5(e)(2) and (i) of R.A. No. 9262 is a continuing
offense,53 which started in 1995 but is still ongoing at present. Accordingly, the crime charged in the instant
case has clearly not prescribed.

Given, however, that the issue on whether respondent has provided support to petitioner’s child calls for an
examination of the probative value of the evidence presented, and the truth and falsehood of facts being
admitted, we hereby remand the determination of this issue to the RTC-Cebu which has jurisdiction over the
case.

WHEREFORE, the petition is GRANTED. The Orders dated February 19, 2010 and September 1, 2010,
respectively, of the Regional Trial Court of the City of Cebu are hereby REVERSED and SET ASIDE. The
case is REMANDED to the same court to conduct further proceedings based on the merits of the case.

SO ORDERED.

133
 EN BANC
G.R. No. L-23851 March 26, 1976
WACK WACK GOLF & COUNTRY CLUB, INC., plaintiff-appellant,
vs.
LEE E. WON alias RAMON LEE and BIENVENIDO A. TAN, defendants-appellees.
Leonardo Abola for appellant.
Alfonso V. Agcaoli & Ramon A. Barcelona for appellee Lee E. Won.
Bienvenido A. Tan in his own behalf.
CASTRO, C.J.:
This is an appeal from the order of the Court of First Instance of Rizal, in civil case 7656, dismissing the
plaintiff-appellant's complaint of interpleader upon the grounds of failure to state a cause of action and res
judicata.
In its amended and supplemental complaint of October 23, 1963, the Wack Wack Golf & Country Club,
Inc., a non-stock, civic and athletic corporation duly organized under the laws of the Philippines, with
principal office in Mandaluyong, Rizal (hereinafter referred to as the Corporation), alleged, for its first cause
of action, that the defendant Lee E. Won claims ownership of its membership fee certificate 201, by virtue
of the decision rendered in civil case 26044 of the CFI of Manila, entitled "Lee E. Won alias Ramon Lee vs.
Wack Wack Golf & Country Club, Inc." and also by virtue of membership fee certificate 201-serial no. 1478
issued on October 17, 1963 by Ponciano B. Jacinto, deputy clerk of court of the said CFI of Manila, for and
in behalf of the president and the secretary of the Corporation and of the People's Bank & Trust Company as
transfer agent of the said Corporation, pursuant to the order of September 23, 1963 in the said case; that the
defendant Bienvenido A. Tan, on the other hand, claims to be lawful owner of its aforesaid membership fee
certificate 201 by virtue of membership fee certificate 201-serial no. 1199 issued to him on July 24, 1950
pursuant to an assignment made in his favor by "Swan, Culbertson and Fritz," the original owner and holder
of membership fee certificate 201; that under its articles of incorporation and by-laws the Corporation is
authorized to issue a maximum of 400 membership fee certificates to persons duly elected or admitted to
proprietary membership, all of which have been issued as early as December 1939; that it claims no interest
whatsoever in the said membership fee certificate 201; that it has no means of determining who of the two
defendants is the lawful owner thereof; that it is without power to issue two separate certificates for the same
membership fee certificate 201, or to issue another membership fee certificate to the defendant Lee, without
violating its articles of incorporation and by-laws; and that the membership fee certificate 201-serial no.
1199 held by the defendant Tan and the membership fee certificate 201-serial No. 1478 issued to the
defendant Lee proceed from the same membership fee certificate 201, originally issued in the name of
"Swan, Culbertson and Fritz".
For its second cause of action. it alleged that the membership fee certificate 201-serial no. 1478 issued by
the deputy clerk of court of court of the CFI of Manila in behalf of the Corporation is null and void because
issued in violation of its by-laws, which require the surrender and cancellation of the outstanding
membership fee certificate 201 before issuance may be made to the transferee of a new certificate duly
signed by its president and secretary, aside from the fact that the decision of the CFI of Manila in civil case
26044 is not binding upon the defendant Tan, holder of membership fee certificate 201-serial no. 1199; that
Tan is made a party because of his refusal to join it in this action or bring a separate action to protect his
rights despite the fact that he has a legal and beneficial interest in the subject matter of this litigation; and
that he is made a part so that complete relief may be accorded herein.
The Corporation prayed that (a) an order be issued requiring Lee and Tan to interplead and litigate their
conflicting claims; and (b) judgment. be rendered, after hearing, declaring who of the two is the lawful
owner of membership fee certificate 201, and ordering the surrender and cancellation of membership fee
certificate 201-serial no. 1478 issued in the name of Lee.
134
In separate motions the defendants moved to dismiss the complaint upon the grounds of res judicata, failure
of the complaint to state a cause of action, and bar by prescription. 1 These motions were duly opposed by
the Corporation. Finding the grounds of bar by prior judgment and failure to state a cause of action well
taken, the trial court dismissed the complaint, with costs against the Corporation.
In this appeal, the Corporation contends that the court a quo erred (1) in finding that the allegations in its
amended and supplemental complaint do not constitute a valid ground for an action of interpleader, and in
holding that "the principal motive for the present action is to reopen the Manila Case and collaterally attack
the decision of the said Court"; (2) in finding that the decision in civil case 26044 of the CFI of Manila
constitutes res judicata and bars its present action; and (3) in dismissing its action instead of compelling the
appellees to interplead and litigate between themselves their respective claims.
The Corporations position may be stated elsewise as follows: The trial court erred in dismissing the
complaint, instead of compelling the appellees to interplead because there actually are conflicting claims
between the latter with respect to the ownership of membership fee certificate 201, and, as there is not
Identity of parties, of subject-matter, and of cause of action, between civil case 26044 of the CFI of Manila
and the present action, the complaint should not have been dismissed upon the ground of res judicata.
On the other hand, the appellees argue that the trial court properly dismissed the complaint, because, having
the effect of reopening civil case 26044, the present action is barred by res judicata.
Although res judicata or bar by a prior judgment was the principal ground availed of by the appellees in
moving for the dismissal of the complaint and upon which the trial court actually dismissed the complaint,
the determinative issue, as can be gleaned from the pleadings of the parties, relates to the propriety and
timeliness of the remedy of interpleader.
The action of interpleader, under section 120 of the Code of Civil Procedure, 2 is a remedy whereby a person
who has personal property in his possession, or an obligation to render wholly or partially, without claiming
any right to either, comes to court and asks that the persons who claim the said personal property or who
consider themselves entitled to demand compliance with the obligation, be required to litigate among
themselves in order to determine finally who is entitled to tone or the one thing. The remedy is afforded to
protect a person not against double liability but against double vexation in respect of one liability. 3 The
procedure under the Rules of Court 4 is the same as that under the Code of Civil Procedure, 5 except that
under the former the remedy of interpleader is available regardless of the nature of the subject-matter of the
controversy, whereas under the latter an interpleader suit is proper only if the subject-matter of the
controversy is personal property or relates to the performance of an obligation.
There is no question that the subject matter of the present controversy, i.e., the membership fee certificate
201, is proper for an interpleader suit. What is here disputed is the propriety and timeliness of the remedy in
the light of the facts and circumstances obtaining.
A stakeholder 6 should use reasonable diligence to hale the contending claimants to court. 7 He need not
await actual institution of independent suits against him before filing a bill of interpleader. 8 He should file
an action of interpleader within a reasonable time after a dispute has arisen without waiting to be sued by
either of the contending claimants. 9 Otherwise, he may be barred by laches 10 or undue delay. 11 But where
he acts with reasonable diligence in view of the environmental circumstances, the remedy is not barred. 12
Has the Corporation in this case acted with diligence, in view of all the circumstances, such that it may
properly invoke the remedy of interpleader? We do not think so. It was aware of the conflicting claims of
the appellees with respect to the membership fee certificate 201 long before it filed the present interpleader
suit. It had been recognizing Tan as the lawful owner thereof. It was sued by Lee who also claimed the same
membership fee certificate. Yet it did not interplead Tan. It preferred to proceed with the litigation (civil
case 26044) and to defend itself therein. As a matter of fact, final judgment was rendered against it and said
judgment has already been executed. It is not therefore too late for it to invoke the remedy of interpleader.
It has been held that a stakeholder's action of interpleader is too late when filed after judgment has been
rendered against him in favor of one of the contending claimants, 13 especially where he had notice of the
conflicting claims prior to the rendition of the judgment and neglected the opportunity to implead the
adverse claimants in the suit where judgment was entered. This must be so, because once judgment is
obtained against him by one claimant he becomes liable to the latter. 14 In once case, 15 it was declared:
The record here discloses that long before the rendition of the judgment in favor of
relators against the Hanover Fire Insurance Company the latter had notice of the adverse
claim of South to the proceeds of the policy. No reason is shown why the Insurance
Company did not implead South in the former suit and have the conflicting claims there
determined. The Insurance Company elected not to do so and that suit proceeded to a
final judgment in favor of relators. The Company thereby became independently liable to
relators. It was then too late for such company to invoke the remedy of interpleader
The Corporation has not shown any justifiable reason why it did not file an application for interpleader in
civil case 26044 to compel the appellees herein to litigate between themselves their conflicting claims of
ownership. It was only after adverse final judgment was rendered against it that the remedy of interpleader
was invoked by it. By then it was too late, because to he entitled to this remedy the applicant must be able to
show that lie has not been made independently liable to any of the claimants. And since the Corporation is
already liable to Lee under a final judgment, the present interpleader suit is clearly improper and unavailing.
It is the general rule that before a person will be deemed to be in a position to ask for an
order of intrepleader, he must be prepared to show, among other prerequisites, that he has
not become independently liable to any of the claimants. 25 Tex. Jur. p. 52, Sec. 3; 30
Am. Jur. p. 218, Section 8.
It is also the general rule that a bill of interpleader comes too late when it is filed after
judgment has been rendered in favor of one of the claimants of the fund, this being
especially true when the holder of the funds had notice of the conflicting claims prior to
the rendition of the judgment and had an opportunity to implead the adverse claimants in
the suit in which the judgment was rendered. United Procedures Pipe Line Co. v. Britton,
Tex. Civ. App. 264 S.W. 176; Nash v. McCullum, Tex. Civ. 74 S.W. 2d 1046; 30 Am.
Jur. p. 223, Sec. 11; 25 Tex. Jur. p. 56, Sec. 5; 108 A.L.R., note 5, p. 275. 16
Indeed, if a stakeholder defends a suit filed by one of the adverse claimants and allows said suit to proceed
to final judgment against him, he cannot later on have that part of the litigation repeated in an interpleader
suit. In the case at hand, the Corporation allowed civil case 26044 to proceed to final judgment. And it
offered no satisfactory explanation for its failure to implead Tan in the same litigation. In this factual
situation, it is clear that this interpleader suit cannot prosper because it was filed much too late.
If a stakeholder defends a suit by one claimant and allows it to proceed so far as a
judgment against him without filing a bill of interpleader, it then becomes too late for him
to do so. Union Bank v. Kerr, 2 Md. Ch. 460; Home Life Ins. Co. v. Gaulk, 86 Md. 385,
390, 38 A. 901; Gonia v. O'Brien, 223 Mass. 177, 111 N.E. 787. It is one o the main
offices of a bill of interpleader to restrain a separate proceeding at law by claimant so as
to avoid the resulting partial judgment; and if the stakeholder acquiesces in one claimant's
trying out his claim and establishing it at law, he cannot then have that part of the
litigation repeated in an interpleader suit. 4 Pomeroy's Eq. Juris. No. 162; Mitfor's Eq.
Pleading (Tyler's Ed.) 147 and 236; Langdell's Summary of Eq. Pleading, No. 162' De
Zouche v. Garrizon, 140 Pa. 430, 21 A/450. 17
It is the general rule that a bill of interpleader comes too late when application therefore
is delayed until after judgment has been rendered in favor of one of the claimants of the
fund, and that this is especially true where the holder of the fund had notice of the
conflicting claims prior to the rendition of such judgment and an opportunity to implead
the adverse claimants in the suit in which such judgment was rendered. (See notes and
cases cited 36 Am. Dec. 703, Am. St. Rep. 598, also 5 Pomeroy's Eq. Juris. Sec. 41.)
The evidence in the opinion of the majority shows beyond dispute that the appellant
permitted the Parker county suit to proceed to judgment in favor of Britton with full
135
notice of the adverse claims of the defendants in the present suit other than the assignees
of the judgment (the bank and Mrs. Pabb) and no excuse is shown why he did not
implead them in the suit. 18
To now permit the Corporation to bring Lee to court after the latter's successful establishment of his rights in
civil case 26044 to the membership fee certificate 201, is to increase instead of to diminish the number of
suits, which is one of the purposes of an action of interpleader, with the possibility that the latter would lose
the benefits of the favorable judgment. This cannot be done because having elected to take its chances of
success in said civil case 26044, with full knowledge of all the fact, the Corporation must submit to the
consequences of defeat.
The act providing for the proceeding has nothing to say touching the right of one, after
contesting a claim of one of the claimants to final judgment unsuccessfully, to involve the
successful litigant in litigation anew by bringing an interpleader action. The question
seems to be one of first impression here, but, in other jurisdictions, from which the
substance of the act was apparently taken, the rule prevails that the action cannot be
resorted to after an unsuccessful trial against one of the claimants.
It is well settled, both by reasons and authority, that one who asks the interposition of a
court of equity to compel others, claiming property in his hands, to interplead, must do so
before putting them to the test of trials at law. Yarborough v. Thompson, 3 Smedes & M.
291 (41 Am. Dec. 626); Gornish v. Tanner, 1 You. & Jer. 333; Haseltine v. Brickery, 16
Grat. (Va.) 116. The remedy by interpleader is afforded to protect the party from the
annoyance and hazard of two or more actions touching the same property or demand; but
one who, with knowledge of all the facts, neglects to avail himself of the relief, or elects
to take the chances for success in the actions at law, ought to submit to the consequences
of defeat. To permit an unsuccessful defendant to compel the successful plaintiffs to
interplead, is to increase instead of to diminish the number of suits; to put upon the
shoulders of others the burden which he asks may be taken from his own. ....'
It is urged, however, that the American Surety Company of New York was not in
position to file an interpleader until it had tested the claim of relatrix to final judgment,
and that, failing to meet with success, it promptly filed the interpleader. The reason why,
it urges, it was not in such position until then is that had it succeeded before this court in
sustaining its construction of the bond and the law governing the bond, it would not have
been called upon to file an interpleader, since there would have been sufficient funds in
its hands to have satisfied all lawful claimants. It may be observed, however, that the
surety company was acquainted with all of the facts, and hence that it simply took its
chances of meeting with success by its own construction of the bond and the law. Having
failed to sustain it, it cannot now force relatrix into litigation anew with others, involving
most likely a repetition of what has been decided, or force her to accept a pro rata part of
a fund, which is far from benefits of the judgment. 19
Besides, a successful litigant cannot later be impleaded by his defeated adversary in an interpleader suit and
compelled to prove his claim anew against other adverse claimants, as that would in effect be a collateral
attack upon the judgment.
The jurisprudence of this state and the common law states is well-settled that a claimant
who has been put to test of a trial by a surety, and has establish his claim, may not be
impleaded later by the surety in an interpleader suit, and compelled to prove his claim
again with other adverse claimants. American Surety Company of New York v. Brim, 175
La. 959, 144 So. 727; American Surety Company of New York v. Brim (In Re Lyong
Lumber Company), 176 La. 867, 147 So. 18; Dugas v. N.Y. Casualty Co., 181 La. 322,
159 So. 572; 15 Ruling Case Law, 228; 33 Corpus Juris, 477; 4 Pomeroy's Jurisprudence,
1023; Royal Neighbors of America v. Lowary (D.C.) 46 F2d 565; Brackett v. Graves, 30
 App. Div. 162, 51 N.Y.S. 895; De Zouche v. Garrison, 140 Pa. 430, 21 A. 450,
451; Manufacturer's Finance Co. v. W.I. Jones Co. 141 Ga., 519, 81 S.E. 1033; Hancock
Mutual Life Ins. Co. v. Lawder, 22 R.I. 416, 84 A. 383.
There can be no doubt that relator's claim has been finally and definitely established,
because that matter was passed upon by three courts in definitive judgments. The only
remaining item is the value of the use of the land during the time that relator occupied it.
The case was remanded solely and only for the purpose of determining the amount of that
credit. In all other aspects the judgment is final. 20
It is generally held by the cases it is the office of interpleader to protect a party, not
against double liability, but against double vexation on account of one liability. Gonia v.
O'Brien, 223 Mass. 177, 111 N.E. 787. And so it is said that it is too late for the remedy
of interpleader if the party seeking this relef has contested the claim of one of the parties
and suffered judgment to be taken.
In United P.P.I. Co. v. Britton (Tex. Civ. App.) 264 S.W. 576. 578, it was said: 'It is the
general rule that a bill of interpleader comes too late when application therefor is delayed
until after judgment has been rendered in favor of one of the claimants of the fund, and
this is especially true where the holder of the fund had notice of the conflicting claims
prior to the rendition of such judgment and an opportunity to implead the adverse
claimants in the suit in which such judgment was rendered. See notes and cases cited 35
Am. Dec. 703; 91 An. St. Rep. 598; also 5 Pomeroy's Equity Jurisprudence No. 41.'
The principle thus stated has been recognized in many cases in other jurisdictions, among
which may be cited American Surety Co. v. O'Brien, 223 Mass. 177, 111 N.E.
787; Phillips v. Taylor, 148 Md. 157, 129 A. 18; Moore v. Hill, 59 Ga. 760,
761; Yearborough v. Thompson, 3 Smedes & M. (11 Miss.) 291, 41 Am. Dec. 626. See,
also, 33 C.J. p. 447, No. 30; Nash v. McCullum, (Tex. Civ. App.) 74 S.W. 2d 1042, 1047.
It would seem that this rule should logically follow since, after the recovery of judgment,
the interpleading of the judgment creditor is in effect a collateral attack upon the
judgment. 21
In fine, the instant interpleader suit cannot prosper because the Corporation had already been made
independently liable in civil case 26044 and, therefore, its present application for interpleader would in
effect be a collateral attack upon the final judgment in the said civil case; the appellee Lee had already
established his rights to membership fee certificate 201 in the aforesaid civil case and, therefore, this
interpleader suit would compel him to establish his rights anew, and thereby increase instead of diminish
litigations, which is one of the purposes of an interpleader suit, with the possiblity that the benefits of the
final judgment in the said civil case might eventually be taken away from him; and because the Corporation
allowed itself to be sued to final judgment in the said case, its action of interpleader was filed inexcusably
late, for which reason it is barred by laches or unreasonable delay.
ACCORDINGLY, the order of May 28, 1964, dismissing the complaint, is affirmed, at appellant's cost.

136
 SECOND DIVISION
G.R. No. 73794 September 19, 1988
ETERNAL GARDENS MEMORIAL PARKS CORPORATION, petitioner,
vs.
FIRST SPECIAL CASES DIVISION INTERMEDIATE APPELLATE COURT and NORTH PHILIPPINE
UNION MISSION OF THE SEVENTH-DAY ADVENTISTS, respondents.
PARAS, J.:
This is a special civil action for certiorari, prohibition and mandamus seeking to set aside the two resolutions
of public respondent First Special Cases Division of the then Intermediate Appellate Court in AC-G.R. No.
04869 entitled "North Philippine Union Mission of the Seventh Day Adventists versus Hon. Antonia
Corpus-Macandog, Presiding Judge, Branch CXX, Regional Trial Court, Caloocan City and Eternal Gardens
Memorial Park Corporation, (a) dated September 5, 1985 (Rollo, pp. 21-25) reconsidering its Decision 1 of
February 27, 1985 (Rollo, pp. 38-48) and ordering petitioner to deposit whatever amounts due from it under
the Land Development Agreement, and (b) dated February 13, 1986 (Rollo, p. 27) denying for lack of merit
petitioner's motion for reconsideration.
Petitioner Eternal Gardens Memorial Parks Corporation and private respondent North Philippine Union
Mission Corporation of the Seventh Day Adventists (MISSION for short) are corporations duly organized
and existing under and by virtue of the laws of the Republic of the Philippines.
They executed a Land Development Agreement (Rollo, pp. 179-182) on October 6, 1976 whereby the
former undertook to introduce and construct at its own expense and responsibility necessary improvements
on the property owned by private respondent into a memorial park to be subdivided into and sold as
memorial plot lots, at a stipulated area and price per lot. Out of the proceeds from the sale, private
respondent is entitled to receive 40% of the net gross collection from the project to be remitted monthly by
petitioner to private respondent through a designated depositary trustee bank. On the same date private
respondent executed in petitioner's favor a Deed of Absolute Sale with Mortgage (Rollo, pp. 183-186) on the
lots with titles involved in the land development project. The deed was supplemented by a Sale of Real
Property with Mortgage and Special Conditions dated October 28, 1978 (Rollo, pp. 189-194 The amounts
totalling about P984,110.82 paid by petitioner were to be considered as part of the 40% due private
respondent under the Land Development Agreement. All went well until Maysilo Estate asserted its claim of
ownership over the parcel of land in question. Confronted with such conflicting claims, petitioner as plaintiff
filed a complaint for interpleader (Rollo, pp. 169-179) against private respondent MISSION and Maysilo
Estate, docketed as Special Court Case No. C-9556 of the then CFI of Rizal, Branch XII, Caloocan, alleging
among others, that in view of the conflicting claims of ownership of the defendants (herein private
respondent and Maysilo Estate) over the properties subject matter of the contracts, over which plaintiff
corporation (herein petitioner) has no claim of ownership except as a purchaser thereof, and to protect the
interests of plaintiff corporation which has no interest in the subject matter of the dispute and is willing to
pay whoever is entitled or declared to be the owners of said properties, the defendants should be required to
interplead and litigate their several claims between themselves (Rollo, p. 177).
An order was issued by the presiding judge 2 requiring defendants to interplead on October 22, 1981.
MISSION filed a motion to dismiss dated November 10, 1981 for lack of cause of action but also presented
an answer dated November 12, 1981. The motion to dismiss was denied in an Order dated January 12, 1982.
The heirs of Maysilo Estate filed their own answer dated November 11, 1981 and an amended answer dated
October 20, 1983 thru the estate's special receiver. The heirs of Pedro Banon filed an "Answer in
Intervention with Special and Affirmative Defenses" dated October 24, 1983, while Lilia B. Sevilla and
husband Jose Seelin filed their "Answer in Cross-claim" dated October 31, 1983 (Rollo, p. 30). The heirs of
Sofia O'Farrel y Patino, et al. filed their Answer in Intervention dated November 10, 1983.
137
However, earlier on November 21, 1982, private respondent presented a motion for the placing on judicial
deposit the amounts due and unpaid from petitioner. Acting on such motion, the trial court 3 denied judicial
deposit in its order dated February 13, 1984, the decretal portion of which reads:
PREMISES CONSIDERED, all or the full amount the plaintiff, Eternal Gardens
Memorial Parks Corporation have already paid the North Philippine Union Mission
Corporation of the Seventh Day Adventist is hereby ordered to deposit the same to this
Court within thirty (30) days from receipt of this order considering that real or true owner
of the subject properties in question, due hearing of this court has yet to be undergone in
order to decide as to who is the true owner which is a prejudicial question. Hence the
motion dated November 21, 1983 of the NPUM for the Eternal Gardens Corporation to
deposit the balance due and unpaid is hereby ordered denied and the opposition thereto
dated December 19, 1983 is hereby ordered granted.
The contract between the Eternal Gardens Corporation and the North Philippine Union
Mission dated October 16, 1976 is ordered and declared ineffective as of today, February
13, 1984 because the subject matter of the sale is not existing between the contracting
parties until after the question of ownership is resolved by this court. The court will order
the revival of the contract if the North Philippine Union Mission will win.
If not, the declared winner among the intervenors will be the party to enter into a contract
of sale with the plaintiff as aforementioned. (Rollo, p. 66).
Another order dated October 26, 1984 was issued amending the February 13, 1984 order and setting aside
the order for private respondent's deposit of the amounts it had previously received from petitioner, thus:
WHEREFORE IN VIEW OF ALL THE FOREGOING CONSIDERATIONS the order
of February 13, 1984, is hereby ordered amended, reconsidered and modified by this
same Court as follows:
(a) The order directing the NORTH PHILIPPINE UNION MISSION CORPORATION
OF SEVENTH-DAY ADVENTISTS to deposit the amounts it received under the
implementation of the LAND DEVELOPMENT AGREEMENT which is not questioned
by the plaintiff, Eternal Gardens, is hereby ordered set aside for the reason that the titles
to ownership, the North Philippine Union Mission Corporation of Seventh Day
Adventists on the lots subject matter of the aforesaid agreement is not established invalid,
and the alleged titles of intervenors are not proven yet by competent evidence;
(b) The motion to require Eternal Gardens to deposit the balance under the Land
Development Agreement is likewise hereby ordered denied considering the fact the
aforesaid plaintiff had not denied its obligations under the aforesaid contract; and
(c) The trial or hearing is hereby ordered as scheduled to proceed on November 29, 1984
and on December 6, 1984 at 8:30 in the morning per order of this Court dated October 4,
1984 in order to determine the alleged claims of ownership by the intervenors and all
claims and allegations of each party to the instant" case will be considered and decided
carefully by this court on just and meritorious grounds. (Rollo, p. 39)
Said Orders were assailed twice in the Intermediate Appellate Court (Court of Appeals) and in the Supreme
Court as follows:
In G.R. No. 73569 it appeared that on January 11, 1985, MISSION filed a motion to dismiss the Interpleader
and the claims of the Maysilo Estate and the Intervenors and to order the Eternal Gardens to comply with its
Land Management with MISSION.
On January 28, 1985, the trial court passed a resolution, the dispositive portion of which reads:
WHEREFORE, premises considered, this Court, after a lengthy, careful judicious study
and perusal of all the stand of each and everyone of all the parties participating in this
case, hereby orders the dismissal of the interpleader, and the interventions filed by the
intervenors, heirs of Pedro Banon, heirs of O'Farrel, heirs of Rivera, heirs of Maria del
 Concepcion Vidal, consolidated with the Maysilo Estate as represented by receiver
Arturo Salientes the heirs of Vicente Singson Encarnacion, and Lilia Sevilla Seeling
This Court likewise orders the plaintiff, Eternal Gardens Memorial Parks Corporation to
comply with the Land Development Agreement dated October 6, 1978, it entered into
with the North Philippine Union Mission Corporation of the Seventh-Day Adventists.
(Rollo. p. 68)
The heirs of the Maysilo Estate moved for reconsideration of the aforementioned order of dismissal, the
hearing of which was requested to be set on February, 28, 1985. However, the trial judge, on February 14,
1985 issued the following orders:
Considering Motions for Reconsideration filed, the Court resolves that the same be
GRANTED and instead of a hearing of the said motions on February 20, 1985, at 8:30
a.m., a hearing on the merits shall be held. (Rollo, p. 68)
In spite of the February 14, 1985 order, MISSION filed on March 6, 1985 a motion for Writ of Execution of
the resolution of January 28, 1985. This was denied on June 25, 1985. The said court further set the case for
pre-trial and trial on July 18, 1985.
It was elevated on certiorari and mandamus to the Intermediate Appellate Court (Court of Appeals),
docketed as AC-G.R. Sp No. 06696 "North Philippine Union Mission of the Seventh Day Adventists, vs.
Hon. Antonia Corpus-Macandog Presiding Judge, Branch CXX, Regional Trial Court, Caloocan City,
Eternal Gardens Memorial Parks Corporation, and Heirs of Vicente Singson Encarnacion It was raffled to
the Second Special Division. MISSION assailed the February 14, 1985 and June 25, 1985 orders as violative
of due process and attended by grave abuse of discretion amounting to lack of jurisdiction. The petition was
however dismissed in the decision of said Appellate Court, promulgated on December 4, 1985, the
dispositive portion of which reads:
WHEREFORE, for want of merit the petition for certiorari and mandamus under
consideration cannot be given due course and is accordingly, DISMISSED, without any
pronouncement, as to costs. The restraining order embodied in Our Resolution of July 31,
1985, is hereby lifted. (Rollo, G.R. No. 73569 p. 232)
The private respondent challenged the above decision in the Supreme Court in G.R. No. 73569. In its
resolution dated June 11, 1986, the Supreme Court denied the petition for review on certiorari for lack of
merit, as follows:
G.R. No. 73569 (North Philippine Union Mission Corporation of the Seventh Day
Adventists vs. Intermediate Appellate Court, et al.) considering the allegations, issues,
and arguments adduced in the petition for review on certiorari, the Court Resolved to
DENY the same for lack of merit. (Ibid p. 263)
Said resolution has become final and executory on July 16, 1986. (Ibid p. 269)
Earlier in 1983, the heirs of the late spouses Vicente Singson Encarnacion and Lucila Conde filed Civil Case
No. C-11836 for quieting of title with Branch CXXII, Regional Trial Court, Caloocan City, where petitioner
and private respondent were named as defendants.
Said case is still pending in the lower Court.
In the case at bar, G.R. No. 73794, MISSION, herein private respondent filed a petition for certiorari with
the then Intermediate Appellate Court docketed as AC-G.R. No. 04869 praying that the aforementioned
Orders of February 13, 1984 and October 26, 1984 of the Regional Trial Court be set aside and that an order
be issued to deposit in court or in a depositor trustee bank of any and all payments, plus interest thereon, due
the private respondent MISSION under the Land Development Agreement, said amounts deposited to be
paid to whomever may be found later to be entitled thereto, with costs. (Rollo, G.R. No. 73794 p. 38)
The Intermediate Appelate Court, acting through its First Special Cases Division 4 dismissed the petition in
its decision on February 27, 1985 (Rollo, pp. 38-48). In its Resolution 5 promulgated on September 5, 1985,
the Court however, reversed its decision, thus:
138
WHEREFORE, the Court reconsiders its decision of February 27, 1986, and sets aside
the questioned portions of the respondent Court's orders of February 13 and October 26,
1984. The private respondent is hereby ordered to deposit whatever amounts are due from
it under the Land Development Agreement of October 6, 1976 with a reputable bank to
be designated by the respondent court to be the depository trustee of the said amounts to
be paid to whoever shall be found entitled thereto. No costs. (Rollo, p. 25)
Eternal Gardens moved for a reconsideration of the above decision but it was denied for lack of merit in a
resolution promulgated on February 13, 1986, which states:
The private respondent Eternal Gardens Memorial Park Corporation's Motion for
Reconsideration of the Court's resolution promulgated September 5, 1985 requiring it "to
deposit whatever amounts are due from it under the Land Development Agreement of
October 6, 1976 ...," which was strongly opposed by the petitioner North Philippine
Union Mission of the Seventh Day Adventists, is hereby denied for lack of merit,
reiterating as it does, the very same issues and arguments that were passed upon and
considered by the Court in the very same resolution sought to be reconsidered. (Rollo, p.
27)
Hence, this petition. On July 8,1987, the Third Division of this Court issued the following resolution:
... the court RESOLVED to give due course to this petition and require the parties to file
memoranda.
In the meantime, to avoid possible wastage of funds, the Court RESOLVED to require
the private respondent 6 to DEPOSIT its accruing installments within ten (10) days from
notice with a reputable commercial bank in a savings deposit account, in the name of the
Supreme Court of the Philippines, with the details to be reported or manifested to this
Court within ten (10) days from the time the deposit/deposits are made, such deposits not
to be withdrawn without authority from this Court. (Rollo, p. 162)
Petitioner's Memorandum With Prayer for the Deferment of Time to Make Deposit (Rollo, p. 218-236) was
filed on July 14, 1987. Its prayer was granted for a period of ten (10) days for the purpose, in the resolution
of July 29, 1987 (Rollo, p. 238). Private respondent filed its Opposition to Deferment of Time to Make
Deposit (Rollo, pp. 239-253) on July 24, 1987 to which petitioner filed its Reply to Opposition on August 4,
1987 (Rollo, pp. 256-267). Both were noted by the Court in its resolution dated September 7, 1987 (Rollo, p.
270). On August 25, 1987, private respondent filed its Rejoinder to Petitioner's Reply to Opposition (Rollo,
pp. 271-292).
Petitioner filed its Supplemental Memorandum with Reply to Opposition (To Deferment of time to Make
Deposit) on August 31, 1987 (Rollo, pp. 294-313) and a Sur-rejoinder on September 1, 1987 (Rollo, pp.
304-315).
The main issues in this case are:
I
Whether or not respondent Court of Appeals abused its discretion amounting to lack of
jurisdiction in reconsidering its resolution of February 27, 1985 and in requiring instead
in the resolution of September 5, 1985, that petitioner Eternal Gardens deposit whatever
amounts are due from it under the Land Development Agreement with a reputable bank
to be designated by the respondent court.
II
Whether or not the dismissal of AC-G.R. SP No. 06696 (North Philippine Union Mission
of the Seventh Day Adventists vs. Hon. Macandog, et al.) by the Second Special Cases
Division of the IAC which was affirmed by the Supreme Court in G.R. No. 73569
constitutes a basis for the dismissal of the case at bar on the ground of res adjudicata.
I
There is no question that courts have inherent power to amend their judgments, to make them conformable matter, and of causes of action Arguson v. Miclat 135 SCRA 678 [1985]; Carandang v. Venturanza, 133
to the law applicable provided that said judgments have not yet attained finality (Villanueva v. Court of First SCRA 344 [1984]).
Instance of Oriental Mindoro, Pinamalayan Branch II, 119 SCRA 288 [1982]). In fact, motions for There is no argument against the rule that parties should not be permitted to litigate the same issue more
reconsideration are allowed to convince the courts that their rulings are erroneous and improper Siy v. Court than once and when a right or fact has been judicially tried and determined by a court of competent
of Appeals, 138 SCRA 543-544 [1985]; Guerra Enterprises Co., Inc. v. CFI of Lanao del Sur (32 SCRA 317 jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity
[1970]) and in so doing, said courts are given sufficient opportunity to correct their errors. with them in law or estate (Sy Kao v. Court of Appeals, 132 SCRA 302 [1984]).
In the case at bar, a careful analysis of the records will show that petitioner admitted among others in its But a careful review of the records shows that there is no judgment on the merits in G.R. No. 73569 and in
complaint in Interpleader that it is still obligated to pay certain amounts to private respondent; that it claims the case at bar, G.R. No. 73794; both of which deal on mere incidents arising therefrom.
no interest in such amounts due and is willing to pay whoever is declared entitled to said amounts. Such In G.R. No 73569, the issue raised is the propriety of the grant of the motion for reconsideration without a
admissions in the complaint were reaffirmed in open court before the Court of Appeals as stated in the latter hearing thereon and the denial of the motion for execution, while in the case at bar, what is assailed is the
court's resolution dated September 5, 1985 in A.C. G.R. No. 04869 which states: propriety of the order of respondent appellant court that petitioner Eternal Gardens should deposit whatever
The private respondent (MEMORIAL) then reaffirms before the Court its original amounts are due from it under the Land Development Agreement with a reputable bank to be designated by
position that it is a disinterested party with respect to the property now the subject of the the Court. In fact, there is a pending trial on the merits in the trial court which the petitioner insists is a
interpleader case ... prejudicial question which should first be resolved. Moreover, while there may be Identity of parties and of
In the light of the willingness, expressly made before the court, affirming the complaint subject matter, the Land Development Contract, there is no Identity of issues as clearly shown by the
filed below, that the private respondent (MEMORIAL) will pay whatever is due on the petitions filed.
Land Development Agreement to the rightful owner/owners, there is no reason why the PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit; (b) this case (together with all
amount due on subject agreement has not been placed in the custody of the Court. (Rollo, the claims of the intervenors on the merits) is REMANDED to the lower court for further proceedings; and
p. 227). (c) the resolution of the Third Division of this Court of July 8, 1987 requiring the deposit by the petitioner
Under the circumstances, there appears to be no plausible reason for petitioner's objections to the deposit of (see footnote No. 6) of the amounts contested in a depositary bank STANDS (the Motion for
the amounts in litigation after having asked for the assistance of the lower court by filing a complaint for Reconsideration thereof being hereby DENIED for reasons already discussed) until after the decision on the
interpleader where the deposit of aforesaid amounts is not only required by the nature of the action but is a merits shall have become final and executory.
contractual obligation of the petitioner under the Land Development Program (Rollo, p. 252). SO ORDERED.
As correctly observed by the Court of Appeals, the essence of an interpleader, aside from the disavowal of
interest in the property in litigation on the part of the petitioner, is the deposit of the property or funds in
controversy with the court. it is a rule founded on justice and equity: "that the plaintiff may not continue to
benefit from the property or funds in litigation during the pendency of the suit at the expense of whoever
will ultimately be decided as entitled thereto." (Rollo, p. 24).
The case at bar was elevated to the Court of Appeals on certiorari with prohibitory and mandatory
injunction. Said appellate court found that more than twenty million pesos are involved; so that on interest
alone for savings or time deposit would be considerable, now accruing in favor of the Eternal Gardens.
Finding that such is violative of the very essence of the complaint for interpleader as it clearly runs against
the interest of justice in this case, the Court of Appeals cannot be faulted for finding that the lower court
committed a grave abuse of discretion which requires correction by the requirement that a deposit of said
amounts should be made to a bank approved by the Court. (Rollo, p.-25)
Petitioner would now compound the issue by its obvious turn-about, presently claiming in its memorandum
that there is a novation of contract so that the amounts due under the Land Development Agreement were
allegedly extinguished, and the requirement to make a deposit of said amounts in a depositary bank should
be held in abeyance until after the conflicting claims of ownership now on trial before Branch CXXII RTC-
Caloocan City, has finally been resolved.
All these notwithstanding, the need for the deposit in question has been established, riot only in the lower
courts and in the Court of Appeals but also in the Supreme Court where such deposit was required in "the
resolution of July 8, 1987 to avoid wastage of funds.
II
The claim that this case should be barred by res judicata is even more untenable.
The requisite of res judicata are: (1) the presence of a final former judgment; (2) the former judgment was
rendered by a court having jurisdiction over the subject matter and the parties; (3) the former judgment is a
judgment on the merits; and (4) there is between the first and the second action identity of parties, of subject

139
 THIRD DIVISION
G.R. No. 136409 March 14, 2008
SUBHASH C. PASRICHA and JOSEPHINE A. PASRICHA, Petitioners,
vs.
DON LUIS DISON REALTY, INC., Respondent.
DECISION
NACHURA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal of the
Decision1 of the Court of Appeals (CA) dated May 26, 1998 and its Resolution 2 dated December 10, 1998 in
CA-G.R. SP No. 37739 dismissing the petition filed by petitioners Josephine and Subhash Pasricha.
The facts of the case, as culled from the records, are as follows:
Respondent Don Luis Dison Realty, Inc. and petitioners executed two Contracts of Lease3 whereby the
former, as lessor, agreed to lease to the latter Units 22, 24, 32, 33, 34, 35, 36, 37 and 38 of the San Luis
Building, located at 1006 M.Y. Orosa cor. T.M. Kalaw Streets, Ermita, Manila. Petitioners, in turn, agreed
to pay monthly rentals, as follows:
For Rooms 32/35:
From March 1, 1991 to August 31, 1991 – ₱5,000.00/₱10,000.00
From September 1, 1991 to February 29, 1992 – ₱5,500.00/₱11,000.00
From March 1, 1992 to February 28, 1993 – ₱6,050.00/₱12,100.00
From March 1, 1993 to February 28, 1994 – ₱6,655.00/₱13,310.00
From March 1, 1994 to February 28, 1995 – ₱7,320.50/₱14,641.00
From March 1, 1995 to February 28, 1996 – ₱8,052.55/₱16,105.10
From March 1, 1996 to February 29, 1997 – ₱8,857.81/₱17,715.61
From March 1, 1997 to February 28, 1998 – ₱9,743.59/₱19,487.17
From March 1, 1998 to February 28, 1999 – ₱10,717.95/₱21,435.89
From March 1, 1999 to February 28, 2000 – ₱11,789.75/₱23,579.484
For Rooms 22 and 24:
Effective July 1, 1992 – ₱10,000.00 with an increment of 10% every two years. 5
For Rooms 33 and 34:
Effective April 1, 1992 – ₱5,000.00 with an increment of 10% every two years.6
For Rooms 36, 37 and 38:
Effective when tenants vacate said premises – ₱10,000.00 with an increment of 10% every two years. 7
Petitioners were, likewise, required to pay for the cost of electric consumption, water bills and the use of
telephone cables.8
The lease of Rooms 36, 37 and 38 did not materialize leaving only Rooms 22, 24, 32, 33, 34 and 35 as
subjects of the lease contracts.9 While the contracts were in effect, petitioners dealt with Francis Pacheco
(Pacheco), then General Manager of private respondent. Thereafter, Pacheco was replaced by Roswinda
Bautista (Ms. Bautista).10Petitioners religiously paid the monthly rentals until May 1992. 11 After that,
however, despite repeated demands, petitioners continuously refused to pay the stipulated rent.
Consequently, respondent was constrained to refer the matter to its lawyer who, in turn, made a final
demand on petitioners for the payment of the accrued rentals amounting to ₱916,585.58. 12 Because
petitioners still refused to comply, a complaint for ejectment was filed by private respondent through its
representative, Ms. Bautista, before the Metropolitan Trial Court (MeTC) of Manila. 13The case was raffled
to Branch XIX and was docketed as Civil Case No. 143058-CV.
Petitioners admitted their failure to pay the stipulated rent for the leased premises starting July until
November 1992, but claimed that such refusal was justified because of the internal squabble in respondent
company as to the person authorized to receive payment.14 To further justify their non-payment of rent,
petitioners alleged that they were prevented from using the units (rooms) subject matter of the lease contract,
except Room 35. Petitioners eventually paid their monthly rent for December 1992 in the amount of
140
₱30,000.00, and claimed that respondent waived its right to collect the rents for the months of July to
November 1992 since petitioners were prevented from using Rooms 22, 24, 32, 33, and 34. 15 However, they
again withheld payment of rents starting January 1993 because of respondent’s refusal to turn over Rooms
36, 37 and 38.16 To show good faith and willingness to pay the rents, petitioners alleged that they prepared
the check vouchers for their monthly rentals from January 1993 to January 1994. 17 Petitioners further
averred in their Amended Answer18 that the complaint for ejectment was prematurely filed, as the
controversy was not referred to the barangay for conciliation.
For failure of the parties to reach an amicable settlement, the pre-trial conference was terminated.
Thereafter, they submitted their respective position papers.
On November 24, 1994, the MeTC rendered a Decision dismissing the complaint for ejectment. 19 It
considered petitioners’ non-payment of rentals as unjustified. The court held that mere willingness to pay
the rent did not amount to payment of the obligation; petitioners should have deposited their payment in the
name of respondent company. On the matter of possession of the subject premises, the court did not give
credence to petitioners’ claim that private respondent failed to turn over possession of the premises. The
court, however, dismissed the complaint because of Ms. Bautista’s alleged lack of authority to sue on behalf
of the corporation.
Deciding the case on appeal, the Regional Trial Court (RTC) of Manila, Branch 1, in Civil Case No. 94-
72515, reversed and set aside the MeTC Decision in this wise:
WHEREFORE, the appealed decision is hereby reversed and set aside and another one is rendered ordering
defendants-appellees and all persons claiming rights under them, as follows:
(1) to vacate the leased premised (sic) and restore possession thereof to plaintiff-appellant;
(2) to pay plaintiff-appellant the sum of ₱967,915.80 representing the accrued rents in arrears as of
November 1993, and the rents on the leased premises for the succeeding months in the amounts
stated in paragraph 5 of the complaint until fully paid; and
(3) to pay an additional sum equivalent to 25% of the rent accounts as and for attorney’s fees plus
the costs of this suit.
SO ORDERED.20
The court adopted the MeTC’s finding on petitioners’ unjustified refusal to pay the rent, which is a valid
ground for ejectment. It, however, faulted the MeTC in dismissing the case on the ground of lack of capacity
to sue. Instead, it upheld Ms. Bautista’s authority to represent respondent notwithstanding the absence of a
board resolution to that effect, since her authority was implied from her power as a general
manager/treasurer of the company.21
Aggrieved, petitioners elevated the matter to the Court of Appeals in a petition for review on certiorari. 22 On
March 18, 1998, petitioners filed an Omnibus Motion 23 to cite Ms. Bautista for contempt; to strike down the
MeTC and RTC Decisions as legal nullities; and to conduct hearings and ocular inspections or delegate the
reception of evidence. Without resolving the aforesaid motion, on May 26, 1998, the CA affirmed 24 the RTC
Decision but deleted the award of attorney’s fees.25
Petitioners moved for the reconsideration of the aforesaid decision. 26 Thereafter, they filed several motions
asking the Honorable Justice Ruben T. Reyes to inhibit from further proceeding with the case allegedly
because of his close association with Ms. Bautista’s uncle-in-law.27
In a Resolution28 dated December 10, 1998, the CA denied the motions for lack of merit. The appellate court
considered said motions as repetitive of their previous arguments, irrelevant and obviously dilatory. 29 As to
the motion for inhibition of the Honorable Justice Reyes, the same was denied, as the appellate court justice
stressed that the decision and the resolution were not affected by extraneous matters. 30 Lastly, the appellate
court granted respondent’s motion for execution and directed the RTC to issue a new writ of execution of its
decision, with the exception of the award of attorney’s fees which the CA deleted. 31
Petitioners now come before this Court in this petition for review on certiorari raising the following issues:
I.
 Whether this ejectment suit should be dismissed and whether petitioners are entitled to damages
for the unauthorized and malicious filing by Rosario (sic) Bautista of this ejectment case, it being
clear that [Roswinda] – whether as general manager or by virtue of her subsequent designation by
the Board of Directors as the corporation’s attorney-in-fact – had no legal capacity to institute the
ejectment suit, independently of whether Director Pacana’s Order setting aside the SEC revocation
Order is a mere scrap of paper.
II.
Whether the RTC’s and the Honorable Court of Appeals’ failure and refusal to resolve the most
fundamental factual issues in the instant ejectment case render said decisions void on their face by
reason of the complete abdication by the RTC and the Honorable Justice Ruben Reyes of their
constitutional duty not only to clearly and distinctly state the facts and the law on which a decision
is based but also to resolve the decisive factual issues in any given case.
III.
Whether the (1) failure and refusal of Honorable Justice Ruben Reyes to inhibit himself, despite
his admission – by reason of his silence – of petitioners’ accusation that the said Justice enjoyed a
$7,000.00 scholarship grant courtesy of the uncle-in-law of respondent "corporation’s" purported
general manager and (2), worse, his act of ruling against the petitioners and in favor of the
respondent "corporation" constitute an unconstitutional deprivation of petitioners’ property without
due process of law.32
In addition to Ms. Bautista’s lack of capacity to sue, petitioners insist that respondent company has no
standing to sue as a juridical person in view of the suspension and eventual revocation of its certificate of
registration.33 They likewise question the factual findings of the court on the bases of their ejectment from
the subject premises. Specifically, they fault the appellate court for not finding that: 1) their non-payment of
rentals was justified; 2) they were deprived of possession of all the units subject of the lease contract except
Room 35; and 3) respondent violated the terms of the contract by its continued refusal to turn over
possession of Rooms 36, 37 and 38. Petitioners further prayed that a Temporary Restraining Order (TRO) be
issued enjoining the CA from enforcing its Resolution directing the issuance of a Writ of Execution. Thus,
in a Resolution34 dated January 18, 1999, this Court directed the parties to maintain the status quo effective
immediately until further orders.
The petition lacks merit.
We uphold the capacity of respondent company to institute the ejectment case. Although the Securities and
Exchange Commission (SEC) suspended and eventually revoked respondent’s certificate of registration on
February 16, 1995, records show that it instituted the action for ejectment on December 15, 1993.
Accordingly, when the case was commenced, its registration was not yet revoked. 35 Besides, as correctly
held by the appellate court, the SEC later set aside its earlier orders of suspension and revocation of
respondent’s certificate, rendering the issue moot and academic. 36
We likewise affirm Ms. Bautista’s capacity to sue on behalf of the company despite lack of proof of
authority to so represent it. A corporation has no powers except those expressly conferred on it by the
Corporation Code and those that are implied from or are incidental to its existence. In turn, a corporation
exercises said powers through its board of directors and/or its duly authorized officers and agents. Physical
acts, like the signing of documents, can be performed only by natural persons duly authorized for the
purpose by corporate by-laws or by a specific act of the board of directors.37 Thus, any person suing on
behalf of the corporation should present proof of such authority. Although Ms. Bautista initially failed to
show that she had the capacity to sign the verification and institute the ejectment case on behalf of the
company, when confronted with such question, she immediately presented the Secretary’s
Certificate38 confirming her authority to represent the company.
There is ample jurisprudence holding that subsequent and substantial compliance may call for the relaxation
of the rules of procedure in the interest of justice.39 In Novelty Phils., Inc. v. Court of Appeals, 40 the Court
faulted the appellate court for dismissing a petition solely on petitioner’s failure to timely submit proof of
141
authority to sue on behalf of the corporation. In Pfizer, Inc. v. Galan, 41 we upheld the sufficiency of a
petition verified by an employment specialist despite the total absence of a board resolution authorizing her
to act for and on behalf of the corporation. Lastly, in China Banking Corporation v. Mondragon
International Philippines, Inc,42 we relaxed the rules of procedure because the corporation ratified the
manager’s status as an authorized signatory. In all of the above cases, we brushed aside technicalities in the
interest of justice. This is not to say that we disregard the requirement of prior authority to act in the name of
a corporation. The relaxation of the rules applies only to highly meritorious cases, and when there is
substantial compliance. While it is true that rules of procedure are intended to promote rather than frustrate
the ends of justice, and while the swift unclogging of court dockets is a laudable objective, we should not
insist on strict adherence to the rules at the expense of substantial justice.43 Technical and procedural rules
are intended to help secure, not suppress, the cause of justice; and a deviation from the rigid enforcement of
the rules may be allowed to attain that prime objective, for, after all, the dispensation of justice is the core
reason for the existence of courts.44
As to the denial of the motion to inhibit Justice Reyes, we find the same to be in order. First, the motion to
inhibit came after the appellate court rendered the assailed decision, that is, after Justice Reyes had already
rendered his opinion on the merits of the case. It is settled that a motion to inhibit shall be denied if filed
after a member of the court had already given an opinion on the merits of the case, the rationale being that "a
litigant cannot be permitted to speculate on the action of the court x x x (only to) raise an objection of this
sort after the decision has been rendered."45 Second, it is settled that mere suspicion that a judge is partial to
one of the parties is not enough; there should be evidence to substantiate the suspicion. Bias and prejudice
cannot be presumed, especially when weighed against a judge’s sacred pledge under his oath of office to
administer justice without regard for any person and to do right equally to the poor and the rich. There must
be a showing of bias and prejudice stemming from an extrajudicial source, resulting in an opinion on the
merits based on something other than what the judge learned from his participation in the case.46 We would
like to reiterate, at this point, the policy of the Court not to tolerate acts of litigants who, for just about any
conceivable reason, seek to disqualify a judge (or justice) for their own purpose, under a plea of bias,
hostility, prejudice or prejudgment.47
We now come to the more substantive issue of whether or not the petitioners may be validly ejected from
the leased premises.
Unlawful detainer cases are summary in nature. In such cases, the elements to be proved and resolved are
the fact of lease and the expiration or violation of its terms.48 Specifically, the essential requisites of
unlawful detainer are: 1) the fact of lease by virtue of a contract, express or implied; 2) the expiration or
termination of the possessor’s right to hold possession; 3) withholding by the lessee of possession of the
land or building after the expiration or termination of the right to possess; 4) letter of demand upon lessee to
pay the rental or comply with the terms of the lease and vacate the premises; and 5) the filing of the action
within one year from the date of the last demand received by the defendant. 49
It is undisputed that petitioners and respondent entered into two separate contracts of lease involving nine
(9) rooms of the San Luis Building. Records, likewise, show that respondent repeatedly demanded that
petitioners vacate the premises, but the latter refused to heed the demand; thus, they remained in possession
of the premises. The only contentious issue is whether there was indeed a violation of the terms of the
contract: on the part of petitioners, whether they failed to pay the stipulated rent without justifiable cause;
while on the part of respondent, whether it prevented petitioners from occupying the leased premises except
Room 35.
This issue involves questions of fact, the resolution of which requires the evaluation of the evidence
presented. The MeTC, the RTC and the CA all found that petitioners failed to perform their obligation to
pay the stipulated rent. It is settled doctrine that in a civil case, the conclusions of fact of the trial court,
especially when affirmed by the Court of Appeals, are final and conclusive, and cannot be reviewed on
appeal by the Supreme Court.50 Albeit the rule admits of exceptions, not one of them obtains in this case. 51
To settle this issue once and for all, we deem it proper to assess the array of factual findings supporting the
court’s conclusion.
The evidence of petitioners’ non-payment of the stipulated rent is overwhelming. Petitioners, however,
claim that such non-payment is justified by the following: 1) the refusal of respondent to allow petitioners to
use the leased properties, except room 35; 2) respondent’s refusal to turn over Rooms 36, 37 and 38; and 3)
respondent’s refusal to accept payment tendered by petitioners.
Petitioners’ justifications are belied by the evidence on record. As correctly held by the CA, petitioners’
communications to respondent prior to the filing of the complaint never mentioned their alleged inability to
use the rooms.52 What they pointed out in their letters is that they did not know to whom payment should be
made, whether to Ms. Bautista or to Pacheco.53 In their July 26 and October 30, 1993 letters, petitioners only
questioned the method of computing their electric billings without, however, raising a complaint about their
failure to use the rooms.54 Although petitioners stated in their December 30, 1993 letter that respondent
failed to fulfill its part of the contract,55 nowhere did they specifically refer to their inability to use the leased
rooms. Besides, at that time, they were already in default on their rentals for more than a year.
If it were true that they were allowed to use only one of the nine (9) rooms subject of the contract of lease,
and considering that the rooms were intended for a business purpose, we cannot understand why they did
not specifically assert their right. If we believe petitioners’ contention that they had been prevented from
using the rooms for more than a year before the complaint for ejectment was filed, they should have
demanded specific performance from the lessor and commenced an action in court. With the execution of
the contract, petitioners were already in a position to exercise their right to the use and enjoyment of the
property according to the terms of the lease contract.56 As borne out by the records, the fact is that
respondent turned over to petitioners the keys to the leased premises and petitioners, in fact, renovated the
rooms. Thus, they were placed in possession of the premises and they had the right to the use and enjoyment
of the same. They, likewise, had the right to resist any act of intrusion into their peaceful possession of the
property, even as against the lessor itself. Yet, they did not lift a finger to protect their right if, indeed, there
was a violation of the contract by the lessor.
What was, instead, clearly established by the evidence was petitioners’ non-payment of rentals because
ostensibly they did not know to whom payment should be made. However, this did not justify their failure to
pay, because if such were the case, they were not without any remedy. They should have availed of the
provisions of the Civil Code of the Philippines on the consignation of payment and of the Rules of Court on
interpleader.
Article 1256 of the Civil Code provides:
Article 1256. If the creditor to whom tender of payment has been made refuses without just cause to accept
it, the debtor shall be released from responsibility by the consignation of the thing or sum due.
Consignation alone shall produce the same effect in the following cases:
xxxx
(4) When two or more persons claim the same right to collect;
x x x x.
Consignation shall be made by depositing the things due at the disposal of a judicial authority, before whom
the tender of payment shall be proved in a proper case, and the announcement of the consignation in other
cases.57
In the instant case, consignation alone would have produced the effect of payment of the rentals. The
rationale for consignation is to avoid the performance of an obligation becoming more onerous to the debtor
by reason of causes not imputable to him.58 Petitioners claim that they made a written tender of payment and
actually prepared vouchers for their monthly rentals. But that was insufficient to constitute a valid tender of
payment. Even assuming that it was valid tender, still, it would not constitute payment for want of
consignation of the amount. Well-settled is the rule that tender of payment must be accompanied by
consignation in order that the effects of payment may be produced.59
Moreover, Section 1, Rule 62 of the Rules of Court provides:
142
Section 1. When interpleader proper. – Whenever conflicting claims upon the same subject matter are or
may be made against a person who claims no interest whatever in the subject matter, or an interest which in
whole or in part is not disputed by the claimants, he may bring an action against the conflicting claimants to
compel them to interplead and litigate their several claims among themselves.
Otherwise stated, an action for interpleader is proper when the lessee does not know to whom payment of
rentals should be made due to conflicting claims on the property (or on the right to collect). 60 The remedy is
afforded not to protect a person against double liability but to protect him against double vexation in respect
of one liability.61
Notably, instead of availing of the above remedies, petitioners opted to refrain from making payments.
Neither can petitioners validly invoke the non-delivery of Rooms 36, 37 and 38 as a justification for non-
payment of rentals. Although the two contracts embraced the lease of nine (9) rooms, the terms of the
contracts - with their particular reference to specific rooms and the monthly rental for each - easily raise the
inference that the parties intended the lease of each room separate from that of the others.lavvphil There is
nothing in the contract which would lead to the conclusion that the lease of one or more rooms was to be
made dependent upon the lease of all the nine (9) rooms. Accordingly, the use of each room by the lessee
gave rise to the corresponding obligation to pay the monthly rental for the same. Notably, respondent
demanded payment of rentals only for the rooms actually delivered to, and used by, petitioners.
It may also be mentioned that the contract specifically provides that the lease of Rooms 36, 37 and 38 was to
take effect only when the tenants thereof would vacate the premises. Absent a clear showing that the
previous tenants had vacated the premises, respondent had no obligation to deliver possession of the subject
rooms to petitioners. Thus, petitioners cannot use the non-delivery of Rooms 36, 37 and 38 as an excuse for
their failure to pay the rentals due on the other rooms they occupied.1avvphil
In light of the foregoing disquisition, respondent has every right to exercise his right to eject the erring
lessees. The parties’ contracts of lease contain identical provisions, to wit:
In case of default by the LESSEE in the payment of rental on the fifth (5th) day of each month, the amount
owing shall as penalty bear interest at the rate of FOUR percent (4%) per month, to be paid, without
prejudice to the right of the LESSOR to terminate his contract, enter the premises, and/or eject the LESSEE
as hereinafter set forth;62
Moreover, Article 167363 of the Civil Code gives the lessor the right to judicially eject the lessees in case of
non-payment of the monthly rentals. A contract of lease is a consensual, bilateral, onerous and commutative
contract by which the owner temporarily grants the use of his property to another, who undertakes to pay the
rent therefor.64 For failure to pay the rent, petitioners have no right to remain in the leased premises.
WHEREFORE, premises considered, the petition is DENIED and the Status Quo Order dated January 18,
1999 is hereby LIFTED. The Decision of the Court of Appeals dated May 26, 1998 and its Resolution dated
December 10, 1998 in CA-G.R. SP No. 37739 are AFFIRMED.
SO ORDERED.
 SECOND DIVISION ii. CB bill nos. 45347-50
G.R. Nos. 154470-71 September 24, 2012 On April 20, 1994, the BOC sold the remaining four (4) CB bills to Capital One Equities
BANK OF COMMERCE, Petitioner, Corporation13 which transferred them to All-Asia Capital and Trust Corporation (All Asia). On September
vs. 30, 1994, All Asia further transferred the four CB bills back to the RCBC. 14
PLANTERS DEVELOPMENT BANK and BANGKO SENTRAL NG PILIPINAS, Respondent. On November 16, 1994, the RCBC sold back to All Asia one of these 4 CB bills. When the BSP refused to
x-----------------------x release the amount of this CB bill on maturity, the BOC purchased from All Asia this lone CB
G.R. Nos. 154589-90 bill,15 particularly described as follows:16
BANGKO SENTRAL NG PILIPINAS, Petitioner,
Serial No.: 2BB XM 045348
vs.
PLANTERS DEVELOPMENT BANK, Respondent. Quantity: One (1)
DECISION
BRION, J.: Denomination: Php 10 million
Before the Court are two consolidated petitions for review on certiorari under Rule 45,1 on pure questions of
law, filed by the petitioners Bank of Commerce (BOC) and the Bangko Sentral ng Pilipinas (BSP). They Total Face Value: Php 10 million
assail the January 10, 2002 and July 23, 2002 Orders (assailed orders) of the Regional Trial Court (RTC) of
As the registered owner of the remaining three CB bills, the RCBC sold them to IVI Capital and Insular
Makati City, Branch 143, in Civil Case Nos. 94-3233 and 94-3254. These orders dismissed (i) the petition Savings Bank. Again, when the BSP refused to release the amount of this CB bill on maturity, the RCBC
filed by the Planters Development Bank (PDB), (ii) the "counterclaim" filed by the BOC, and (iii) the paid back its transferees, reacquired these three CB bills and sold them to the BOC – ultimately, the BOC
counter-complaint/cross-claim for interpleader filed bythe BSP; and denied the BOC’s and the BSP’s acquired these three CB bills.
motions for reconsideration. All in all, the BOC acquired the first set of seven CB bills.
THE ANTECEDENTS II. Second set of CB bills
The Central Bank bills On April 19, 1994, the RCBC, as registered owner, (i) sold two CB bills with a total face value of ₱ 20
I. First set of CB bills million to the PDB and (ii) delivered to the PDB the corresponding Detached Assignment. 17 The two CB
The Rizal Commercial Banking Corporation (RCBC) was the registered owner of seven Central Bank (CB) bills were particularly described as follows:
bills with a total face value of ₱ 70 million, issued on January 2, 1994 and would mature on January 2,
1995.2 As evidenced by a "Detached Assignment" dated April 8, 1994, 3 the RCBC sold these CB bills to the Serial No.: BB XM 045373
BOC.4 As evidenced by another "Detached Assignment"5 of even date, the BOC, in turn, sold these CB bills BB XM 045374
to the PDB.6 The BOC delivered the Detached Assignments to the PDB.7
On April 15, 1994 (April 15 transaction), the PDB, in turn, sold to the BOC Treasury Bills worth ₱ 70 Issue date: January 3, 1994
million, with maturity date of June 29, 1994, as evidenced by a Trading Order 8 and a Confirmation of
Maturity date: January 2, 1995
Sale.9 However, instead of delivering the Treasury Bills, the PDB delivered the seven CB bills to the BOC,
as evidenced by a PDB Security Delivery Receipt, bearing a "note: ** substitution in lieu of 06-29-94" – Denomination: Php 10 million
referring to the Treasury Bills.10 Nevertheless, the PDB retained possession of the Detached Assignments. It
is basically the nature of this April 15 transaction that the PDB and the BOC cannot agree on. Total Face value: Php 20 million
The transfer of the first set of seven CB bills
i. CB bill nos. 45351-53 On even date, the PDB delivered to Bancap the two CB bills18 (April 19 transaction). In turn, Bancap sold
On April 20, 1994, according to the BOC, it "sold back"11 to the PDB three of the seven CB bills. In turn, the the CB bills to Al-Amanah Islamic Investment Bank of the Philippines, which in turn sold it to the BOC.19
PDB transferred these three CB bills to Bancapital Development Corporation (Bancap). On April 25, 1994, PDB’s move against the transfer of
the BOC bought the three CB bills from Bancap – so, ultimately, the BOC reacquired these three CB the first and second sets of CB bills
bills,12 particularly described as follows: On June 30, 1994, upon learning of the transfers involving the CB bills, the PDB informed20 the Officer-in-
Charge of the BSP’s Government Securities Department,21 Lagrimas Nuqui, of the PDB’s claim over these
Serial No.: 2BB XM 045351 CB bills, based on the Detached Assignments in its possession. The PDB requested the BSP 22 to record its
2BB XM 045352 claim in the BSP’s books, explaining that its non-possession of the CB bills is "on account of imperfect
2BB XM 045353 negotiations thereof and/or subsequent setoff or transfer."23
Nuqui denied the request, invoking Section 8 of CB Circular No. 28 (Regulations Governing Open Market
Quantity: Three (3) Operations, Stabilization of the Securities Market, Issue, Servicing and Redemption of the Public
Debt)24 which requires the presentation of the bond before a registered bond may be transferred on the books
Denomination: Php 10 million
of the BSP.25
Total Face Value: Php 30 million In a July 25, 1994 letter, the PDB clarified to Nuqui that it was not "asking for the transfer of the CB
Bills…. rather it intends to put the BSP on formal notice that whoever is in possession of said bills is not a

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holder in due course," and, therefore the BSP should not make payment upon the presentation of the CB
bills on maturity.26 Nuqui responded that the BSP was "not in a position at that point in time to determine
who is and who is not the holder in due course since it is not privy to all acts and time involving the transfers
or negotiation" of the CB bills. Nuqui added that the BSP’s action shall be governed by CB Circular No. 28,
as amended.27
On November 17, 1994, the PDB also asked BSP Deputy Governor Edgardo Zialcita that (i) a notation in
the BSP’s books be made against the transfer, exchange, or payment of the bonds and the payment of
interest thereon; and (ii) the presenter of the bonds upon maturity be required to submit proof as a holder in
due course (of the first set of CB bills). The PDB relied on Section 10 (d) 4 of CB Circular No. 28. 28 This
provision reads:
(4) Assignments effected by fraud – Where the assignment of a registered bond is secured by fraudulent
representations, the Central Bank can grant no relief if the assignment has been honored without notice of
fraud. Otherwise, the Central Bank, upon receipt of notice that the assignment is claimed to have been
secured by fraudulent representations, or payment of the bond the payment of interest thereon, and when the
bond is presented, will call upon the owner and the person presenting the bond to substantiate their
respective claims.If it then appears that the person presenting the bond stands in the position of bonafide
holder for value, the Central Bank, after giving the owner an opportunity to assert his claim, will pass the
bond for transfer, exchange or payments, as the case may be, without further question.
In a December 29, 1994 letter, Nuqui again denied the request, reiterating the BSP’s previous stand.
In light of these BSP responses and the impending maturity of the CB bills, the PDB filed 29 with the RTC
two separate petitions for Mandamus, Prohibition and Injunction with prayer for Preliminary Injunction and
Temporary Restraining Order, docketed as Civil Case No. 94-3233 (covering the first set of CB bills) and
Civil Case 94-3254 (covering the second set of CB bills) against Nuqui, the BSP and the RCBC. 30
The PDB essentially claims that in both the April 15 transaction (involving the first set of CB bills) and the
April 19 transaction (involving the second set of CB bills), there was no intent on its part to transfer title of
the CB bills, as shown by its non-issuance of a detached assignment in favor of the BOC and Bancap,
respectively. The PDB particularly alleges that it merely "warehoused"31 the first set of CB bills with the
BOC, as security collateral.
On December 28, 1994, the RTC temporarily enjoined Nuqui and the BSP from paying the face value of the
CB bills on maturity.32 On January 10, 1995, the PDB filed an Amended Petition, additionally impleading
the BOC and All Asia.33 In a January 13, 1995 Order, the cases were consolidated. 34 On January 17, 1995,
the RTC granted the PDB’s application for a writ of preliminary prohibitory injunction. 35 In both petitions,
the PDB identically prayed:
WHEREFORE, it is respectfully prayed x x x that, after due notice and hearing, the Writs of Mandamus,
Prohibition and Injunction, be issued; (i) commanding the BSP and Nuqui, or whoever may take her place -
(a) to record forthwith in the books of BSP the claim of x x x PDB on the [two sets of] CB Bills in
accordance with Section 10 (d) (4) of revised C.B. Circular No. 28; and
(b) also pursuant thereto, when the bills are presented on maturity date for payment, to call (i) x x x PDB,
(ii) x x x RCBC x x x, (iii) x x x BOC x x x, and (iv) x x x ALL-ASIA x x x; or whoever will present the
[first and second sets of] CB Bills for payment, to submit proof as to who stands as the holder in due course
of said bills, and, thereafter, act accordingly;
and (ii) ordering the BSP and Nuqui to pay jointly and severally to x x x PDB the following:
(a) the sum of ₱ 100,000.00, as and for exemplary damages;
(b) the sum of at least ₱ 500,000.00, or such amount as shall be proved at the trial, as and for
attorney’s fees;
(c) the legal rate of interest from the filing of this Petition until full payment of the sums mentioned
in this Petition; and
(d) the costs of suit.36
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After the petitions were filed, the BOC acquired/reacquired all the nine CB bills – the first and second sets
of CB bills (collectively, subject CB bills).
Defenses of the BSP and of the BOC37
The BOC filed its Answer, praying for the dismissal of the petition. It argued that the PDB has no cause of
action against it since the PDB is no longer the owner of the CB bills. Contrary to the PDB’s "warehousing
theory,"38 the BOC asserted that the (i) April 15 transaction and the (ii) April 19 transaction – covering both
sets of CB bills - were valid contracts of sale, followed by a transfer of title (i) to the BOC (in the April 15
transaction) upon the PDB’s delivery of the 1st set of CB bills in substitution of the Treasury Bills the PDB
originally intended to sell, and (ii) to Bancap (in the April 19 transaction) upon the PDB’s delivery of the
2nd set of CB bills to Bancap, likewise by way of substitution.
The BOC adds that Section 10 (d) 4 of CB Circular No. 28 cannot apply to the PDB’s case because (i) the
PDB is not in possession of the CB bills and (ii) the BOC acquired these bills from the PDB, as to the 1st set
of CB bills, and from Bancap, as to the 2nd set of CB bills, in good faith and for value. The BOC also
asserted a compulsory counterclaim for damages and attorney’s fees.
On the other hand, the BSP countered that the PDB cannot invoke Section 10 (d) 4 of CB Circular No. 28
because this section applies only to an "owner" and a "person presenting the bond," of which the PDB is
neither. The PDB has not presented to the BSP any assignment of the subject CB bills, duly recorded in the
BSP’s books, in its favor to clothe it with the status of an "owner." 39 According to the BSP –
Section 10 d. (4) applies only to a registered bond which is assigned. And the issuance of CB Bills x x x are
required to be recorded/registered in BSP’s books. In this regard, Section 4 a. (1) of CB Circular 28 provides
that registered bonds "may be transferred only by an assignment thereon duly executed by the registered
owner or his duly authorized representative x x x and duly recorded on the books of the Central Bank."
xxxx
The alleged assignment of subject CB Bills in PDB’s favor is not recorded/registered in BSP’s
books.40(underscoring supplied)
Consequently, when Nuqui and the BSP refused the PDB’s request (to record its claim), they were merely
performing their duties in accordance with CB Circular No. 28.
Alternatively, the BSP asked that an interpleader suit be allowed between and among the claimants to the
subject CB bills on the position that while it is able and willing to pay the subject CB bills’ face value, it is
duty bound to ensure that payment is made to the rightful owner. The BSP prayed that judgment be
rendered:
a. Ordering the dismissal of the PDB’s petition for lack of merit;
b. Determining which between/among [PDB] and the other claimants is/are lawfully entitled to the
ownership of the subject CB bills and the proceeds thereof;
c. x x x;
d. Ordering PDB to pay BSP and Nuqui such actual/compensatory and exemplary damages… as
the RTC may deem warranted; and
e. Ordering PDB to pay Nuqui moral damages… and to pay the costs of the suit. 41
Subsequent events
The PDB agreed with the BSP’s alternative response for an interpleader –
4. PDB agrees that the various claimants should now interplead and substantiate their respective claims on
the subject CB bills. However, the total face value of the subject CB bills should be deposited in escrow
with a private bank to be disposed of only upon order of the RTC. 42
Accordingly, on June 9, 199543 and August 4, 1995,44 the BOC and the PDB entered into two separate
Escrow Agreements.45 The first agreement covered the first set of CB bills, while the second agreement
covered the second set of CB bills. The parties agreed to jointly collect from the BSP the maturity proceeds
of these CB bills and to deposit said amount in escrow, "pending final determination by Court judgment, or
amicable settlement as to who shall be eventually entitled thereto."46 The BOC and the PDB filed a Joint
Motion,47 submitting these Escrow Agreements for court approval. The RTC gave its approval to the parties’
Joint Motion.48 Accordingly, the BSP released the maturity proceeds of the CB bills by crediting the
Demand Deposit Account of the PDB and of the BOC with 50% each of the maturity proceeds of the
amount in escrow.49
In view of the BOC’s acquisition of all the CB bills, All Asia 50 moved to be dropped as a respondent (with
the PDB’s conformity51 ), which the RTC granted.52 The RCBC subsequently followed suit. 53
In light of the developments, on May 4, 1998, the RTC required the parties to manifest their intention
regarding the case and to inform the court of any amicable settlement; "otherwise, th[e] case shall be
dismissed for lack of interest."54 Complying with the RTC’s order, the BOC moved (i) that the case be set
for pre-trial and (ii) for further proceeding to resolve the remaining issues between the BOC and the PDB,
particularly on "who has a better right over the subject CB bills."55 The PDB joined the BOC in its motion.56
On September 28, 2000, the RTC granted the BSP’s motion to interplead and, accordingly, required the
BOC to amend its Answer and for the conflicting claimants to comment thereon. 57 In October 2000, the
BOC filed its Amended Consolidated Answer with Compulsory Counterclaim, reiterating its earlier
arguments asserting ownership over the subject CB bills.58
In the alternative, the BOC added that even assuming that there was no effective transfer of the nine CB bills
ultimately to the BOC, the PDB remains obligated to deliver to the BOC, as buyer in the April 15
transaction and ultimate successor-in-interest of the buyer (Bancap) in the April 19 transaction, either the
original subjects of the sales or the value thereof, plus whatever income that may have been earned during
the pendency of the case.59
That BOC prayed:
1. To declare BOC as the rightful owner of the nine (9) CB bills and as the party entitled to the
proceeds thereof as well as all income earned pursuant to the two (2) Escrow Agreements entered
into by BOC and PDB.
2. In the alternative, ordering PDB to deliver the original subject of the sales transactions or the
value thereof and whatever income earned by way of interest at prevailing rate.
Without any opposition or objection from the PDB, on February 23, 2001, the RTC admitted 60 the BOC’s
Amended Consolidated Answer with Compulsory Counterclaims.
In May 2001, the PDB filed an Omnibus Motion,61 questioning the RTC’s jurisdiction over the BOC’s
"additional counterclaims." The PDB argues that its petitions pray for the BSP (not the RTC) to determine
who among the conflicting claimants to the CB bills stands in the position of the bona fide holder for value.
The RTC cannot entertain the BOC’s counterclaim, regardless of its nature, because it is the BSP which has
jurisdiction to determine who is entitled to receive the proceeds of the CB bills.
The BOC opposed62 the PDB’s Omnibus Motion. The PDB filed its Reply. 63
In a January 10, 2002 Order, the RTC dismissed the PDB’s petition, the BOC’s counterclaim and the BSP’s
counter-complaint/cross-claim for interpleader, holding that under CB Circular No. 28, it has no jurisdiction
(i) over the BOC’s "counterclaims" and (ii) to resolve the issue of ownership of the CB bills. 64 With the
denial of their separate motions for Reconsideration,65 the BOC and the BSP separately filed the present
petitions for review on certiorari.66
THE BOC’S and THE BSP’S PETITIONS
The BOC argues that the present cases do not fall within the limited provision of Section 10 (d) 4 of CB
Circular No. 28, which contemplates only of three situations: first, where the fraudulent assignment is not
coupled with a notice to the BSP, it can grant no relief; second, where the fraudulent assignment is coupled
with a notice of fraud to the BSP, it will make a notation against the assignment and require the owner and
the holder to substantiate their claims; and third, where the case does not fall on either of the first two
situations, the BSP will have to await action on the assignment pending settlement of the case, whether by
agreement or by court order.
The PDB’s case cannot fall under the first two situations. With particular regard to the second situation, CB
Circular No. 28 requires that the conflict must be between an "owner" and a "holder," for the BSP to
exercise its limited jurisdiction to resolve conflicting claims; and the word "owner" here refers to the
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registered owner giving notice of the fraud to the BSP. The PDB, however, is not the registered owner nor is
it in possession (holder) of the CB bills.67Consequently, the PDB’s case can only falls under the third
situation which leaves the RTC, as a court of general jurisdiction, with the authority to resolve the issue of
ownership of a registered bond (the CB bills) not falling in either of the first two situations.
The BOC asserts that the policy consideration supportive of its interpretation of CB Circular No. 28 is to
have a reliable system to protect the registered owner; should he file a notice with the BSP about a
fraudulent assignment of certain CB bills, the BSP simply has to look at its books to determine who is the
owner of the CB bills fraudulently assigned. Since it is only the registered owner who complied with the
BSP’s requirement of recording an assignment in the BSP’s books, then "the protective mantle of
administrative proceedings" should necessarily benefit him only, without extending the same benefit to
those who chose to ignore the Circular’s requirement, like the PDB. 68
Assuming arguendo that the PDB’s case falls under the second situation – i.e., the BSP has jurisdiction to
resolve the issue of ownership of the CB bills – the more recent CB Circular No. 769-80 (Rules and
Regulations Governing Central Bank Certificates of Indebtedness) already superseded CB Circular No. 28,
and, in particular, effectively amended Section 10 (d) 4 of CB Circular No. 28. The pertinent provisions of
CB Circular No. 769-80 read:
Assignment Affected by Fraud. – Any assignment for transfer of ownership of registered certificate obtained
through fraudulent representation if honored by the Central Bank or any of its authorized service agencies
shall not make the Central Bank or agency liable therefore unless it has previous formal notice of the fraud.
The Central Bank, upon notice under oath that the assignment was secured through fraudulent means, shall
immediately issue and circularize a "stop order" against the transfer, exchange, redemption of the Certificate
including the payment of interest coupons. The Central Bank or service agency concerned shall continue to
withhold action on the certificate until such time that the conflicting claims have been finally settled either
by amicable settlement between the parties or by order of the Court.
Unlike CB Circular No. 28, CB Circular No. 769-80 limited the BSP’s authority to the mere issuance and
circularization of a "stop order" against the transfer, exchange and redemption upon sworn notice of a
fraudulent assignment. Under this Circular, the BSP shall only continue to withhold action until the dispute
is ended by an amicable settlement or by judicial determination. Given the more passive stance of the BSP –
the very agency tasked to enforce the circulars involved - under CB Circular No. 769-80, the RTC’s
dismissal of the BOC’s counterclaims is palpably erroneous.
Lastly, since Nuqui’s office (Government Securities Department) had already been abolished, 69 it can no
longer adjudicate the dispute under the second situation covered by CB Circular No. 28. The abolition of
Nuqui’s office is not only consistent with the BSP’s Charter but, more importantly, with CB Circular No.
769-80, which removed the BSP’s adjudicative authority over fraudulent assignments.
THE PDB’S COMMENT
The PDB claims that jurisdiction is determined by the allegations in the complaint/petition and not by the
defenses set up in the answer.70 In filing the petition with the RTC, the PDB merely seeks to compel the BSP
to determine, pursuant to CB Circular No. 28, the party legally entitled to the proceeds of the subject CB
bills, which, as the PDB alleged, have been transferred through fraudulent representations – an allegation
which properly recognized the BSP’s jurisdiction to resolve conflicting claims of ownership over the CB
bills.
The PDB adds that under the doctrine of primary jurisdiction, courts should refrain from determining a
controversy involving a question whose resolution demands the exercise of sound administrative discretion.
In the present case, the BSP’s special knowledge and experience in resolving disputes on securities, whose
assignment and trading are governed by the BSP’s rules, should be upheld.
The PDB counters that the BOC’s tri-fold interpretation of Section 10 (d) 4 of CB Circular No. 28 sanctions
split jurisdiction which is not favored;but even this tri-fold interpretation which, in the second situation,
limits the meaning of the "owner" to the registered owner is flawed. Section 10 (d) 4 aims to protect not just
the registered owner but anyone who has been deprived of his bond by fraudulent representation in order to
deter fraud in the secondary trading of government securities.
The PDB asserts that the existence of CB Circular No. 769-80 or the abolition of Nuqui’s office does not
result in depriving the BSP of its jurisdiction: first, CB Circular No. 769-80 expressly provides that CB
Circular No. 28 shall have suppletory application to CB Circular No. 769-80; and second, the BSP can
always designate an office to resolve the PDB’s claim over the CB bills.
Lastly, the PDB argues that even assuming that the RTC has jurisdiction to resolve the issue of ownership of
the CB bills, the RTC has not acquired jurisdiction over the BOC’s so-called "compulsory" counterclaims
(which in truth is merely "permissive") because of the BOC’s failure to pay the appropriate docket fees.
These counterclaims should, therefore, be dismissed and expunged from the record.
THE COURT’S RULING
We grant the petitions.
At the outset, we note that the parties have not raised the validity of either CB Circular No. 28 or CB
Circular No. 769-80 as an issue. What the parties largely contest is the applicable circular in case of an
allegedly fraudulently assigned CB bill. The applicable circular, in turn, is determinative of the proper
remedy available to the PDB and/or the BOC as claimants to the proceeds of the subject CB bills.
Indisputably, at the time the PDB supposedly invoked the jurisdiction of the BSP in 1994 (by requesting for
the annotation of its claim over the subject CB bills in the BSP’s books), CB Circular No. 769-80 has long
been in effect. Therefore, the parties’ respective interpretations of the provision of Section 10 (d) 4 of CB
Circular No. 28 do not have any significance unless it is first established that that Circular governs the
resolution of their conflicting claims of ownership. This conclusion is important, given the supposed repeal
or modification of Section 10 (d) 4 of CB Circular No. 28 by the following provisions of CB Circular No.
769-80:
ARTICLE XI
SUPPLEMENTAL RULES
Section 1. Central Bank Circular No. 28 – The provisions of Central Bank Circular No. 28 shall have
suppletory application to matters not specially covered by these Rules.
ARTICLE XII
EFFECTIVITY
Effectivity – The rules and regulations herein prescribed shall take effect upon approval by the Monetary
Board, Central Bank of the Philippines, and all circulars, memoranda, or office orders inconsistent herewith
are revoked or modified accordingly. (Emphases added)
We agree with the PDB that in view of CB Circular No. 28’s suppletory application, an attempt to
harmonize the apparently conflicting provisions is a prerequisite before one may possibly conclude that an
amendment or a repeal exists.71 Interestingly, however, even the PDB itself failed to submit an interpretation
based on its own position of harmonization.
The repealing clause of CB Circular No. 769-80 obviously did not expressly repeal CB Circular No. 28; in
fact, it even provided for the suppletory application of CB Circular No. 28 on "matters not specially covered
by" CB Circular No. 769-80. While no express repeal exists, the intent of CB Circular No. 769-80 to operate
as an implied repeal,72or at least to amend earlier CB circulars, is supported by its text "revoking" or
"modif[ying" "all circulars" which are inconsistent with its terms.
At the outset, we stress that none of the parties disputes that the subject CB bills fall within the category of a
certificate or evidence of indebtedness and that these were issued by the Central Bank, now the BSP. Thus,
even without resorting to statutory construction aids, matters involving the subject CB bills should
necessarily be governed by CB Circular No. 769-80. Even granting, however, that reliance on CB Circular
No. 769-80 alone is not enough, we find that CB Circular No. 769-80 impliedly repeals CB Circular No. 28.
An implied repeal transpires when a substantial conflict exists between the new and the prior laws. In the
absence of an express repeal, a subsequent law cannot be construed as repealing a prior law unless an
irreconcilable inconsistency and repugnancy exist in the terms of the new and the old laws. 73 Repeal by
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implication is not favored, unless manifestly intended by the legislature, or unless it is convincingly and
unambiguously demonstrated, that the laws or orders are clearly repugnant and patently inconsistent with
one another so that they cannot co-exist; the legislature is presumed to know the existing law and would
express a repeal if one is intended.74
There are two instances of implied repeal. One takes place when the provisions in the two acts on the same
subject matter are irreconcilably contradictory, in which case, the later act, to the extent of the conflict,
constitutes an implied repeal of the earlier one. The other occurs when the later act covers the whole subject
of the earlier one and is clearly intended as a substitute; thus, it will operate to repeal the earlier law.75
A general reading of the two circulars shows that the second instance of implied repeal is present in this
case. CB Circular No. 28, entitled "Regulations Governing Open Market Operations, Stabilization of
Securities Market, Issue, Servicing and Redemption of Public Debt," is a regulation governing the servicing
and redemption of public debt, including the issue, inscription, registration, transfer, payment and
replacement of bonds and securities representing the public debt. 76 On the other hand, CB Circular No. 769-
80, entitled "Rules and Regulations Governing Central Bank Certificate of Indebtedness," is the governing
regulation on matters77 (i) involving certificate of indebtedness78issued by the Central Bank itself and (ii)
which are similarly covered by CB Circular No. 28.
The CB Monetary Board issued CB Circular No. 28 to regulate the servicing and redemption of public debt,
pursuant to Section 124 (now Section 119 of Republic Act R.A. No. 7653) of the old Central Bank
law79 which provides that "the servicing and redemption of the public debt shall also be effected through the
Bangko Sentral." However, even as R.A. No. 7653 continued to recognize this role by the BSP, the law
required a phase-out of all fiscal agency functions by the BSP, including Section 119 of R.A. No. 7653.
In other words, even if CB Circular No. 28 applies broadly to both government-issued bonds and securities
and Central Bank-issued evidence of indebtedness, given the present state of law, CB Circular No. 28 and
CB Circular No. 769-80 now operate on the same subject – Central Bank-issued evidence of indebtedness.
Under Section 1, Article XI of CB Circular No. 769-80, the continued relevance and application of CB
Circular No. 28 would depend on the need to supplement any deficiency or silence in CB Circular No. 769-
80 on a particular matter.
In the present case, both CB Circular No. 28 and CB Circular No. 769-80 provide the BSP with a course of
action in case of an allegedly fraudulently assigned certificate of indebtedness. Under CB Circular No. 28, in
case of fraudulent assignments, the BSP would have to "call upon the owner and the person presenting the
bond to substantiate their respective claims" and, from there, determine who has a better right over the
registered bond. On the other hand, under CB Circular No. 769-80, the BSP shall merely "issue and
circularize a ‘stop order’ against the transfer, exchange, redemption of the [registered] certificate" without
any adjudicative function (which is the precise root of the present controversy). As the two circulars stand,
the patent irreconcilability of these two provisions does not require elaboration. Section 5, Article V of CB
Circular No. 769-80 inescapably repealed Section 10 (d) 4 of CB Circular No. 28.
The issue of BSP’s jurisdiction, lay hidden
On that note, the Court could have written finis to the present controversy by simply sustaining the BSP’s
hands-off approach to the PDB’s problem under CB Circular No. 769-80. However, the jurisdictional
provision of CB Circular No. 769-80 itself, in relation to CB Circular No. 28, on the matter of fraudulent
assignment, has given rise to a question of jurisdiction - the core question of law involved in these petitions -
which the Court cannot just treat sub-silencio.
Broadly speaking, jurisdiction is the legal power or authority to hear and determine a cause. 80 In the exercise
of judicial or quasi-judicial power, it refers to the authority of a court to hear and decide a case.81 In the
context of these petitions, we hark back to the basic principles governing the question of jurisdiction over
the subject matter.
First, jurisdiction over the subject matter is determined only by the Constitution and by law. 82 As a matter of
substantive law, procedural rules alone can confer no jurisdiction to courts or administrative agencies. 83 In
fact, an administrative agency, acting in its quasi-judicial capacity, is a tribunal of limited jurisdiction and,
as such, could wield only such powers that are specifically granted to it by the enabling statutes. In contrast,
an RTC is a court of general jurisdiction, i.e., it has jurisdiction over cases whose subject matter does not fall
within the exclusive original jurisdiction of any court, tribunal or body exercising judicial or quasi-judicial
functions.84
Second, jurisdiction over the subject matter is determined not by the pleas set up by the defendant in his
answer85but by the allegations in the complaint,86 irrespective of whether the plaintiff is entitled to favorable
judgment on the basis of his assertions.87 The reason is that the complaint is supposed to contain a concise
statement of the ultimate facts constituting the plaintiff's causes of action. 88
Third, jurisdiction is determined by the law in force at the time of the filing of the complaint. 89
Parenthetically, the Court observes that none of the parties ever raised the issue of whether the BSP can
simply disown its jurisdiction, assuming it has, by the simple expedient of promulgating a new circular
(specially applicable to a certificate of indebtedness issued by the BSP itself), inconsistent with an old
circular, assertive of its limited jurisdiction over ownership issues arising from fraudulent assignments of a
certificate of indebtedness. The PDB, in particular, relied solely and heavily on CB Circular No. 28.
In light of the above principles pointing to jurisdiction as a matter of substantive law, the provisions of the
law itself that gave CB Circular 769-80 its life and jurisdiction must be examined.
The Philippine Central Bank
On January 3, 1949, Congress created the Central Bank of the Philippines (Central Bank) as a corporate
body with the primary objective of (i) maintaining the internal and external monetary stability in the
Philippines; and (ii) preserving the international value and the convertibility of the peso. 90 In line with these
broad objectives, the Central Bank was empowered to issue rules and regulations "necessary for the
effective discharge of the responsibilities and exercise of the powers assigned to the Monetary Board and to
the Central Bank."91 Specifically, the Central Bank is authorized to organize (other) departments for the
efficient conduct of its business and whose powers and duties "shall be determined by the Monetary Board,
within the authority granted to the Board and the Central Bank"92 under its original charter.
With the 1973 Constitution, the then Central Bank was constitutionally made as the country’s central
monetary authority until such time that Congress 93 shall have established a central bank. The 1987
Constitution continued to recognize this function of the then Central Bank until Congress, pursuant to the
Constitution, created a new central monetary authority which later came to be known as the Bangko Sentral
ng Pilipinas.
Under the New Central Bank Act (R.A. No. 7653),94 the BSP is given the responsibility of providing policy
directions in the areas of money, banking and credit; it is given, too, the primary objective of maintaining
price stability, conducive to a balanced and sustainable growth of the economy, and of promoting and
maintaining monetary stability and convertibility of the peso.95
The Constitution expressly grants the BSP, as the country’s central monetary authority, the power of
supervision over the operation of banks, while leaving with Congress the authority to define the BSP’s
regulatory powers over the operations of finance companies and other institutions performing similar
functions. Under R.A. No. 7653, the BSP’s powers and functions include (i) supervision over the operation
of banks; (ii) regulation of operations of finance companies and non-bank financial institutions performing
quasi banking functions; (iii) sole power and authority to issue currency within the Philippine territory; (iv)
engaging in foreign exchange transactions; (v) making rediscounts, discounts, loans and advances to
banking and other financial institutions to influence the volume of credit consistent with the objective of
achieving price stability; (vi) engaging in open market operations; and (vii) acting as banker and financial
advisor of the government.1âwphi1
On the BSP’s power of supervision over the operation of banks, Section 4 of R.A. No. 8791 (The General
Banking Law of 2000) elaborates as follows:
CHAPTER II
AUTHORITY OF THE BANGKO SENTRAL
147
SECTION 4. Supervisory Powers. — The operations and activities of banks shall be subject to supervision
of the Bangko Sentral. "Supervision" shall include the following:
4.1. The issuance of rules of conduct or the establishment of standards of operation for uniform
application to all institutions or functions covered, taking into consideration the distinctive
character of the operations of institutions and the substantive similarities of specific functions to
which such rules, modes or standards are to be applied;
4.2. The conduct of examination to determine compliance with laws and regulations if the
circumstances so warrant as determined by the Monetary Board;
4.3. Overseeing to ascertain that laws and regulations are complied with;
4.4. Regular investigation which shall not be oftener than once a year from the last date of
examination to determine whether an institution is conducting its business on a safe or sound basis:
Provided, That the deficiencies/irregularities found by or discovered by an audit shall be
immediately addressed;
4.5. Inquiring into the solvency and liquidity of the institution (2-D); or
4.6. Enforcing prompt corrective action. (n)
The Bangko Sentral shall also have supervision over the operations of and exercise regulatory powers over
quasi-banks, trust entities and other financial institutions which under special laws are subject to Bangko
Sentral supervision. (2-Ca)
For the purposes of this Act, "quasi-banks" shall refer to entities engaged in the borrowing of funds through
the issuance, endorsement or assignment with recourse or acceptance of deposit substitutes as defined in
Section 95 of Republic Act No. 7653 (hereafter the "New Central Bank Act") for purposes of relending or
purchasing of receivables and other obligations. [emphasis ours]
While this provision empowers the BSP to oversee the operations and activities of banks to "ascertain that
laws and regulations are complied with," the existence of the BSP’s jurisdiction in the present dispute
cannot rely on this provision. The fact remains that the BSP already made known to the PDB its unfavorable
position on the latter’s claim of fraudulent assignment due to the latter’s own failure to comply96 with
existing regulations:
In this connection, Section 10 (b) 2 also requires that a "Detached assignment will be recognized or accepted
only upon previous notice to the Central Bank x x x." In fact, in a memo dated September 23, 1991 xxx then
CB Governor Jose L. Cuisia advised all banks (including PDB) xxx as follows:
In view recurring incidents ostensibly disregarding certain provisions of CB circular No. 28 (as amended)
covering assignments of registered bonds, all banks and all concerned are enjoined to observe strictly the
pertinent provisions of said CB Circular as hereunder quoted:
xxxx
Under Section 10.b. (2)
x x x Detached assignment will be recognized or accepted only upon previous notice to the Central Bank
and its use is authorized only under the following circumstances:
(a) x x x
(b) x x x
(c) assignments of treasury notes and certificates of indebtedness in registered form which are not
provided at the back thereof with assignment form.
(d) Assignment of securities which have changed ownership several times.
(e) x x x
Non-compliance herewith will constitute a basis for non-action or withholding of action on
redemption/payment of interest coupons/transfer transactions or denominational exchange that may be
directly affected thereby. [Boldfacing supplied]
Again, the books of the BSP do not show that the supposed assignment of subject CB Bills was ever
recorded in the BSP’s books. [Boldfacing supplied]
However, the PDB faults the BSP for not recording the assignment of the CB bills in the PDB’s favor
despite the fact that the PDB already requested the BSP to record its assignment in the BSP’s books as early
as June 30, 1994.97
The PDB’s claim is not accurate. What the PDB requested the BSP on that date was not the recording of the
assignment of the CB bills in its favor but the annotation of its claim over the CB bills at the time when (i) it
was no longer in possession of the CB bills, having been transferred from one entity to another and (ii) all it
has are the detached assignments, which the PDB has not shown to be compliant with Section 10 (b) 2
above-quoted. Obviously, the PDB cannot insist that the BSP take cognizance of its plaint when the basis of
the BSP’s refusal under existing regulation, which the PDB is bound to observe, is the PDB’s own failure to
comply therewith.
True, the BSP exercises supervisory powers (and regulatory powers) over banks (and quasi banks). The
issue presented before the Court, however, does not concern the BSP’s supervisory power over banks as this
power is understood under the General Banking Law. In fact, there is nothing in the PDB’s petition (even
including the letters it sent to the BSP) that would support the BSP’s jurisdiction outside of CB Circular No.
28, under its power of supervision, over conflicting claims to the proceeds of the CB bills.
BSP has quasi-judicial powers over a
class of cases which does not include
the adjudication of ownership of the
CB bills in question
In United Coconut Planters Bank v. E. Ganzon, Inc., 98 the Court considered the BSP as an administrative
agency,99exercising quasi-judicial functions through its Monetary Board. It held:
A quasi-judicial agency or body is an organ of government other than a court and other than a legislature,
which affects the rights of private parties through either adjudication or rule-making. The very definition of
an administrative agency includes its being vested with quasi-judicial powers. The ever increasing variety of
powers and functions given to administrative agencies recognizes the need for the active intervention of
administrative agencies in matters calling for technical knowledge and speed in countless controversies
which cannot possibly be handled by regular courts. A "quasi-judicial function" is a term which applies to
the action, discretion, etc., of public administrative officers or bodies, who are required to investigate facts,
or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their
official action and to exercise discretion of a judicial nature.
Undoubtedly, the BSP Monetary Board is a quasi-judicial agency exercising quasi-judicial powers or
functions. As aptly observed by the Court of Appeals, the BSP Monetary Board is an independent central
monetary authority and a body corporate with fiscal and administrative autonomy, mandated to provide
policy directions in the areas of money, banking and credit. It has power to issue subpoena, to sue for
contempt those refusing to obey the subpoena without justifiable reason, to administer oaths and compel
presentation of books, records and others, needed in its examination, to impose fines and other sanctions and
to issue cease and desist order. Section 37 of Republic Act No. 7653, in particular, explicitly provides that
the BSP Monetary Board shall exercise its discretion in determining whether administrative sanctions should
be imposed on banks and quasi-banks, which necessarily implies that the BSP Monetary Board must
conduct some form of investigation or hearing regarding the same. [citations omitted]
The BSP is not simply a corporate entity but qualifies as an administrative agency created, pursuant to
constitutional mandate,100 to carry out a particular governmental function.101 To be able to perform its role as
central monetary authority, the Constitution granted it fiscal and administrative autonomy. In general,
administrative agencies exercise powers and/or functions which may be characterized as administrative,
investigatory, regulatory, quasi-legislative, or quasi-judicial, or a mix of these five, as may be conferred by
the Constitution or by statute.102
While the very nature of an administrative agency and the raison d'être for its creation 103 and proliferation
dictate a grant of quasi-judicial power to it, the matters over which it may exercise this power must find
sufficient anchorage on its enabling law, either by express provision or by necessary implication. Once
148
found, the quasi-judicial power partakes of the nature of a limited and special jurisdiction, that is, to hear
and determine a class of cases within its peculiar competence and expertise. In other words, the provisions
of the enabling statute are the yardsticks by which the Court would measure the quantum of quasi-judicial
powers an administrative agency may exercise, as defined in the enabling act of such agency. 104
Scattered provisions in R.A. No. 7653 and R.A. No. 8791, inter alia, exist, conferring jurisdiction on the
BSP on certain matters.105 For instance, under the situations contemplated under Section 36, par. 2 106 (where
a bank or quasi bank persists in carrying on its business in an unlawful or unsafe manner) and Section
37107 (where the bank or its officers willfully violate the bank’s charter or by-laws, or the rules and
regulations issued by the Monetary Board) of R.A. No. 7653, the BSP may place an entity under
receivership and/or liquidation or impose administrative sanctions upon the entity or its officers or directors.
Among its several functions under R.A. No. 7653, the BSP is authorized to engage in open market
operations and thereby "issue, place, buy and sell freely negotiable evidences of indebtedness of the Bangko
Sentral" in the following manner.
SEC. 90. Principles of Open Market Operations. – The open market purchases and sales of securities by the
Bangko Sentral shall be made exclusively in accordance with its primary objective of achieving price
stability.
xxxx
SEC. 92. Issue and Negotiation of Bangko Sentral Obligations. – In order to provide the Bangko Sentral
with effective instruments for open market operations, the Bangko Sentral may, subject to such rules and
regulations as the Monetary Board may prescribe and in accordance with the principles stated in Section 90
of this Act, issue, place, buy and sell freely negotiable evidences of indebtedness of the Bangko Sentral:
Provided, That issuance of such certificates of indebtedness shall be made only in cases of extraordinary
movement in price levels. Said evidences of indebtedness may be issued directly against the international
reserve of the Bangko Sentral or against the securities which it has acquired under the provisions of Section
91 of this Act, or may be issued without relation to specific types of assets of the Bangko Sentral.
The Monetary Board shall determine the interest rates, maturities and other characteristics of said
obligations of the Bangko Sentral, and may, if it deems it advisable, denominate the obligations in gold or
foreign currencies.
Subject to the principles stated in Section 90 of this Act, the evidences of indebtedness of the Bangko
Sentral to which this section refers may be acquired by the Bangko Sentral before their maturity, either
through purchases in the open market or through redemptions at par and by lot if the Bangko Sentral has
reserved the right to make such redemptions. The evidences of indebtedness acquired or redeemed by the
Bangko Sentral shall not be included among its assets, and shall be immediately retired and
cancelled.108 (italics supplied; emphases ours)
The primary objective of the BSP is to maintain price stability. 109 The BSP has a number of monetary policy
instruments at its disposal to promote price stability. To increase or reduce liquidity in the financial system,
the BSP uses open market operations, among others. 110 Open market operation is a monetary tool where the
BSP publicly buys or sells government securities 111 from (or to) banks and financial institutions in order to
expand or contract the supply of money. By controlling the money supply, the BSP is able to exert some
influence on the prices of goods and services and achieve its inflation objectives. 112
Once the issue and/or sale of a security is made, the BSP would necessarily make a determination, in
accordance with its own rules, of the entity entitled to receive the proceeds of the security upon its maturity.
This determination by the BSP is an exercise of its administrative powers 113 under the law as an incident to
its power to prescribe rules and regulations governing open market operations to achieve the "primary
objective of achieving price stability."114As a matter of necessity, too, the same rules and regulations
facilitate transaction with the BSP by providing for an orderly manner of, among others, issuing,
transferring, exchanging and paying securities representing public debt.
Significantly, when competing claims of ownership over the proceeds of the securities it has issued are
brought before it, the law has not given the BSP the quasi-judicial power to resolve these competing claims
as part of its power to engage in open market operations. Nothing in the BSP’s charter confers on the BSP
the jurisdiction or authority to determine this kind of claims, arising out of a subsequent transfer or
assignment of evidence of indebtedness – a matter that appropriately falls within the competence of courts
of general jurisdiction. That the statute withholds this power from the BSP is only consistent with the
fundamental reasons for the creation of a Philippine central bank, that is, to lay down stable monetary policy
and exercise bank supervisory functions. Thus, the BSP’s assumption of jurisdiction over competing claims
cannot find even a stretched-out justification under its corporate powers "to do and perform any and all
things that may be necessary or proper to carry out the purposes" of R.A. No. 7653. 115
To reiterate, open market operation is a monetary policy instrument that the BSP employs, among others, to
regulate the supply of money in the economy to influence the timing, cost and availability of money and
credit, as well as other financial factors, for the purpose of stabilizing the price level. 116 What the law grants
the BSP is a continuing role to shape and carry out the country’s monetary policy – not the authority to
adjudicate competing claims of ownership over the securities it has issued – since this authority would not
fall under the BSP’s purposes under its charter.
While R.A. No. 7653117 empowers the BSP to conduct administrative hearings and render judgment for or
against an entity under its supervisory and regulatory powers and even authorizes the BSP Governor to
"render decisions, or rulings x x x on matters regarding application or enforcement of laws pertaining to
institutions supervised by the BSP and laws pertaining to quasi-banks, as well as regulations, policies or
instructions issued by the Monetary Board," it is precisely the text of the BSP’s own regulation (whose
validity is not here raised as an issue) that points to the BSP’s limited role in case of an allegedly fraudulent
assignment to simply (i) issuing and circularizing a ‘"stop order" against the transfer, exchange, redemption
of the certificate of indebtedness, including the payment of interest coupons, and (ii) withholding action on
the certificate.
A similar conclusion can be drawn from the BSP’s administrative adjudicatory power in cases of "willful
failure or refusal to comply with, or violation of, any banking law or any order, instruction or regulation
issued by the Monetary Board, or any order, instruction or ruling by the Governor." 118 The non-compliance
with the pertinent requirements under CB Circular No. 28, as amended, deprives a party from any right to
demand payment from the BSP.
In other words, the grant of quasi-judicial authority to the BSP cannot possibly extend to situations which do
not call for the exercise by the BSP of its supervisory or regulatory functions over entities within its
jurisdiction.119
The fact alone that the parties involved are banking institutions does not necessarily call for the exercise by
the BSP of its quasi-judicial powers under the law.120
The doctrine of primary jurisdiction
argues against BSP’s purported
authority to adjudicate ownership
issues over the disputed CB bills
Given the preceding discussions, even the PDB’s invocation of the doctrine of primary jurisdiction is
misplaced.
In the exercise of its plenary legislative power, Congress may create administrative agencies endowed with
quasi-legislative and quasi-judicial powers. Necessarily, Congress likewise defines the limits of an agency’s
jurisdiction in the same manner as it defines the jurisdiction of courts. 121 As a result, it may happen that
either a court or an administrative agency has exclusive jurisdiction over a specific matter or both have
concurrent jurisdiction on the same. It may happen, too, that courts and agencies may willingly relinquish
adjudicatory power that is rightfully theirs in favor of the other. One of the instances when a court may
properly defer to the adjudicatory authority of an agency is the applicability of the doctrine of primary
jurisdiction.122
As early as 1954, the Court applied the doctrine of primary jurisdiction under the following terms:
149
6. In the fifties, the Court taking cognizance of the move to vest jurisdiction in administrative commissions
and boards the power to resolve specialized disputes xxx ruled that Congress in requiring the Industrial
Court's intervention in the resolution of labor-management controversies xxx meant such jurisdiction to be
exclusive, although it did not so expressly state in the law. The Court held that under the "sense-making and
expeditious doctrine of primary jurisdiction ... the courts cannot or will not determine a controversy
involving a question which is within the jurisdiction of an administrative tribunal, where the question
demands the exercise of sound administrative discretion requiring the special knowledge, experience, and
services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity
of ruling is essential to comply with the purposes of the regulatory statute administered." 123 (emphasis ours)
In Industrial Enterprises, Inc. v. Court of Appeals,124 the Court ruled that while an action for rescission of a
contract between coal developers appears to be an action cognizable by regular courts, the trial court
remains to be without jurisdiction to entertain the suit since the contract sought to be rescinded is
"inextricably tied up with the right to develop coal-bearing lands and the determination of whether or not the
reversion of the coal operating contract over the subject coal blocks to [the plaintiff] would be in line with
the country’s national program and objective on coal-development and over-all coal-supply-demand
balance." It then applied the doctrine of primary jurisdiction –
In recent years, it has been the jurisprudential trend to apply the doctrine of primary jurisdiction in many
cases involving matters that demand the special competence of administrative agencies. It may occur that
the Court has jurisdiction to take cognizance of a particular case, which means that the matter involved is
also judicial in character. However, if the case is such that its determination requires the expertise,
specialized skills and knowledge of the proper administrative bodies because technical matters or intricate
questions of facts are involved, then relief must first be obtained in an administrative proceeding before a
remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court.
This is the doctrine of primary jurisdiction. It applies "where a claim is originally cognizable in the courts,
and comes into play whenever enforcement of the claim requires the resolution of issues which, under a
regulatory scheme, have been placed within the special competence of an administrative body."
Clearly, the doctrine of primary jurisdiction finds application in this case since the question of what coal
areas should be exploited and developed and which entity should be granted coal operating contracts over
said areas involves a technical determination by the Bureau of Energy Development as the administrative
agency in possession of the specialized expertise to act on the matter. The Trial Court does not have the
competence to decide matters concerning activities relative to the exploration, exploitation, development
and extraction of mineral resources like coal. These issues preclude an initial judicial determination.
[emphases ours]
The absence of any express or implied statutory power to adjudicate conflicting claims of ownership or
entitlement to the proceeds of its certificates of indebtedness finds complement in the similar absence of any
technical matter that would call for the BSP’s special expertise or competence.125 In fact, what the PDB’s
petitions bear out is essentially the nature of the transaction it had with the subsequent transferees of the
subject CB bills (BOC and Bancap) and not any matter more appropriate for special determination by the
BSP or any administrative agency.
In a similar vein, it is well-settled that the interpretation given to a rule or regulation by those charged with
its execution is entitled to the greatest weight by the courts construing such rule or regulation.126 While there
are exceptions127 to this rule, the PDB has not convinced us that a departure is warranted in this case. Given
the non-applicability of the doctrine of primary jurisdiction, the BSP’s own position, in light of Circular No.
769-80, deserves respect from the Court.
Ordinarily, cases involving the application of doctrine of primary jurisdiction are initiated by an action
invoking the jurisdiction of a court or administrative agency to resolve the substantive legal conflict between
the parties. In this sense, the present case is quite unique since the court’s jurisdiction was, originally,
invoked to compel an administrative agency (the BSP) to resolve the legal conflict of ownership over the CB
bills - instead of obtaining a judicial determination of the same dispute.
The remedy of interpleader
Based on the unique factual premise of the present case, the RTC acted correctly in initially assuming
jurisdiction over the PDB’s petition for mandamus, prohibition and injunction. 128 While the RTC agreed
(albeit erroneously) with the PDB’s view (that the BSP has jurisdiction), it, however, dismissed not only the
BOC’s/the BSP’s counterclaims but the PDB’s petition itself as well, on the ground that it lacks jurisdiction.
This is plain error.
Not only the parties themselves, but more so the courts, are bound by the rule on non-waiver of
jurisdiction.129believes that jurisdiction over the BOC’s counterclaims and the BSP’s
counterclaim/crossclaim for interpleader calls for the application of the doctrine of primary jurisdiction, the
allowance of the PDB’s petition even becomes imperative because courts may raise the issue of primary
jurisdiction sua sponte.130
Of the three possible options available to the RTC, the adoption of either of these two would lead the trial
court into serious legal error: first, if it granted the PDB’s petition, its decision would have to be set aside on
appeal because the BSP has no jurisdiction as previously discussed; and second when it dismissed the
PDB’s petitions and the BOC’s counterclaims on the ground that it lacks jurisdiction, the trial court
seriously erred because precisely, the resolution of the conflicting claims over the CB bills falls within its
general jurisdiction.
Without emasculating its jurisdiction, the RTC could have properly dismissed the PDB’s petition but on the
ground that mandamus does not lie against the BSP; but even this correct alternative is no longer plausible
since the BSP, as a respondent below, already properly brought before the RTC the remaining conflicting
claims over the subject CB bills by way of a counterclaim/crossclaim for interpleader. Section 1, Rule 62 of
the Rules of Court provides when an interpleader is proper:
SECTION 1. When interpleader proper. – Whenever conflicting claims upon the same subject matter are or
may be made against a person who claims no interest whatever in the subject matter, or an interest which in
whole or in part is not disputed by the claimants, he may bring an action against the conflicting claimants to
compel them to interplead and litigate their several claims among themselves.
The remedy of an action of interpleader131 is designed to protect a person against double vexation in respect
of a single liability.7 It requires, as an indispensable requisite, that conflicting claims upon the same subject
matter are or may be made against the stakeholder (the possessor of the subject matter) who claims no
interest whatever in the subject matter or an interest which in whole or in part is not disputed by the
claimants.132
Through this remedy, the stakeholder can join all competing claimants in a single proceeding to determine
conflicting claims without exposing the stakeholder to the possibility of having to pay more than once on a
single liability.133
When the court orders that the claimants litigate among themselves, in reality a new action arises, 134 where
the claims of the interpleaders themselves are brought to the fore, the stakeholder as plaintiff is relegated
merely to the role of initiating the suit. In short, the remedy of interpleader, when proper, merely provides an
avenue for the conflicting claims on the same subject matter to be threshed out in an action. Section 2 of
Rule 62 provides:
SEC. 2. Order. – Upon the filing of the complaint, the court shall issue an order requiring the conflicting
claimants to interplead with one another. If the interests of justice so require, the court may direct in such
order that the subject matter be paid or delivered to the court.
This is precisely what the RTC did by granting the BSP’s motion to interplead. The PDB itself "agreed that
the various claimants should now interplead." Thus, the PDB and the BOC subsequently entered into two
separate escrow agreements, covering the CB bills, and submitted them to the RTC for approval.
In granting the BSP’s motion, the RTC acted on the correct premise that it has jurisdiction to resolve the
parties’ conflicting claims over the CB bills - consistent with the rules and the parties’ conduct - and
accordingly required the BOC to amend its answer and for the PDB to comment thereon. Suddenly,
however, the PDB made an about-face and questioned the jurisdiction of the RTC. Swayed by the PDB’s
150
argument, the RTC dismissed even the PDB’s petition - which means that it did not actually compel the BSP
to resolve the BOC’s and the PDB’s claims.
Without the motion to interplead and the order granting it, the RTC could only dismiss the PDB’s petition
since it is the RTC which has jurisdiction to resolve the parties’ conflicting claims – not the BSP. Given that
the motion to interplead has been actually filed, the RTC could not have really granted the relief originally
sought in the PDB’s petition since the RTC’s order granting the BSP’s motion to interplead - to which the
PDB in fact acquiesced into - effectively resulted in the dismissal of the PDB’s petition. This is not altered
by the fact that the PDB additionally prayed in its petition for damages, attorney’s fees and costs of suit
"against the public respondents" because the grant of the order to interplead effectively sustained the
propriety of the BSP’s resort to this procedural device.
Interpleader
1. as a special civil action
What is quite unique in this case is that the BSP did not initiate the interpleader suit through an original
complaint but through its Answer. This circumstance becomes understandable if it is considered that insofar
as the BSP is concerned, the PDB does not possess any right to have its claim recorded in the BSP’s books;
consequently, the PDB cannot properly be considered even as a potential claimant to the proceeds of the CB
bills upon maturity. Thus, the interpleader was only an alternative position, made only in the BSP’s
Answer.135
The remedy of interpleader, as a special civil action, is primarily governed by the specific provisions in Rule
62 of the Rules of Court and secondarily by the provisions applicable to ordinary civil actions. 136 Indeed,
Rule 62 does not expressly authorize the filing of a complaint-in-interpleader as part of, although separate
and independent from, the answer. Similarly, Section 5, Rule 6, in relation to Section 1, Rule 9 of the Rules
of Court137 does not include a complaint-in-interpleader as a claim,138 a form of defense,139 or as an objection
that a defendant may be allowed to put up in his answer or in a motion to dismiss. This does not mean,
however, that the BSP’s "counter-complaint/cross-claim for interpleader" runs counter to general
procedures.
Apart from a pleading,140 the rules141 allow a party to seek an affirmative relief from the court through the
procedural device of a motion. While captioned "Answer with counter complaint/cross-claim for
interpleader," the RTC understood this as in the nature of a motion, 142 seeking relief which essentially
consists in an order for the conflicting claimants to litigate with each other so that "payment is made to the
rightful or legitimate owner"143 of the subject CB bills.
The rules define a "civil action" as "one by which a party sues another for the enforcement or protection of a
right, or the prevention or redress of a wrong." Interpleader may be considered as a stakeholder’s remedy to
prevent a wrong, that is, from making payment to one not entitled to it, thereby rendering itself vulnerable to
lawsuit/s from those legally entitled to payment.
Interpleader is a civil action made special by the existence of particular rules to govern the uniqueness of its
application and operation. Under Section 2, Rule 6 of the Rules of Court, governing ordinary civil actions, a
party’s claim is asserted "in a complaint, counterclaim, cross-claim, third (fourth, etc.)-party complaint, or
complaint-in-intervention." In an interpleader suit, however, a claim is not required to be contained in any of
these pleadings but in the answer-(of the conflicting claimants)-in-interpleader. This claim is different from
the counter-claim (or cross-claim, third party-complaint) which is separately allowed under Section 5, par. 2
of Rule 62.
2. the payment of docket fees covering BOC’s counterclaim
The PDB argues that, even assuming that the RTC has jurisdiction over the issue of ownership of the CB
bills, the BOC’s failure to pay the appropriate docket fees prevents the RTC from acquiring jurisdiction over
the BOC’s "counterclaims."
We disagree with the PDB.
To reiterate and recall, the order granting the "PDB’s motion to interplead," already resulted in the dismissal
of the PDB’s petition. The same order required the BOC to amend its answer and for the conflicting
claimants to comment, presumably to conform to the nature of an answer-in interpleader. Perhaps, by reason This must be the rule considering that Section 7, Rule 62 of which reads:
of the BOC’s denomination of its claim as a "compulsory counterclaim" and the PDB’s failure to fully SEC. 7. Docket and other lawful fees, costs and litigation expenses as liens. – The docket and other lawful
appreciate the RTC’s order granting the "BSP’s motion for interpleader" (with the PDB’s conformity), the fees paid by the party who filed a complaint under this Rule, as well as the costs and litigation expenses,
PDB mistakenly treated the BOC’s claim as a "permissive counterclaim" which necessitates the payment of shall constitute a lien or charge upon the subject matter of the action, unless the court shall order otherwise.
docket fees. only pertain to the docket and lawful fees to be paid by the one who initiated the interpleader suit, and who,
As the preceding discussions would show, however, the BOC’s "claim" - i.e., its assertion of ownership over under the Rules, actually "claims no interest whatever in the subject matter." By constituting a lien on the
the CB bills – is in reality just that, a "claim" against the stakeholder and not as a "counterclaim," 144 whether subject matter of the action, Section 7 in effect only aims to actually compensate the complainant-in-
compulsory145or permissive. It is only the BOC’s alternative prayer (for the PDB to deliver to the BOC, as interpleader, who happens to be the stakeholder unfortunate enough to get caught in a legal crossfire
the buyer in the April 15 transaction and the ultimate successor-in-interest of the buyer in the April 19 between two or more conflicting claimants, for the faultless trouble it found itself into. Since the defendants-
transaction, either the original subjects of the sales or the value thereof plus whatever income that may have in-interpleader are actually the ones who make a claim - only that it was extraordinarily done through the
been earned pendente lite) and its prayer for damages that are obviously compulsory counterclaims against procedural device of interpleader - then to them devolves the duty to pay the docket fees prescribed under
the PDB and, therefore, does not require payment of docket fees. 146 Rule 141 of the Rules of Court, as amended.151
The PDB takes a contrary position through its insistence that a compulsory counterclaim should be one The importance of paying the correct amount of docket fee cannot be overemphasized:
where the presence of third parties, of whom the court cannot acquire jurisdiction, is not required. It reasons The matter of payment of docket fees is not a mere triviality. These fees are necessary to defray court
out that since the RCBC and All Asia (the intervening holders of the CB bills) have already been dropped expenses in the handling of cases. Consequently, in order to avoid tremendous losses to the judiciary, and to
from the case, then the BOC’s counterclaim must only be permissive in nature and the BOC should have the government as well, the payment of docket fees cannot be made dependent on the outcome of the case,
paid the correct docket fees. except when the claimant is a pauper-litigant.152
We see no reason to belabor this claim. Even if we gloss over the PDB’s own conformity to the dropping of WHEREFORE, premises considered the consolidated PETITIONS are GRANTED. The Planters
these entities as parties, the BOC correctly argues that a remedy is provided under the Rules. Section 12, Development Bank is hereby REQUIRED to file with the Regional Trial Court its comment or answer-in-
Rule 6 of the Rules of Court reads: interpleader to Bank of Commerce’s Amended Consolidated Answer with Compulsory Counterclaim, as
SEC. 12. Bringing new parties. – When the presence of parties other than those to the original action is previously ordered by the Regional Trial Court. The Regional Trial Court of Makati City, Branch 143, is
required for the granting of complete relief in the determination of a counterclaim or cross-claim, the court hereby ORDERED to assess the docket fees due from Planters Development Bank and Bank of Commerce
shall order them to be brought in as defendants, if jurisdiction over them can be obtained. and order their payment, and to resolve with DELIBERATE DISPATCH the parties’ conflicting claims of
Even then, the strict characterization of the BOC’s counterclaim is no longer material in disposing of the ownership over the proceeds of the Central Bank bills.
PDB’s argument based on non-payment of docket fees. The Clerk of Court of the Regional Trial Court of Makati City, Branch 143, or his duly authorized
When an action is filed in court, the complaint must be accompanied by the payment of the requisite docket representative is hereby ORDERED to assess and collect the appropriate amount of docket fees separately
and filing fees by the party seeking affirmative relief from the court. It is the filing of the complaint or due the Bank of Commerce and Planters Development Bank as conflicting claimants in Bangko Sentral ng
appropriate initiatory pleading, accompanied by the payment of the prescribed docket fee, that vests a trial Pilipinas’ interpleader suit, in accordance with this decision.
court with jurisdiction over the claim or the nature of the action.147 However, the non-payment of the docket SO ORDERED.
fee at the time of filing does not automatically cause the dismissal of the case, so long as the fee is paid
within the applicable prescriptive or reglementary period, especially when the claimant demonstrates a
willingness to abide by the rules prescribing such payment. 148
In the present case, considering the lack of a clear guideline on the payment of docket fee by the claimants
in an interpleader suit, compounded by the unusual manner in which the interpleader suit was initiated and
the circumstances surrounding it, we surely cannot deduce from the BOC’s mere failure to specify in its
prayer the total amount of the CB bills it lays claim to (or the value of the subjects of the sales in the April
15 and April 19 transactions, in its alternative prayer) an intention to defraud the government that would
warrant the dismissal of its claim.149
At any rate, regardless of the nature of the BOC’s "counterclaims," for purposes of payment of filing fees,
both the BOC and the PDB, properly as defendants-in-interpleader, must be assessed the payment of the
correct docket fee arising from their respective claims. The seminal case of Sun Insurance Office, Ltd. v.
Judge Asuncion150 provides us guidance in the payment of docket fees, to wit:
1. x x x Where the filing of the initiatory pleading is not accompanied by payment of the docket
fee, the court may allow payment of the fee within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings,
which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The
court may also allow payment of said fee within a reasonable time but also in no case beyond its
applicable prescriptive or reglementary period. [underscoring ours]

151
 THIRD DIVISION
G.R. No. 150806 January 28, 2008
EUFEMIA ALMEDA and ROMEL ALMEDA, petitioners,
vs.
BATHALA MARKETING INDUSTRIES, INC., respondent.
DECISION
NACHURA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, of the Decision1 of the
Court of Appeals (CA), dated September 3, 2001, in CA-G.R. CV No. 67784, and its Resolution2 dated
November 19, 2001. The assailed Decision affirmed with modification the Decision 3 of the Regional Trial
Court (RTC), Makati City, Branch 136, dated May 9, 2000 in Civil Case No. 98-411.
Sometime in May 1997, respondent Bathala Marketing Industries, Inc., as lessee, represented by its
president Ramon H. Garcia, renewed its Contract of Lease4 with Ponciano L. Almeda (Ponciano), as lessor,
husband of petitioner Eufemia and father of petitioner Romel Almeda. Under the said contract, Ponciano
agreed to lease a portion of the Almeda Compound, located at 2208 Pasong Tamo Street, Makati City,
consisting of 7,348.25 square meters, for a monthly rental of P1,107,348.69, for a term of four (4) years
from May 1, 1997 unless sooner terminated as provided in the contract. 5 The contract of lease contained the
following pertinent provisions which gave rise to the instant case:
SIXTH - It is expressly understood by the parties hereto that the rental rate stipulated is based on
the present rate of assessment on the property, and that in case the assessment should hereafter be
increased or any new tax, charge or burden be imposed by authorities on the lot and building where
the leased premises are located, LESSEE shall pay, when the rental herein provided becomes due,
the additional rental or charge corresponding to the portion hereby leased; provided, however, that
in the event that the present assessment or tax on said property should be reduced, LESSEE shall
be entitled to reduction in the stipulated rental, likewise in proportion to the portion leased by him;
SEVENTH - In case an extraordinary inflation or devaluation of Philippine Currency should
supervene, the value of Philippine peso at the time of the establishment of the obligation shall be
the basis of payment;6
During the effectivity of the contract, Ponciano died. Thereafter, respondent dealt with petitioners. In a
letter7 dated December 29, 1997, petitioners advised respondent that the former shall assess and collect
Value Added Tax (VAT) on its monthly rentals. In response, respondent contended that VAT may not be
imposed as the rentals fixed in the contract of lease were supposed to include the VAT therein, considering
that their contract was executed on May 1, 1997 when the VAT law had long been in effect.8
On January 26, 1998, respondent received another letter from petitioners informing the former that its
monthly rental should be increased by 73% pursuant to condition No. 7 of the contract and Article 1250 of
the Civil Code. Respondent opposed petitioners' demand and insisted that there was no extraordinary
inflation to warrant the application of Article 1250 in light of the pronouncement of this Court in various
cases.9
Respondent refused to pay the VAT and adjusted rentals as demanded by petitioners but continued to pay
the stipulated amount set forth in their contract.
On February 18, 1998, respondent instituted an action for declaratory relief for purposes of determining the
correct interpretation of condition Nos. 6 and 7 of the lease contract to prevent damage and prejudice. 10 The
case was docketed as Civil Case No. 98-411 before the RTC of Makati.
On March 10, 1998, petitioners in turn filed an action for ejectment, rescission and damages against
respondent for failure of the latter to vacate the premises after the demand made by the former. 11 Before
respondent could file an answer, petitioners filed a Notice of Dismissal. 12 They subsequently refiled the
complaint before the Metropolitan Trial Court of Makati; the case was raffled to Branch 139 and was
docketed as Civil Case No. 53596.
152
Petitioners later moved for the dismissal of the declaratory relief case for being an improper remedy
considering that respondent was already in breach of the obligation and that the case would not end the
litigation and settle the rights of the parties. The trial court, however, was not persuaded, and consequently,
denied the motion.
After trial on the merits, on May 9, 2000, the RTC ruled in favor of respondent and against petitioners. The
pertinent portion of the decision reads:
WHEREFORE, premises considered, this Court renders judgment on the case as follows:
1) declaring that plaintiff is not liable for the payment of Value-Added Tax (VAT) of 10% of the
rent for [the] use of the leased premises;
2) declaring that plaintiff is not liable for the payment of any rental adjustment, there being no
[extraordinary] inflation or devaluation, as provided in the Seventh Condition of the lease contract,
to justify the same;
3) holding defendants liable to plaintiff for the total amount of P1,119,102.19, said amount
representing payments erroneously made by plaintiff as VAT charges and rental adjustment for the
months of January, February and March, 1999; and
4) holding defendants liable to plaintiff for the amount of P1,107,348.69, said amount representing
the balance of plaintiff's rental deposit still with defendants.
SO ORDERED.13
The trial court denied petitioners their right to pass on to respondent the burden of paying the VAT since it
was not a new tax that would call for the application of the sixth clause of the contract. The court, likewise,
denied their right to collect the demanded increase in rental, there being no extraordinary inflation or
devaluation as provided for in the seventh clause of the contract. Because of the payment made by
respondent of the rental adjustment demanded by petitioners, the court ordered the restitution by the latter to
the former of the amounts paid, notwithstanding the well-established rule that in an action for declaratory
relief, other than a declaration of rights and obligations, affirmative reliefs are not sought by or awarded to
the parties.
Petitioners elevated the aforesaid case to the Court of Appeals which affirmed with modification the RTC
decision. The fallo reads:
WHEREFORE, premises considered, the present appeal is DISMISSED and the appealed decision
in Civil Case No. 98-411 is hereby AFFIRMED with MODIFICATION in that the order for the
return of the balance of the rental deposits and of the amounts representing the 10% VAT and
rental adjustment, is hereby DELETED.
No pronouncement as to costs.
SO ORDERED.14
The appellate court agreed with the conclusions of law and the application of the decisional rules on the
matter made by the RTC. However, it found that the trial court exceeded its jurisdiction in granting
affirmative relief to the respondent, particularly the restitution of its excess payment.
Petitioners now come before this Court raising the following issues:
I.
WHETHER OR NOT ARTICLE 1250 OF THE NEW CIVIL CODE IS APPLICABLE TO THE
CASE AT BAR.
II.
WHETHER OR NOT THE DOCTRINE ENUNCIATED IN FILIPINO PIPE AND FOUNDRY
CORP. VS. NAWASA CASE, 161 SCRA 32 AND COMPANION CASES ARE (sic)
APPLICABLE IN THE CASE AT BAR.
III.
WHETHER OR NOT IN NOT APPLYING THE DOCTRINE IN THE CASE OF DEL
ROSARIO VS. THE SHELL COMPANY OF THE PHILIPPINES, 164 SCRA 562, THE
HONORABLE COURT OF APPEALS SERIOUSLY ERRED ON A QUESTION OF LAW.
 IV.
WHETHER OR NOT THE FINDING OF THE HONORABLE COURT OF APPEALS THAT
RESPONDENT IS NOT LIABLE TO PAY THE 10% VALUE ADDED TAX IS IN
ACCORDANCE WITH THE MANDATE OF RA 7716.
V.
WHETHER OR NOT DECLARATORY RELIEF IS PROPER SINCE PLAINTIFF-APPELLEE
WAS IN BREACH WHEN THE PETITION FOR DECLARATORY RELIEF WAS FILED
BEFORE THE TRIAL COURT.
In fine, the issues for our resolution are as follows: 1) whether the action for declaratory relief is proper; 2)
whether respondent is liable to pay 10% VAT pursuant to Republic Act (RA) 7716; and 3) whether the
amount of rentals due the petitioners should be adjusted by reason of extraordinary inflation or devaluation.
Declaratory relief is defined as an action by any person interested in a deed, will, contract or other written
instrument, executive order or resolution, to determine any question of construction or validity arising from
the instrument, executive order or regulation, or statute, and for a declaration of his rights and duties
thereunder. The only issue that may be raised in such a petition is the question of construction or validity of
provisions in an instrument or statute. Corollary is the general rule that such an action must be justified, as
no other adequate relief or remedy is available under the circumstances. 15
Decisional law enumerates the requisites of an action for declaratory relief, as follows: 1) the subject matter
of the controversy must be a deed, will, contract or other written instrument, statute, executive order or
regulation, or ordinance; 2) the terms of said documents and the validity thereof are doubtful and require
judicial construction; 3) there must have been no breach of the documents in question; 4) there must be an
actual justiciable controversy or the "ripening seeds" of one between persons whose interests are adverse; 5)
the issue must be ripe for judicial determination; and 6) adequate relief is not available through other means
or other forms of action or proceeding.16
It is beyond cavil that the foregoing requisites are present in the instant case, except that petitioners insist
that respondent was already in breach of the contract when the petition was filed.
We do not agree.
After petitioners demanded payment of adjusted rentals and in the months that followed, respondent
complied with the terms and conditions set forth in their contract of lease by paying the rentals stipulated
therein. Respondent religiously fulfilled its obligations to petitioners even during the pendency of the
present suit. There is no showing that respondent committed an act constituting a breach of the subject
contract of lease. Thus, respondent is not barred from instituting before the trial court the petition for
declaratory relief.
Petitioners claim that the instant petition is not proper because a separate action for rescission, ejectment and
damages had been commenced before another court; thus, the construction of the subject contractual
provisions should be ventilated in the same forum.
We are not convinced.
It is true that in Panganiban v. Pilipinas Shell Petroleum Corporation 17 we held that the petition for
declaratory relief should be dismissed in view of the pendency of a separate action for unlawful detainer.
However, we cannot apply the same ruling to the instant case. In Panganiban, the unlawful detainer case
had already been resolved by the trial court before the dismissal of the declaratory relief case; and it was
petitioner in that case who insisted that the action for declaratory relief be preferred over the action for
unlawful detainer. Conversely, in the case at bench, the trial court had not yet resolved the
rescission/ejectment case during the pendency of the declaratory relief petition. In fact, the trial court, where
the rescission case was on appeal, itself initiated the suspension of the proceedings pending the resolution of
the action for declaratory relief.
We are not unmindful of the doctrine enunciated in Teodoro, Jr. v. Mirasol18 where the declaratory relief
action was dismissed because the issue therein could be threshed out in the unlawful detainer suit. Yet,
153
again, in that case, there was already a breach of contract at the time of the filing of the declaratory relief
petition. This dissimilar factual milieu proscribes the Court from applying Teodoro to the instant case.
Given all these attendant circumstances, the Court is disposed to entertain the instant declaratory relief
action instead of dismissing it, notwithstanding the pendency of the ejectment/rescission case before the trial
court. The resolution of the present petition would write finis to the parties' dispute, as it would settle once
and for all the question of the proper interpretation of the two contractual stipulations subject of this
controversy.
Now, on the substantive law issues.
Petitioners repeatedly made a demand on respondent for the payment of VAT and for rental adjustment
allegedly brought about by extraordinary inflation or devaluation. Both the trial court and the appellate court
found no merit in petitioners' claim. We see no reason to depart from such findings.
As to the liability of respondent for the payment of VAT, we cite with approval the ratiocination of the
appellate court, viz.:
Clearly, the person primarily liable for the payment of VAT is the lessor who may choose to pass it
on to the lessee or absorb the same. Beginning January 1, 1996, the lease of real property in the
ordinary course of business, whether for commercial or residential use, when the gross annual
receipts exceed P500,000.00, is subject to 10% VAT. Notwithstanding the mandatory payment of
the 10% VAT by the lessor, the actual shifting of the said tax burden upon the lessee is clearly
optional on the part of the lessor, under the terms of the statute. The word "may" in the statute,
generally speaking, denotes that it is directory in nature. It is generally permissive only and
operates to confer discretion. In this case, despite the applicability of the rule under Sec. 99 of the
NIRC, as amended by R.A. 7716, granting the lessor the option to pass on to the lessee the 10%
VAT, to existing contracts of lease as of January 1, 1996, the original lessor, Ponciano L. Almeda
did not charge the lessee-appellee the 10% VAT nor provided for its additional imposition when
they renewed the contract of lease in May 1997. More significantly, said lessor did not actually
collect a 10% VAT on the monthly rental due from the lessee-appellee after the execution of the
May 1997 contract of lease. The inevitable implication is that the lessor intended not to avail of the
option granted him by law to shift the 10% VAT upon the lessee-appellee. x x x.19
In short, petitioners are estopped from shifting to respondent the burden of paying the VAT.
Petitioners' reliance on the sixth condition of the contract is, likewise, unavailing. This provision clearly
states that respondent can only be held liable for new taxes imposed after the effectivity of the contract of
lease, that is, after May 1997, and only if they pertain to the lot and the building where the leased premises
are located. Considering that RA 7716 took effect in 1994, the VAT cannot be considered as a "new tax" in
May 1997, as to fall within the coverage of the sixth stipulation.
Neither can petitioners legitimately demand rental adjustment because of extraordinary inflation or
devaluation.
Petitioners contend that Article 1250 of the Civil Code does not apply to this case because the contract
stipulation speaks of extraordinary inflation or devaluation while the Code speaks of extraordinary inflation
or deflation. They insist that the doctrine pronounced in Del Rosario v. The Shell Company, Phils.
Limited20 should apply.
Essential to contract construction is the ascertainment of the intention of the contracting parties, and such
determination must take into account the contemporaneous and subsequent acts of the parties. This
intention, once ascertained, is deemed an integral part of the contract.21
While, indeed, condition No. 7 of the contract speaks of "extraordinary inflation or devaluation" as
compared to Article 1250's "extraordinary inflation or deflation," we find that when the parties used the term
"devaluation," they really did not intend to depart from Article 1250 of the Civil Code. Condition No. 7 of
the contract should, thus, be read in harmony with the Civil Code provision.
That this is the intention of the parties is evident from petitioners' letter 22 dated January 26, 1998, where, in
demanding rental adjustment ostensibly based on condition No. 7, petitioners made explicit reference to
Article 1250 of the Civil Code, even quoting the law verbatim. Thus, the application of Del Rosario is not
warranted. Rather, jurisprudential rules on the application of Article 1250 should be considered.
Article 1250 of the Civil Code states:
In case an extraordinary inflation or deflation of the currency stipulated should supervene, the
value of the currency at the time of the establishment of the obligation shall be the basis of
payment, unless there is an agreement to the contrary.
Inflation has been defined as the sharp increase of money or credit, or both, without a corresponding
increase in business transaction. There is inflation when there is an increase in the volume of money and
credit relative to available goods, resulting in a substantial and continuing rise in the general price level.23 In
a number of cases, this Court had provided a discourse on what constitutes extraordinary inflation, thus:
[E]xtraordinary inflation exists when there is a decrease or increase in the purchasing power of the
Philippine currency which is unusual or beyond the common fluctuation in the value of said
currency, and such increase or decrease could not have been reasonably foreseen or was manifestly
beyond the contemplation of the parties at the time of the establishment of the obligation. 24
The factual circumstances obtaining in the present case do not make out a case of extraordinary inflation or
devaluation as would justify the application of Article 1250 of the Civil Code. We would like to stress that
the erosion of the value of the Philippine peso in the past three or four decades, starting in the mid-sixties, is
characteristic of most currencies. And while the Court may take judicial notice of the decline in the
purchasing power of the Philippine currency in that span of time, such downward trend of the peso cannot
be considered as the extraordinary phenomenon contemplated by Article 1250 of the Civil Code.
Furthermore, absent an official pronouncement or declaration by competent authorities of the existence of
extraordinary inflation during a given period, the effects of extraordinary inflation are not to be applied. 25
WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals in CA-
G.R. CV No. 67784, dated September 3, 2001, and its Resolution dated November 19, 2001,
are AFFIRMED.
SO ORDERED.

154
 FIRST DIVISION
G.R. No. 154380 October 5, 2005
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
CIPRIANO ORBECIDO III, Respondent.
DECISION
QUISUMBING, J.:
Given a valid marriage between two Filipino citizens, where one party is later naturalized as a foreign
citizen and obtains a valid divorce decree capacitating him or her to remarry, can the Filipino spouse
likewise remarry under Philippine law?
Before us is a case of first impression that behooves the Court to make a definite ruling on this apparently
novel question, presented as a pure question of law.
In this petition for review, the Solicitor General assails the Decision1 dated May 15, 2002, of the Regional
Trial Court of Molave, Zamboanga del Sur, Branch 23 and its Resolution2 dated July 4, 2002 denying the
motion for reconsideration. The court a quo had declared that herein respondent Cipriano Orbecido III is
capacitated to remarry. The fallo of the impugned Decision reads:
WHEREFORE, by virtue of the provision of the second paragraph of Art. 26 of the Family Code and by
reason of the divorce decree obtained against him by his American wife, the petitioner is given the capacity
to remarry under the Philippine Law.
IT IS SO ORDERED.3
The factual antecedents, as narrated by the trial court, are as follows.
On May 24, 1981, Cipriano Orbecido III married Lady Myros M. Villanueva at the United Church of Christ
in the Philippines in Lam-an, Ozamis City. Their marriage was blessed with a son and a daughter, Kristoffer
Simbortriz V. Orbecido and Lady Kimberly V. Orbecido.
In 1986, Cipriano’s wife left for the United States bringing along their son Kristoffer. A few years later,
Cipriano discovered that his wife had been naturalized as an American citizen.
Sometime in 2000, Cipriano learned from his son that his wife had obtained a divorce decree and then
married a certain Innocent Stanley. She, Stanley and her child by him currently live at 5566 A. Walnut
Grove Avenue, San Gabriel, California.
Cipriano thereafter filed with the trial court a petition for authority to remarry invoking Paragraph 2 of
Article 26 of the Family Code. No opposition was filed. Finding merit in the petition, the court granted the
same. The Republic, herein petitioner, through the Office of the Solicitor General (OSG), sought
reconsideration but it was denied.
In this petition, the OSG raises a pure question of law:
WHETHER OR NOT RESPONDENT CAN REMARRY UNDER ARTICLE 26 OF THE FAMILY
CODE4
The OSG contends that Paragraph 2 of Article 26 of the Family Code is not applicable to the instant case
because it only applies to a valid mixed marriage; that is, a marriage celebrated between a Filipino citizen
and an alien. The proper remedy, according to the OSG, is to file a petition for annulment or for legal
separation.5 Furthermore, the OSG argues there is no law that governs respondent’s situation. The OSG
posits that this is a matter of legislation and not of judicial determination. 6
For his part, respondent admits that Article 26 is not directly applicable to his case but insists that when his
naturalized alien wife obtained a divorce decree which capacitated her to remarry, he is likewise capacitated
by operation of law pursuant to Section 12, Article II of the Constitution. 7
At the outset, we note that the petition for authority to remarry filed before the trial court actually constituted
a petition for declaratory relief. In this connection, Section 1, Rule 63 of the Rules of Court provides:
RULE 63
DECLARATORY RELIEF AND SIMILAR REMEDIES
155
Section 1. Who may file petition—Any person interested under a deed, will, contract or other written
instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or other
governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional
Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or
duties, thereunder.
...
The requisites of a petition for declaratory relief are: (1) there must be a justiciable controversy; (2) the
controversy must be between persons whose interests are adverse; (3) that the party seeking the relief has a
legal interest in the controversy; and (4) that the issue is ripe for judicial determination. 8
This case concerns the applicability of Paragraph 2 of Article 26 to a marriage between two Filipino citizens
where one later acquired alien citizenship, obtained a divorce decree, and remarried while in the U.S.A. The
interests of the parties are also adverse, as petitioner representing the State asserts its duty to protect the
institution of marriage while respondent, a private citizen, insists on a declaration of his capacity to remarry.
Respondent, praying for relief, has legal interest in the controversy. The issue raised is also ripe for judicial
determination inasmuch as when respondent remarries, litigation ensues and puts into question the validity
of his second marriage.
Coming now to the substantive issue, does Paragraph 2 of Article 26 of the Family Code apply to the case of
respondent? Necessarily, we must dwell on how this provision had come about in the first place, and what
was the intent of the legislators in its enactment?
Brief Historical Background
On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise known
as the "Family Code," which took effect on August 3, 1988. Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited
under Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was
likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. A second paragraph was
added to Article 26. As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there as such, shall also be valid in this country, except those
prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall have capacity to remarry under Philippine law. (Emphasis supplied)
On its face, the foregoing provision does not appear to govern the situation presented by the case at hand. It
seems to apply only to cases where at the time of the celebration of the marriage, the parties are a Filipino
citizen and a foreigner. The instant case is one where at the time the marriage was solemnized, the parties
were two Filipino citizens, but later on, the wife was naturalized as an American citizen and subsequently
obtained a divorce granting her capacity to remarry, and indeed she remarried an American citizen while
residing in the U.S.A.
Noteworthy, in the Report of the Public Hearings9 on the Family Code, the Catholic Bishops’ Conference of
the Philippines (CBCP) registered the following objections to Paragraph 2 of Article 26:
1. The rule is discriminatory. It discriminates against those whose spouses are Filipinos who divorce them
abroad. These spouses who are divorced will not be able to re-marry, while the spouses of foreigners who
validly divorce them abroad can.
2. This is the beginning of the recognition of the validity of divorce even for Filipino citizens. For those
whose foreign spouses validly divorce them abroad will also be considered to be validly divorced here and
can re-marry. We propose that this be deleted and made into law only after more widespread consultation.
(Emphasis supplied.)
 Legislative Intent However, we note that the records are bereft of competent evidence duly submitted by respondent
Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2 of concerning the divorce decree and the naturalization of respondent’s wife. It is settled rule that one who
Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to alleges a fact has the burden of proving it and mere allegation is not evidence. 13
avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after Accordingly, for his plea to prosper, respondent herein must prove his allegation that his wife was
obtaining a divorce, is no longer married to the Filipino spouse. naturalized as an American citizen. Likewise, before a foreign divorce decree can be recognized by our own
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. courts, the party pleading it must prove the divorce as a fact and demonstrate its conformity to the foreign
Romillo, Jr.10 The Van Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court law allowing it.14 Such foreign law must also be proved as our courts cannot take judicial notice of foreign
held therein that a divorce decree validly obtained by the alien spouse is valid in the Philippines, and laws. Like any other fact, such laws must be alleged and proved. 15 Furthermore, respondent must also show
consequently, the Filipino spouse is capacitated to remarry under Philippine law. that the divorce decree allows his former wife to remarry as specifically required in Article 26. Otherwise,
Does the same principle apply to a case where at the time of the celebration of the marriage, the parties were there would be no evidence sufficient to declare that he is capacitated to enter into another marriage.
Filipino citizens, but later on, one of them obtains a foreign citizenship by naturalization? Nevertheless, we are unanimous in our holding that Paragraph 2 of Article 26 of the Family Code (E.O. No.
The jurisprudential answer lies latent in the 1998 case of Quita v. Court of Appeals.11 In Quita, the parties 209, as amended by E.O. No. 227), should be interpreted to allow a Filipino citizen, who has been divorced
were, as in this case, Filipino citizens when they got married. The wife became a naturalized American by a spouse who had acquired foreign citizenship and remarried, also to remarry. However, considering that
citizen in 1954 and obtained a divorce in the same year. The Court therein hinted, by way of obiter dictum, in the present petition there is no sufficient evidence submitted and on record, we are unable to declare,
that a Filipino divorced by his naturalized foreign spouse is no longer married under Philippine law and can based on respondent’s bare allegations that his wife, who was naturalized as an American citizen, had
thus remarry. obtained a divorce decree and had remarried an American, that respondent is now capacitated to remarry.
Thus, taking into consideration the legislative intent and applying the rule of reason, we hold that Paragraph Such declaration could only be made properly upon respondent’s submission of the aforecited evidence in
2 of Article 26 should be interpreted to include cases involving parties who, at the time of the celebration of his favor.
the marriage were Filipino citizens, but later on, one of them becomes naturalized as a foreign citizen and ACCORDINGLY, the petition by the Republic of the Philippines is GRANTED. The assailed
obtains a divorce decree. The Filipino spouse should likewise be allowed to remarry as if the other party Decision dated May 15, 2002, and Resolution dated July 4, 2002, of the Regional Trial Court of Molave,
were a foreigner at the time of the solemnization of the marriage. To rule otherwise would be to sanction Zamboanga del Sur, Branch 23, are hereby SET ASIDE.
absurdity and injustice. Where the interpretation of a statute according to its exact and literal import would No pronouncement as to costs.
lead to mischievous results or contravene the clear purpose of the legislature, it should be construed SO ORDERED.
according to its spirit and reason, disregarding as far as necessary the letter of the law. A statute may
therefore be extended to cases not within the literal meaning of its terms, so long as they come within its
spirit or intent.12
If we are to give meaning to the legislative intent to avoid the absurd situation where the Filipino spouse
remains married to the alien spouse who, after obtaining a divorce is no longer married to the Filipino
spouse, then the instant case must be deemed as coming within the contemplation of Paragraph 2 of Article
26.
In view of the foregoing, we state the twin elements for the application of Paragraph 2 of Article 26 as
follows:
1. There is a valid marriage that has been celebrated between a Filipino citizen and a foreigner; and
2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry.
The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but
their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to
remarry.
In this case, when Cipriano’s wife was naturalized as an American citizen, there was still a valid marriage
that has been celebrated between her and Cipriano. As fate would have it, the naturalized alien wife
subsequently obtained a valid divorce capacitating her to remarry. Clearly, the twin requisites for the
application of Paragraph 2 of Article 26 are both present in this case. Thus Cipriano, the "divorced" Filipino
spouse, should be allowed to remarry.
We are also unable to sustain the OSG’s theory that the proper remedy of the Filipino spouse is to file either
a petition for annulment or a petition for legal separation. Annulment would be a long and tedious process,
and in this particular case, not even feasible, considering that the marriage of the parties appears to have all
the badges of validity. On the other hand, legal separation would not be a sufficient remedy for it would not
sever the marriage tie; hence, the legally separated Filipino spouse would still remain married to the
naturalized alien spouse.

156
 THIRD DIVISION
G.R. No. 181303 September 17, 2009
CARMEN DANAO MALANA, MARIA DANAO ACORDA, EVELYN DANAO, FERMINA DANAO,
LETICIA DANAO and LEONORA DANAO, the last two are represented herein by their Attorney-in-Fact,
MARIA DANAO ACORDA, Petitioners,
vs.
BENIGNO TAPPA, JERRY REYNA, SATURNINO CAMBRI and SPOUSES FRANCISCO AND
MARIA LIGUTAN,Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Certiorari under Rule 65 of the Rules of Court, assailing the Orders 1 dated 4 May 2007,
30 May 2007, and 31 October 2007, rendered by Branch 3 of the Regional Trial Court (RTC) of Tuguegarao
City, which dismissed, for lack of jurisdiction, the Complaint of petitioners Carmen Danao Malana, Leticia
Danao, Maria Danao Accorda, Evelyn Danao, Fermina Danao, and Leonora Danao, against respondents
Benigno Tappa, Jerry Reyna, Saturnino Cambri, Francisco Ligutan and Maria Ligutan, in Civil Case No.
6868.
Petitioners filed before the RTC their Complaint for Reivindicacion, Quieting of Title, and
Damages2 against respondents on 27 March 2007, docketed as Civil Case No. 6868. Petitioners alleged in
their Complaint that they are the owners of a parcel of land covered by Transfer Certificate of Title (TCT)
No. T-1279373 situated in Tuguegarao City, Cagayan (subject property). Petitioners inherited the subject
property from Anastacio Danao (Anastacio), who died intestate.4 During the lifetime of Anastacio, he had
allowed Consuelo Pauig (Consuelo), who was married to Joaquin Boncad, to build on and occupy the
southern portion of the subject property. Anastacio and Consuelo agreed that the latter would vacate the said
land at any time that Anastacio and his heirs might need it. 5
Petitioners claimed that respondents, Consuelo’s family members, 6 continued to occupy the subject property
even after her death, already building their residences thereon using permanent materials. Petitioners also
learned that respondents were claiming ownership over the subject property. Averring that they already
needed it, petitioners demanded that respondents vacate the same. Respondents, however, refused to heed
petitioners’ demand.7
Petitioners referred their land dispute with respondents to the Lupong Tagapamayapa of Barangay
Annafunan West for conciliation. During the conciliation proceedings, respondents asserted that they owned
the subject property and presented documents ostensibly supporting their claim of ownership.
According to petitioners, respondents’ documents were highly dubious, falsified, and incapable of proving
the latter’s claim of ownership over the subject property; nevertheless, they created a cloud upon petitioners’
title to the property. Thus, petitioners were compelled to file before the RTC a Complaint to remove such
cloud from their title.8Petitioners additionally sought in their Complaint an award against respondents for
actual damages, in the amount of ₱50,000.00, resulting from the latter’s baseless claim over the subject
property that did not actually belong to them, in violation of Article 19 of the Civil Code on Human
Relations.9 Petitioners likewise prayed for an award against respondents for exemplary damages, in the
amount of ₱50,000.00, since the latter had acted in bad faith and resorted to unlawful means to establish
their claim over the subject property. Finally, petitioners asked to recover from respondents ₱50,000.00 as
attorney’s fees, because the latter’s refusal to vacate the property constrained petitioners to engage the
services of a lawyer.10
Before respondents could file their answer, the RTC issued an Order dated 4 May 2007 dismissing
petitioners’ Complaint on the ground of lack of jurisdiction. The RTC referred to Republic Act No.
7691,11 amending Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980,
which vests the RTC with jurisdiction over real actions, where the assessed value of the property involved
exceeds ₱20,000.00. It found that the subject property had a value of less than ₱20,000.00; hence,
157
petitioners’ action to recover the same was outside the jurisdiction of the RTC. The RTC decreed in its 4
May 2007 Order that:
The Court has no jurisdiction over the action, it being a real action involving a real property with assessed
value less than ₱20,000.00 and hereby dismisses the same without prejudice. 12
Petitioners filed a Motion for Reconsideration of the aforementioned RTC Order dismissing their
Complaint. They argued that their principal cause of action was for quieting of title; the accion
reivindicacion was included merely to enable them to seek complete relief from respondents. Petitioner’s
Complaint should not have been dismissed, since Section 1, Rule 63 of the Rules of Court 13 states that an
action to quiet title falls under the jurisdiction of the RTC. 14
In an Order dated 30 May 2007, the RTC denied petitioners’ Motion for Reconsideration. It reasoned that an
action to quiet title is a real action. Pursuant to Republic Act No. 7691, it is the Municipal Trial Court
(MTC) that exercises exclusive jurisdiction over real actions where the assessed value of real property does
not exceed ₱20,000.00. Since the assessed value of subject property per Tax Declaration No, 02-48386 was
₱410.00, the real action involving the same was outside the jurisdiction of the RTC.15
Petitioners filed another pleading, simply designated as Motion, in which they prayed that the RTC Orders
dated 4 May 2007 and 30 May 2007, dismissing their Complaint, be set aside. They reiterated their earlier
argument that Section 1, Rule 63 of the Rules of Court states that an action to quiet title falls under the
exclusive jurisdiction of the RTC. They also contended that there was no obstacle to their joining the two
causes of action, i.e., quieting of title and reivindicacion, in a single Complaint, citing Rumarate v.
Hernandez.16 And even if the two causes of action could not be joined, petitioners maintained that the
misjoinder of said causes of action was not a ground for the dismissal of their Complaint. 17
The RTC issued an Order dated 31 October 2007 denying petitioners’ Motion. It clarified that their
Complaint was dismissed, not on the ground of misjoinder of causes of action, but for lack of jurisdiction.
The RTC dissected Section 1, Rule 63 of the Rules of Court, which provides:
Section 1. Who may file petition. Any person interested under a deed, will, contract or other written
instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or any other
governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional
Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or
duties, thereunder.
An action for the reformation of an instrument, to quiet title to real property or remove clouds therefrom, or
to consolidate ownership under Article 1607 of the Civil Code, may be brought under this Rule.
The RTC differentiated between the first and the second paragraphs of Section 1, Rule 63 of the Rules of
Court. The first paragraph refers to an action for declaratory relief, which should be brought before the RTC.
The second paragraph, however, refers to a different set of remedies, which includes an action to quiet title
to real property. The second paragraph must be read in relation to Republic Act No. 7691, which vests the
MTC with jurisdiction over real actions, where the assessed value of the real property involved does not
exceed ₱50,000.00 in Metro Manila and ₱20,000.00 in all other places.18 The dispositive part of the 31
October 2007 Order of the RTC reads:
This Court maintains that an action to quiet title is a real action. [Herein petitioners] do not dispute the
assessed value of the property at ₱410.00 under Tax Declaration No. 02-48386. Hence, it has no jurisdiction
over the action.
In view of the foregoing considerations, the Motion is hereby denied. 19
Hence, the present Petition, where petitioners raise the sole issue of:
I
WHETHER OR NOT THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION
IN DISMISSING THE COMPLAINT OF THE PETITIONERS MOTU PROPRIO.20
Petitioners’ statement of the issue is misleading. It would seem that they are only challenging the fact that
their Complaint was dismissed by the RTC motu proprio. Based on the facts and arguments set forth in the
instant Petition, however, the Court determines that the fundamental issue for its resolution is whether the
RTC committed grave abuse of discretion in dismissing petitioners’ Complaint for lack of jurisdiction.
The Court rules in the negative.
An action for declaratory relief should be filed by a person interested under a deed, a will, a contract or other
written instrument, and whose rights are affected by a statute, an executive order, a regulation or an
ordinance. The relief sought under this remedy includes the interpretation and determination of the validity
of the written instrument and the judicial declaration of the parties’ rights or duties thereunder. 21
Petitions for declaratory relief are governed by Rule 63 of the Rules of Court. The RTC correctly made a
distinction between the first and the second paragraphs of Section 1, Rule 63 of the Rules of Court.
The first paragraph of Section 1, Rule 63 of the Rules of Court, describes the general circumstances in
which a person may file a petition for declaratory relief, to wit:
Any person interested under a deed, will, contract or other written instrument, or whose rights are affected
by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before
breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any
question of construction or validity arising, and for a declaration of his rights or duties, thereunder.
(Emphasis ours.)
As the afore-quoted provision states, a petition for declaratory relief under the first paragraph of Section 1,
Rule 63 may be brought before the appropriate RTC.
Section 1, Rule 63 of the Rules of Court further provides in its second paragraph that:
An action for the reformation of an instrument, to quiet title to real property or remove clouds therefrom, or
to consolidate ownership under Article 1607 of the Civil Code, may be brought under this Rule. (Emphasis
ours.)
The second paragraph of Section 1, Rule 63 of the Rules of Court specifically refers to (1) an action for the
reformation of an instrument, recognized under Articles 1359 to 1369 of the Civil Code; (2) an action to
quiet title, authorized by Articles 476 to 481 of the Civil Code; and (3) an action to consolidate ownership
required by Article 1607 of the Civil Code in a sale with a right to repurchase. These three remedies are
considered similar to declaratory relief because they also result in the adjudication of the legal rights of the
litigants, often without the need of execution to carry the judgment into effect. 22
To determine which court has jurisdiction over the actions identified in the second paragraph of Section 1,
Rule 63 of the Rules of Court, said provision must be read together with those of the Judiciary
Reorganization Act of 1980, as amended.
It is important to note that Section 1, Rule 63 of the Rules of Court does not categorically require that an
action to quiet title be filed before the RTC. It repeatedly uses the word "may" – that an action for quieting
of title "may be brought under [the] Rule" on petitions for declaratory relief, and a person desiring to file a
petition for declaratory relief "may x x x bring an action in the appropriate Regional Trial Court." The use of
the word "may" in a statute denotes that the provision is merely permissive and indicates a mere possibility,
an opportunity or an option.23
In contrast, the mandatory provision of the Judiciary Reorganization Act of 1980, as amended, uses the word
"shall" and explicitly requires the MTC to exercise exclusive original jurisdiction over all civil actions
which involve title to or possession of real property where the assessed value does not exceed ₱20,000.00,
thus:
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in Civil Cases.—Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, possession of, real property, or
any interest therein where the assessed value of the property or interest therein does not exceed Twenty
thousand pesos (₱20,000.00) or, in civil actions in Metro Manila, where such assessed value does not
158
exceeds Fifty thousand pesos (₱50,000.00) exclusive of interest, damages of whatever kind, attorney’s fees,
litigation expenses and costs: x x x (Emphasis ours.)
As found by the RTC, the assessed value of the subject property as stated in Tax Declaration No. 02-48386
is only ₱410.00; therefore, petitioners’ Complaint involving title to and possession of the said property is
within the exclusive original jurisdiction of the MTC, not the RTC.
Furthermore, an action for declaratory relief presupposes that there has been no actual breach of the
instruments involved or of rights arising thereunder. 24 Since the purpose of an action for declaratory relief is
to secure an authoritative statement of the rights and obligations of the parties under a statute, deed, or
contract for their guidance in the enforcement thereof, or compliance therewith, and not to settle issues
arising from an alleged breach thereof, it may be entertained only before the breach or violation of the
statute, deed, or contract to which it refers. A petition for declaratory relief gives a practical remedy for
ending controversies that have not reached the state where another relief is immediately available; and
supplies the need for a form of action that will set controversies at rest before they lead to a repudiation of
obligations, an invasion of rights, and a commission of wrongs. 25
Where the law or contract has already been contravened prior to the filing of an action for declaratory relief,
the courts can no longer assume jurisdiction over the action. In other words, a court has no more jurisdiction
over an action for declaratory relief if its subject has already been infringed or transgressed before the
institution of the action.26
In the present case, petitioners’ Complaint for quieting of title was filed after petitioners already demanded
and respondents refused to vacate the subject property. In fact, said Complaint was filed only subsequent to
the latter’s express claim of ownership over the subject property before the Lupong Tagapamayapa, in direct
challenge to petitioners’ title.
Since petitioners averred in the Complaint that they had already been deprived of the possession of their
property, the proper remedy for them is the filing of an accion publiciana or an accion reivindicatoria, not a
case for declaratory relief. An accion publiciana is a suit for the recovery of possession, filed one year after
the occurrence of the cause of action or from the unlawful withholding of possession of the realty. An accion
reivindicatoria is a suit that has for its object one’s recovery of possession over the real property as
owner.271avvphi1
Petitioners’ Complaint contained sufficient allegations for an accion reivindicatoria. Jurisdiction over such
an action would depend on the value of the property involved. Given that the subject property herein is
valued only at ₱410.00, then the MTC, not the RTC, has jurisdiction over an action to recover the same. The
RTC, therefore, did not commit grave abuse of discretion in dismissing, without prejudice, petitioners’
Complaint in Civil Case No. 6868 for lack of jurisdiction.
As for the RTC dismissing petitioners’ Complaint motu proprio, the following pronouncements of the Court
in Laresma v. Abellana28 proves instructive:
It is axiomatic that the nature of an action and the jurisdiction of a tribunal are determined by the material
allegations of the complaint and the law at the time the action was commenced. Jurisdiction of the tribunal
over the subject matter or nature of an action is conferred only by law and not by the consent or waiver upon
a court which, otherwise, would have no jurisdiction over the subject matter or nature of an action. Lack of
jurisdiction of the court over an action or the subject matter of an action cannot be cured by the silence,
acquiescence, or even by express consent of the parties. If the court has no jurisdiction over the nature of an
action, it may dismiss the same ex mero motu or motu proprio. x x x. (Emphasis supplied.)
Since the RTC, in dismissing petitioners’ Complaint, acted in complete accord with law and jurisprudence,
it cannot be said to have done so with grave abuse of discretion amounting to lack or excess of jurisdiction.
An act of a court or tribunal may only be considered to have been committed in grave abuse of discretion
when the same was performed in a capricious or whimsical exercise of judgment, which is equivalent to lack
of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive
duty or to a virtual refusal to perform a duty enjoined by law or to act at all in contemplation of law, as
where the power is exercised in an arbitrary and despotic manner by reason of passion or personal
hostility.29 No such circumstances exist herein as to justify the issuance of a writ of certiorari.
IN VIEW OF THE FOREGOING, the instant Petition is DISMISSED. The Orders dated 4 May 2007, 30
May 2007 and 31 October 2007 of the Regional Trial Court of Tuguegarao City, Branch 3, dismissing the
Complaint in Civil Case No. 6868, without prejudice, are AFFIRMED. The Regional Trial Court is ordered
to REMAND the records of this case to the Municipal Trial Court or the court of proper jurisdiction for
proper disposition. Costs against the petitioners.
SO ORDERED.

159
 EN BANC
G.R. No. 202242 July 17, 2012
FRANCISCO I. CHAVEZ, Petitioner,
vs.
JUDICIAL AND BAR COUNCIL, SEN. FRANCIS JOSEPH G. ESCUDERO and REP. NIEL C. TUPAS,
JR.,Respondents.
DECISION
MENDOZA, J.:
The issue at hand has been in hibernation until the unexpected departure of Chief Justice Renato C. Corona
on May 29, 2012, and the nomination of former Solicitor General Francisco I. Chavez (petitioner), as his
potential successor, triggered the filing of this case. The issue has constantly been nagging legal minds, yet
remained dormant for lack of constitutional challenge.
As the matter is of extreme urgency considering the constitutional deadline in the process of selecting the
nominees for the vacant seat of the Chief Justice, the Court cannot delay the resolution of the issue a day
longer. Relegating it in the meantime to the back burner is not an option.
Does the first paragraph of Section 8, Article VIII of the 1987 Constitution allow more than one (1) member
of Congress to sit in the JBC? Is the practice of having two (2) representatives from each house of Congress
with one (1) vote each sanctioned by the Constitution? These are the pivotal questions to be resolved in this
original action for prohibition and injunction.
Long before the naissance of the present Constitution, the annals of history bear witness to the fact that the
exercise of appointing members of the Judiciary has always been the exclusive prerogative of the executive
and legislative branches of the government. Like their progenitor of American origins, both the Malolos
Constitution1 and the 1935 Constitution2 had vested the power to appoint the members of the Judiciary in the
President, subject to confirmation by the Commission on Appointments. It was during these times that the
country became witness to the deplorable practice of aspirants seeking confirmation of their appointment in
the Judiciary to ingratiate themselves with the members of the legislative body. 3
Then, with the fusion of executive and legislative power under the 1973 Constitution, 4 the appointment of
judges and justices was no longer subject to the scrutiny of another body. It was absolute, except that the
appointees must have all the qualifications and none of the disqualifications.
Prompted by the clamor to rid the process of appointments to the Judiciary from political pressure and
partisan activities,5 the members of the Constitutional Commission saw the need to create a separate,
competent and independent body to recommend nominees to the President. Thus, it conceived of a body
representative of all the stakeholders in the judicial appointment process and called it the Judicial and Bar
Council (JBC). Its composition, term and functions are provided under Section 8, Article VIII of the
Constitution, viz:
Section 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court
composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of the
Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, a retired Member
of the Supreme Court, and a representative of the private sector.
(2) The regular members of the Council shall be appointed by the President for a term of four years with the
consent of the Commission on Appointments. Of the Members first appointed, the representative of the
Integrated Bar shall serve for four years, the professor of law for three years, the retired Justice for two
years, and the representative of the private sector for one year.
(3) The Clerk of the Supreme Court shall be the Secretary ex officio of the Council and shall keep a record
of its proceedings.
(4) The regular Members of the Council shall receive such emoluments as may be determined by the
Supreme Court. The Supreme Court shall provide in its annual budget the appropriations for the Council.
(5) The Council shall have the principal function of recommending appointees to the Judiciary. It may
exercise such other functions and duties as the Supreme Court may assign to it.
160
In compliance therewith, Congress, from the moment of the creation of the JBC, designated one
representative to sit in the JBC to act as one of the ex officio members.6 Perhaps in order to give equal
opportunity to both houses to sit in the exclusive body, the House of Representatives and the Senate would
send alternate representatives to the JBC. In other words, Congress had only one (1) representative.
In 1994, the composition of the JBC was substantially altered. Instead of having only seven (7) members, an
eighth (8th) member was added to the JBC as two (2) representatives from Congress began sitting in the
JBC - one from the House of Representatives and one from the Senate, with each having one-half (1/2) of a
vote.7 Then, curiously, the JBC En Banc, in separate meetings held in 2000 and 2001, decided to allow the
representatives from the Senate and the House of Representatives one full vote each. 8 At present, Senator
Francis Joseph G. Escudero and Congressman Niel C. Tupas, Jr. (respondents) simultaneously sit in the JBC
as representatives of the legislature.
It is this practice that petitioner has questioned in this petition, 9 setting forth the following
GROUNDS FOR ALLOWANCE OF THE PETITION
I
Article VIII, Section 8, Paragraph 1 is clear, definite and needs no interpretation in that the JBC
shall have only one representative from Congress.
II
The framers of the Constitution clearly envisioned, contemplated and decided on a JBC composed
of only seven (7) members.
III
Had the framers of the Constitution intended that the JBC composed of the one member from the
Senate and one member from the House of Representatives, they could have easily said so as they
did in the other provisions of the Constitution.
IV
The composition of the JBC providing for three ex-officio members is purposely designed for a
balanced representation of each of the three branches of the government.
V
One of the two (2) members of the JBC from Congress has no right (not even ½ right) to sit in the
said constitutional body and perform the duties and functions of a member thereof.
VI
The JBC cannot conduct valid proceedings as its composition is illegal and unconstitutional. 10
On July 9, 2012, the JBC filed its Comment. 11 It, however, abstained from recommending on how this
constitutional issue should be disposed in gracious deference to the wisdom of the Court. Nonetheless, the
JBC was more than generous enough to offer the insights of various personalities previously connected with
it.12
Through the Office of the Solicitor General (OSG), respondents defended their position as members of the
JBC in their Comment13 filed on July 12, 2012. According to them, the crux of the controversy is the phrase
"a representative of Congress."14 Reverting to the basics, they cite Section 1, Article VI of the
Constitution15 to determine the meaning of the term
"Congress." It is their theory that the two houses, the Senate and the House of Representatives, are
permanent and mandatory components of "Congress," such that the absence of either divests the term of its
substantive meaning as expressed under the Constitution. In simplistic terms, the House of Representatives,
without the Senate and vice-versa, is not Congress.16 Bicameralism, as the system of choice by the Framers,
requires that both houses exercise their respective powers in the performance of its mandated duty which is
to legislate. Thus, when Section 8(1), Article VIII of the Constitution speaks of "a representative from
Congress," it should mean one representative each from both Houses which comprise the entire Congress. 17
Tracing the subject provision’s history, the respondents claim that when the JBC was established, the
Framers originally envisioned a unicameral legislative body, thereby allocating "a representative of the
National Assembly" to the JBC. The phrase, however, was not modified to
aptly jive with the change to bicameralism, the legislative system finally adopted by the Constitutional
Commission on July 21, 1986. According to respondents, if the Commissioners were made aware of the
consequence of having a bicameral legislature instead of a unicameral one, they would have made the
corresponding adjustment in the representation of Congress in the JBC. 18
The ambiguity having resulted from a plain case of inadvertence, the respondents urge the Court to look
beyond the letter of the disputed provision because the literal adherence to its language would produce
absurdity and incongruity to the bicameral nature of Congress.19 In other words, placing either of the
respondents in the JBC will effectively deprive a house of Congress of its representation. In the same vein,
the electorate represented by Members of Congress will lose their only opportunity to participate in the
nomination process for the members of the Judiciary, effectively diminishing the republican nature of the
government.20
The respondents further argue that the allowance of two (2) representatives of Congress to be members of
the JBC does not render the latter’s purpose nugatory. While they admit that the purpose in creating the JBC
was to insulate appointments to the Judiciary from political influence, they likewise cautioned the Court that
this constitutional vision did not intend to entirely preclude political factor in said appointments. Therefore,
no evil should be perceived in the current set-up of the JBC because two (2) members coming from
Congress, whose membership to certain political parties is irrelevant, does not necessarily amplify political
partisanship in the JBC. In fact, the presence of two (2) members from Congress will most likely provide
balance as against the other six (6) members who are undeniably presidential appointees. 21
The Issues
In resolving the procedural and substantive issues arising from the petition, as well as the myriad of counter-
arguments proffered by the respondents, the Court synthesized them into two:
(1) Whether or not the conditions sine qua non for the exercise of the power of judicial review
have been met in this case; and
(2) Whether or not the current practice of the JBC to perform its functions with eight (8) members,
two (2) of whom are members of Congress, runs counter to the letter and spirit of the 1987
Constitution.
The Power of Judicial Review
In its Comment, the JBC submits that petitioner is clothed with locus standi to file the petition, as a citizen
and taxpayer, who has been nominated to the position of Chief Justice. 22
For the respondents, however, petitioner has no "real interest" in questioning the constitutionality of the
JBC’s current composition.23 As outlined in jurisprudence, it is well-settled that for locus standi to lie,
petitioner must exhibit that he has been denied, or is about to be denied, of a personal right or privilege to
which he is entitled. Here, petitioner failed to manifest his acceptance of his recommendation to the position
of Chief Justice, thereby divesting him of a substantial interest in the controversy. Without his name in the
official list of applicants for the post, the respondents claim that there is no personal stake on the part of
petitioner that would justify his outcry of unconstitutionality. Moreover, the mere allegation that this case is
of transcendental importance does not excuse the waiver of the rule on locus standi, because, in the first
place, the case lacks the requisites therefor. The respondents also question petitioner’s belated filing of the
petition.24 Being aware that the current composition of the JBC has been in practice since 1994, petitioner’s
silence for eighteen (18) years show that the constitutional issue being raised before the Court does not
comply with the "earliest possible opportunity" requirement.
Before addressing the above issues in seriatim, the Court deems it proper to first ascertain the nature of the
petition. Pursuant to the rule that the nature of an action is determined by the allegations therein and the
character of the relief sought, the Court views the petition as essentially an action for declaratory relief
under Rule 63 of the 1997 Rules of Civil Procedure. 25
The Constitution as the subject matter, and the validity and construction of Section 8 (1), Article VIII as the
issue raised, the petition should properly be considered as that which would result in the adjudication of
rights sans the execution process because the only relief to be granted is the very declaration of the rights
161
under the document sought to be construed. It being so, the original jurisdiction over the petition lies with
the appropriate Regional Trial Court (RTC). Notwithstanding the fact that only questions of law are raised in
the petition, an action for declaratory relief is not among those within the original jurisdiction of this Court
as provided in Section 5, Article VIII of the Constitution. 26
At any rate, due to its serious implications, not only to government processes involved but also to the
sanctity of the Constitution, the Court deems it more prudent to take cognizance of it. After all, the petition
is also for prohibition under Rule 65 seeking to enjoin Congress from sending two (2) representatives with
one (1) full vote each to the JBC.
The Courts’ power of judicial review, like almost all other powers conferred by the Constitution, is subject
to several limitations, namely: (1) there must be an actual case or controversy calling for the exercise of
judicial power; (2) the person challenging the act must have "standing" to challenge; he must have a
personal and substantial interest in the case, such that he has sustained or will sustain, direct injury as a
result of its enforcement; (3) the question of constitutionality must be raised at the earliest possible
opportunity; and (4) the issue of constitutionality must be the very lis mota of the case. 27 Generally, a party
will be allowed to litigate only when these conditions sine qua non are present, especially when the
constitutionality of an act by a co-equal branch of government is put in issue.
Anent locus standi, the question to be answered is this: does the party possess a personal stake in the
outcome of the controversy as to assure that there is real, concrete and legal conflict of rights and duties
from the issues presented before the Court? In David v. Macapagal-Arroyo,28 the Court summarized the
rules on locus standi as culled from jurisprudence. There, it was held that taxpayers, voters, concerned
citizens, and legislators may be accorded standing to sue, provided that the following requirements are met:
(1) cases involve constitutional issues; (2) for taxpayers, there must be a claim of illegal disbursement of
public funds or that the tax measure is unconstitutional; (3) for voters, there must be a showing of obvious
interest in the validity of the election law in question; (4) for concerned citizens, there must be a showing
that the issues raised are of transcendental importance which must be settled early; and (5) for legislators,
there must be a claim that the official action complained of infringes upon their prerogatives as legislators.
In public suits, the plaintiff, representing the general public, asserts a "public right" in assailing an allegedly
illegal official action. The plaintiff may be a person who is affected no differently from any other person,
and can be suing as a "stranger," or as a "citizen" or "taxpayer." Thus, taxpayers have been allowed to sue
where there is a claim that public funds are illegally disbursed or that public money is being deflected to any
improper purpose, or that public funds are wasted through the enforcement of an invalid or unconstitutional
law. Of greater import than the damage caused by the illegal expenditure of public funds is the mortal
wound inflicted upon the fundamental law by the enforcement of an invalid statute. 29
In this case, petitioner seeks judicial intervention as a taxpayer, a concerned citizen and a nominee to the
position of Chief Justice of the Supreme Court. As a taxpayer, petitioner invokes his right to demand that the
taxes he and the rest of the citizenry have been paying to the government are spent for lawful purposes.
According to petitioner, "since the JBC derives financial support for its functions, operation and proceedings
from taxes paid, petitioner possesses as taxpayer both right and legal standing to demand that the JBC’s
proceedings are not tainted with illegality and that its composition and actions do not violate the
Constitution."30
Notably, petitioner takes pains in enumerating past actions that he had brought before the Court where his
legal standing was sustained. Although this inventory is unnecessary to establish locus standi because
obviously, not every case before the Court exhibits similar issues and facts, the Court recognizes the
petitioner’s right to sue in this case. Clearly, petitioner has the legal standing to bring the present action
because he has a personal stake in the outcome of this controversy.
The Court disagrees with the respondents’ contention that petitioner lost his standing to sue because he is
not an official nominee for the post of Chief Justice. While it is true that a "personal stake" on the case is
imperative to have locus standi, this is not to say that only official nominees for the post of Chief Justice can
come to the Court and question the JBC composition for being unconstitutional. The JBC likewise screens
and nominates other members of the Judiciary. Albeit heavily publicized in this regard, the JBC’s duty is not
at all limited to the nominations for the highest magistrate in the land. A vast number of aspirants to judicial
posts all over the country may be affected by the Court’s ruling. More importantly, the legality of the very
process of nominations to the positions in the Judiciary is the nucleus of the controversy. The Court
considers this a constitutional issue that must be passed upon, lest a constitutional process be plagued by
misgivings, doubts and worse, mistrust. Hence, a citizen has a right to bring this question to the Court,
clothed with legal standing and at the same time, armed with issues of transcendental importance to society.
The claim that the composition of the JBC is illegal and unconstitutional is an object of concern, not just for
a nominee to a judicial post, but for all citizens who have the right to seek judicial intervention for
rectification of legal blunders.
With respect to the question of transcendental importance, it is not difficult to perceive from the opposing
arguments of the parties that the determinants established in jurisprudence are attendant in this case: (1) the
character of the funds or other assets involved in the case; (2) the presence of a clear case of disregard of a
constitutional or statutory prohibition by the public respondent agency or instrumentality of the government;
and (3) the lack of any other party with a more direct and specific interest in the questions being
raised.31 The allegations of constitutional violations in this case are not empty attacks on the wisdom of the
other branches of the government. The allegations are substantiated by facts and, therefore, deserve an
evaluation from the Court. The Court need not elaborate on the legal and societal ramifications of the issues
raised. It cannot be gainsaid that the JBC is a constitutional innovation crucial in the selection of the
magistrates in our judicial system.
The Composition of the JBC
Central to the resolution of the foregoing petition is an understanding of the composition of the JBC as
stated in the first paragraph of Section 8, Article VIII of the Constitution. It reads:
Section 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court
composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of the
Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, a retired Member
of the Supreme Court, and a representative of the private sector.
From a simple reading of the above-quoted provision, it can readily be discerned that the provision is clear
and unambiguous. The first paragraph calls for the creation of a JBC and places the same under the
supervision of the Court. Then it goes to its composition where the regular members are enumerated: a
representative of the Integrated Bar, a professor of law, a retired member of the Court and a representative
from the private sector. On the second part lies the crux of the present controversy. It enumerates the ex
officio or special members of the JBC composed of the Chief Justice, who shall be its Chairman, the
Secretary of Justice and "a representative of Congress."
As petitioner correctly posits, the use of the singular letter "a" preceding "representative of Congress" is
unequivocal and leaves no room for any other construction. It is indicative of what the members of the
Constitutional Commission had in mind, that is, Congress may designate only one (1) representative to the
JBC. Had it been the intention that more than one (1) representative from the legislature would sit in the
JBC, the Framers could have, in no uncertain terms, so provided.
One of the primary and basic rules in statutory construction is that where the words of a statute are clear,
plain, and free from ambiguity, it must be given its literal meaning and applied without attempted
interpretation.32 It is a well-settled principle of constitutional construction that the language employed in the
Constitution must be given their ordinary meaning except where technical terms are employed. As much as
possible, the words of the Constitution should be understood in the sense they have in common use. What it
says according to the text of the provision to be construed compels acceptance and negates the power of the
courts to alter it, based on the postulate that the framers and the people mean what they say. 33 Verba legis
non est recedendum – from the words of a statute there should be no departure.34
The raison d’ être for the rule is essentially two-fold: First, because it is assumed that the words in which
constitutional provisions are couched express the objective sought to be attained; 35 and second, because the
162
Constitution is not primarily a lawyer’s document but essentially that of the people, in whose consciousness
it should ever be present as an important condition for the rule of law to prevail. 36
Moreover, under the maxim noscitur a sociis, where a particular word or phrase is ambiguous in itself or is
equally susceptible of various meanings, its correct construction may be made clear and specific by
considering the company of words in which it is founded or with which it is associated. 37 This is because a
word or phrase in a statute is always used in association with other words or phrases, and its meaning may,
thus, be modified or restricted by the latter.38 The particular words, clauses and phrases should not be studied
as detached and isolated expressions, but the whole and every part of the statute must be considered in fixing
the meaning of any of its parts and in order to produce a harmonious whole. A statute must be so construed
as to harmonize and give effect to all its provisions whenever possible. 39 In short, every meaning to be given
to each word or phrase must be ascertained from the context of the body of the statute since a word or phrase
in a statute is always used in association with other words or phrases and its meaning may be modified or
restricted by the latter.
Applying the foregoing principle to this case, it becomes apparent that the word "Congress" used in Article
VIII, Section 8(1) of the Constitution is used in its generic sense. No particular allusion whatsoever is made
on whether the Senate or the House of Representatives is being referred to, but that, in either case, only a
singular representative may be allowed to sit in the JBC. The foregoing declaration is but sensible, since, as
pointed out by an esteemed former member of the Court and consultant of the JBC in his
memorandum,40 "from the enumeration of the membership of the JBC, it is patent that each category of
members pertained to a single individual only."41
Indeed, the spirit and reason of the statute may be passed upon where a literal meaning would lead to
absurdity, contradiction, injustice, or defeat the clear purpose of the lawmakers.42 Not any of these instances,
however, is present in the case at bench. Considering that the language of the subject constitutional
provision is plain and unambiguous, there is no need to resort extrinsic aids such as records of the
Constitutional Commission.
Nevertheless, even if the Court should proceed to look into the minds of the members of the Constitutional
Commission, it is undeniable from the records thereof that it was intended that the JBC be composed of
seven (7) members only. Thus:
MR. RODRIGO: Let me go to another point then.
On page 2, Section 5, there is a novel provision about the appointments of members of the Supreme Court
and judges of the lower courts. At present it is the President who appoints them. If there is a Commission on
Appointments, then it is the President with the confirmation of the Commission on Appointment. In this
proposal, we would like to establish a new office, a sort of a board composed of seven members called the
Judicial and Bar Council. And while the President will still appoint the member of the judiciary, he will be
limited to the recommendees of this Council.
xxx xxx xxx
MR. RODRIGO. Of the seven members of the Judicial and Bar Council, the President appoints four of them
who are regular members.
xxx xxx xxx
MR. CONCEPCION. The only purpose of the Committee is to eliminate partisan politics. 43
xxx xxx xxx
MR. RODRIGO. If my amendment is approved, then the provision will be exactly the same as the provision
in the 1935 Constitution, Article VIII, Section 5.
xxx xxx xxx
If we do not remove the proposed amendment on the creation of the Judicial and Bar Council, this will be a
diminution of the appointing power of the highest magistrate of the land, of the
President of the Philippines elected by all the Filipino people. The appointing power will be limited by a
group of seven people who are not elected by the people but only appointed.
Mr. Presiding Officer, if this Council is created, there will be no uniformity in our constitutional provisions
on appointments. The members of the Judiciary will be segregated from the rest of the government. Even a
municipal judge cannot be appointed by the President except upon recommendation or nomination of the
three names by this Committee of seven people, commissioners of the Commission on Elections, the COA
and the Commission on Civil Service…even ambassadors, generals of the Army will not come under this
restriction. Why are we going to segregate the Judiciary from the rest of our government in the appointment
of high-ranking officials?
Another reason is that this Council will be ineffective. It will just besmirch the honor of our President
without being effective at all because this Council will be under the influence of the President. Four out of
seven are appointees of the President and they can be reappointed when their term ends. Therefore, they
would be kowtow the President. A fifth member is the Minister of Justice, an alter ego of the President.
Another member represents the Legislature. In all probability, the controlling part in the legislature belongs
to the President and, therefore, this representative form the National Assembly is also under the influence of
the President. And may I say, Mr. Presiding Officer, that event the Chief Justice of the Supreme Court is an
appointee of the President. So it is futile he will be influence anyway by the President. 44 [Emphases
supplied]
At this juncture, it is worthy to note that the seven-member composition of the JBC serves a practical
purpose, that is, to provide a solution should there be a stalemate in voting. This underlying reason leads the
Court to conclude that a single vote may not be divided into half (1/2), between two representatives of
Congress, or among any of the sitting members of the JBC for that matter. This unsanctioned practice can
possibly cause disorder and eventually muddle the JBC’s voting process, especially in the event a tie is
reached. The aforesaid purpose would then be rendered illusory, defeating the precise mechanism which the
Constitution itself created. While it would be unreasonable to expect that the Framers provide for every
possible scenario, it is sensible to presume that they knew that an odd composition is the best means to break
a voting deadlock.
The respondents insist that owing to the bicameral nature of Congress, the word "Congress" in Section 8(1),
Article VIII of the Constitution should be read as including both the Senate and the House of
Representatives. They theorize that it was so worded because at the time the said provision was being
drafted, the Framers initially intended a unicameral form of Congress.
Then, when the Constitutional Commission eventually adopted a bicameral form of Congress, the Framers,
through oversight, failed to amend Article VIII, Section 8 of the Constitution. 45 On this score, the Court cites
the insightful analysis of another member of the Court and JBC consultant, retired Justice Consuelo Ynares-
Santiago.46 Thus:
A perusal of the records of the Constitutional Commission reveals that the composition of the JBC reflects
the Commission’s desire "to have in the Council a representation for the major elements of the
community." xxx The ex-officio members of the Council consist of representatives from the three main
branches of government while the regular members are composed of various stakeholders in the
judiciary. The unmistakeable tenor of Article VIII, Section 8(1) was to treat each ex-officio member
as representing one co-equal branch of government. xxxThus, the JBC was designed to have seven voting
members with the three ex-officio members having equal say in the choice of judicial nominees.
xxx xxx xxx
No parallelism can be drawn between the representative of Congress in the JBC and the exercise by
Congress of its legislative powers under Article VI and constituent powers under Article XVII of the
Constitution. Congress, in relation to the executive and judicial branches of government, is constitutionally
treated as another co-equal branch of in the matter of its representative in the JBC. On the other hand, the
exercise of legislative and constituent powers requires the Senate and House of Representatives to
coordinate and act as distinct bodies in furtherance of Congress’ role under our constitutional scheme. While
the latter justifies and, in fact, necessitates the separateness of the two houses of Congress as they relate inter
163
se, no such dichotomy need be made when Congress interacts with the other two co-equal branches of
government.
It is more in keeping with the co-equal nature of the three governmental branches to assign the same weight
to considerations that any of its representatives may have regarding aspiring nominees to the judiciary. The
representatives of the Senate and the House of Representatives act as such for one branch and should not
have any more quantitative influence as the other branches in the exercise of prerogatives evenly bestowed
upon the three. Sound reason and principle of equality among the three branches support this conclusion.
[Emphases and underscoring supplied]
More than the reasoning provided in the above discussed rules of constitutional construction, the Court finds
the above thesis as the paramount justification of the Court’s conclusion that "Congress," in the context of
JBC representation, should be considered as one body. It is evident that the definition of "Congress" as a
bicameral body refers to its primary function in government - to legislate.47 In the passage of laws, the
Constitution is explicit in the distinction of the role of each house in the process. The same holds true in
Congress’ non-legislative powers such as, inter alia, the power of appropriation,48 the declaration of an
existence of a state of war,49 canvassing of electoral returns for the President and Vice-President,50 and
impeachment.51 In the exercise of these powers, the Constitution employs precise language in laying down
the roles which a particular house plays, regardless of whether the two houses consummate an official act by
voting jointly or separately. An inter-play between the two houses is necessary in the realization of these
powers causing a vivid dichotomy that the Court cannot simply discount. Verily, each house is
constitutionally granted with powers and functions peculiar to its nature and with keen consideration to 1) its
relationship with the other chamber; and 2) in consonance with the principle of checks and balances, to the
other branches of government.
This, however, cannot be said in the case of JBC representation because no liaison between the two houses
exists in the workings of the JBC. No mechanism is required between the Senate and the House of
Representatives in the screening and nomination of judicial officers. Hence, the term "Congress" must be
taken to mean the entirelegislative department. A fortiori, a pretext of oversight cannot prevail over the
more pragmatic scheme which the Constitution laid with firmness, that is, that the JBC has a seat for a single
representative of Congress, as one of the co-equal branches of government.
Doubtless, the Framers of our Constitution intended to create a JBC as an innovative solution in response to
the public clamor in favor of eliminating politics in the appointment of members of the Judiciary. 52 To
ensure judicial independence, they adopted a holistic approach and hoped that, in creating a JBC, the private
sector and the three branches of government would have an active role and equal voice in the selection of
the members of the Judiciary.
Therefore, to allow the Legislature to have more quantitative influence in the JBC by having more than one
voice speak, whether with one full vote or one-half (1/2) a vote each, would, as one former congressman and
member of the JBC put it, "negate the principle of equality among the three branches of government which
is enshrined in the Constitution."53
To quote one former Secretary of Justice:
The present imbalance in voting power between the Legislative and the other sectors represented in the JBC
must be corrected especially when considered vis-à-vis the avowed purpose for its creation, i.e., to insulate
the appointments in the Judiciary against political influence. By allowing both houses of Congress to have a
representative in the JBC and by giving each representative one (1) vote in the Council, Congress, as
compared to the other members of the JBC, is accorded greater and unwarranted influence in the
appointment of judges.54[Emphasis supplied]
It is clear, therefore, that the Constitution mandates that the JBC be composed of seven (7) members only.
Thus, any inclusion of another member, whether with one whole vote or half (1/2) of it, goes against that
mandate. Section 8(1), Article VIII of the Constitution, providing Congress with an equal voice with other
members of the JBC in recommending appointees to the Judiciary is explicit. Any circumvention of the
constitutional mandate should not be countenanced for the Constitution is the supreme law of the land. The
Constitution is the basic and paramount law to which all other laws must conform and to which all persons,
including the highest officials of the land, must defer. Constitutional doctrines must remain steadfast no
matter what may be the tides of time. It cannot be simply made to sway and accommodate the call of
situations and much more tailor itself to the whims and caprices of the government and the people who run
it.55 Hence, any act of the government or of a public official or employee which is contrary to the
Constitution is illegal, null and void.
As to the effect of the Court’s finding that the current composition of the JBC is unconstitutional, it bears
mentioning that as a general rule, an unconstitutional act is not a law; it confers no rights; it imposes no
duties; it affords no protection; it creates no office; it is inoperative as if it has not been passed at all. 56 This
rule, however, is not absolute. In the interest of fair play under the doctrine of operative facts, actions
previous to the declaration of unconstitutionality are legally recognized. They are not nullified. In Planters
Products, Inc. v. Fertiphil Corporation,57the Court explained:
The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity and fair
play.1âwphi1 It nullifies the effects of an unconstitutional law by recognizing that the existence of a statute
prior to a determination of unconstitutionality is an operative fact and may have consequences which cannot
always be ignored. The past cannot always be erased by a new judicial declaration.
The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those
who have relied on the invalid law. Thus, it was applied to a criminal case when a declaration of
unconstitutionality would put the accused in double jeopardy or would put in limbo the acts done by a
municipality in reliance upon a law creating it.
Considering the circumstances, the Court finds the exception applicable in this case and holds that
notwithstanding its finding of unconstitutionality in the current composition of the JBC, all its prior official
actions are nonetheless valid.
At this point, the Court takes the initiative to clarify that it is not in a position to determine as to who should
remain as the sole representative of Congress in the JBC. This is a matter beyond the province of the Court
and is best left to the determination of Congress.
Finally, while the Court finds wisdom in respondents' contention that both the Senate and the House of
Representatives should be equally represented in the JBC, the Court is not in a position to stamp its
imprimatur on such a construction at the risk of expanding the meaning of the Constitution as currently
worded. Needless to state, the remedy lies in the amendment of this constitutional provision. The courts
merely give effect to the lawgiver's intent. The solemn power and duty of the Court to interpret and apply
the law does not include the power to correct, by reading into the law what is not written therein.
WHEREFORE, the petition is GRANTED. The current numerical composition of the Judicial and Bar
Council IS declared UNCONSTITUTIONAL. The Judicial and Bar Council is hereby enjoined to
reconstitute itself so that only one ( 1) member of Congress will sit as a representative in its proceedings, in
accordance with Section 8( 1 ), Article
VIII of the 1987 Constitution.
This disposition is immediately executory.
SO ORDERED.

164
 SECOND DIVISION
G.R. No. 181359 August 5, 2013
SPOUSES CLEMENCIO C. SABITSANA, JR. and MA. ROSARIO M. SABITSANA, Petitioners,
vs.
JUANITO F. MUERTEGUI, represented by his Attorney-in-Fact DOMINGO A. MUERTEGUI,
JR., Respondent.
DECISION
DEL CASTILLO, J.:
A lawyer may not, for his own personal interest and benefit, gamble on his client's word, believing it at one
time and disbelieving it the next. He owes his client his undivided loyalty.
Assailed in this Petition for Review on Certiorari1 are the January 25, 2007 Decision2 of the Court of
Appeals (CA) which denied the appeal in CA-G.R. CV No. 79250, and its January 11, 2008
Resolution3 denying petitioner’s Motion for Reconsideration.4
Factual Antecedents
On September 2, 1981, Alberto Garcia (Garcia) executed an unnotarized Deed of Sale 5 in favor of
respondent Juanito Muertegui6 (Juanito) over a 7,500-square meter parcel of unregistered land (the lot)
located in Dalutan Island, Talahid, Almeira, Biliran, Leyte del Norte covered by Tax Declaration (TD) No.
1996 issued in 1985 in Garcia’s name.7
Juanito’s father Domingo Muertegui, Sr. (Domingo Sr.) and brother Domingo Jr. took actual possession of
the lot and planted thereon coconut and ipil-ipil trees. They also paid the real property taxes on the lot for
the years 1980 up to 1998.
On October 17, 1991, Garcia sold the lot to the Muertegui family lawyer, petitioner Atty. Clemencio C.
Sabitsana, Jr. (Atty. Sabitsana), through a notarized deed of absolute sale.8 The sale was registered with the
Register of Deeds on February 6, 1992.9 TD No. 1996 was cancelled and a new one, TD No. 5327, 10 was
issued in Atty. Sabitsana’s name. Although Domingo Jr. and Sr. paid the real estate taxes, Atty. Sabitsana
also paid real property taxes in 1992, 1993, and 1999. In 1996, he introduced concrete improvements on the
property, which shortly thereafter were destroyed by a typhoon.
When Domingo Sr. passed away, his heirs applied for registration and coverage of the lot under the Public
Land Act or Commonwealth Act No. 141. Atty. Sabitsana, in a letter 11 dated August 24, 1998 addressed to
the Department of Environment and Natural Resources’ CENRO/PENRO office in Naval, Biliran, opposed
the application, claiming that he was the true owner of the lot. He asked that the application for registration
be held in abeyance until the issue of conflicting ownership has been resolved.
On April 11, 2000, Juanito, through his attorney-in-fact Domingo Jr., filed Civil Case No. B-109712 for
quieting of title and preliminary injunction, against herein petitioners Atty. Sabitsana and his wife, Rosario,
claiming that they bought the lot in bad faith and are exercising acts of possession and ownership over the
same, which acts thus constitute a cloud over his title. The Complaint13 prayed, among others, that the
Sabitsana Deed of Sale, the August 24, 1998 letter, and TD No. 5327 be declared null and void and of no
effect; that petitioners be ordered to respect and recognize Juanito’s title over the lot; and that moral and
exemplary damages, attorney’s fees, and litigation expenses be awarded to him.
In their Answer with Counterclaim,14 petitioners asserted mainly that the sale to Juanito is null and void
absent the marital consent of Garcia’s wife, Soledad Corto (Soledad); that they acquired the property in
good faith and for value; and that the Complaint is barred by prescription and laches. They likewise insisted
that the Regional Trial Court (RTC) of Naval, Biliran did not have jurisdiction over the case, which involved
title to or interest in a parcel of land the assessed value of which is merely ₱1,230.00.
The evidence and testimonies of the respondent’s witnesses during trial reveal that petitioner Atty. Sabitsana
was the Muertegui family’s lawyer at the time Garcia sold the lot to Juanito, and that as such, he was
consulted by the family before the sale was executed; that after the sale to Juanito, Domingo Sr. entered into
actual, public, adverse and continuous possession of the lot, and planted the same to coconut and ipil-ipil;
165
and that after Domingo Sr.’s death, his wife Caseldita, succeeded him in the possession and exercise of
rights over the lot.
On the other hand, Atty. Sabitsana testified that before purchasing the lot, he was told by a member of the
Muertegui family, Carmen Muertegui Davies (Carmen), that the Muertegui family had bought the lot, but
she could not show the document of sale; that he then conducted an investigation with the offices of the
municipal and provincial assessors; that he failed to find any document, record, or other proof of the sale by
Garcia to Juanito, and instead discovered that the lot was still in the name of Garcia; that given the foregoing
revelations, he concluded that the Muerteguis were merely bluffing, and that they probably did not want him
to buy the property because they were interested in buying it for themselves considering that it was adjacent
to a lot which they owned; that he then proceeded to purchase the lot from Garcia; that after purchasing the
lot, he wrote Caseldita in October 1991 to inform her of the sale; that he then took possession of the lot and
gathered ipil-ipil for firewood and harvested coconuts and calamansi from the lot; and that he constructed a
rip-rap on the property sometime in 1996 and 1997.
Ruling of the Regional Trial Court
On October 28, 2002, the trial court issued its Decision15 which decrees as follows:
WHEREFORE, in view of the foregoing considerations, this Court finds in favor of the plaintiff and against
the defendants, hereby declaring the Deed of Sale dated 2 September 1981 as valid and preferred while the
Deed of Absolute Sale dated 17 October 1991 and Tax Declaration No. 5327 in the name of Atty.
Clemencio C. Sabitsana, Jr. are VOID and of no legal effect.
The Provincial Assessor and the Municipal Assessor of Naval are directed to cancel Tax Declaration No.
5327 as void and done in bad faith.
Further, Atty. Clemencio C. Sabitsana, Jr. is ordered to pay plaintiff Juanito Muertigui, represented by his
attorney-in-fact Domingo Muertigui, Jr. the amounts of:
a) ₱30,000.00 as attorney’s fees;
b) ₱10,000.00 as litigation expenses; and
c) Costs.
SO ORDERED.16
The trial court held that petitioners are not buyers in good faith. Petitioner Atty. Sabitsana was the
Muertegui family’s lawyer, and was informed beforehand by Carmen that her family had purchased the lot;
thus, he knew of the sale to Juanito. After conducting an investigation, he found out that the sale was not
registered. With this information in mind, Atty. Sabitsana went on to purchase the same lot and raced to
register the sale ahead of the Muerteguis, expecting that his purchase and prior registration would prevail
over that of his clients, the Muerteguis. Applying Article 1544 of the Civil Code, 17 the trial court declared
that even though petitioners were first to register their sale, the same was not done in good faith. And
because petitioners’ registration was not in good faith, preference should be given to the sale in favor of
Juanito, as he was the first to take possession of the lot in good faith, and the sale to petitioners must be
declared null and void for it casts a cloud upon the Muertegui title.
Petitioners filed a Motion for Reconsideration18 but the trial court denied19 the same.
Ruling of the Court of Appeals
Petitioners appealed to the CA20 asserting that the sale to Juanito was null and void for lack of marital
consent; that the sale to them is valid; that the lower court erred in applying Article 1544 of the Civil Code;
that the Complaint should have been barred by prescription, laches and estoppel; that respondent had no
cause of action; that respondent was not entitled to an award of attorney’s fees and litigation expenses; and
that they should be the ones awarded attorney’s fees and litigation expenses.
The CA, through its questioned January 25, 2007 Decision,21 denied the appeal and affirmed the trial court’s
Decision in toto. It held that even though the lot admittedly was conjugal property, the absence of Soledad’s
signature and consent to the deed did not render the sale to Juanito absolutely null and void, but merely
voidable. Since Garcia and his wife were married prior to the effectivity of the Family Code, Article 173 of
the Civil Code22should apply; and under the said provision, the disposition of conjugal property without the
wife’s consent is not void, but merely voidable. In the absence of a decree annulling the deed of sale in favor
of Juanito, the same remains valid.
The CA added that the fact that the Deed of Sale in favor of Juanito was not notarized could not affect its
validity. As against the notarized deed of sale in favor of petitioners, the CA held that the sale in favor of
Juanito still prevails. Applying Article 1544 of the Civil Code, the CA said that the determining factor is
petitioners’ good faith, or the lack of it. It held that even though petitioners were first to register the sale in
their favor, they did not do so in good faith, for they already knew beforehand of Garcia’s prior sale to
Juanito. By virtue of Atty. Sabitsana’s professional and confidential relationship with the Muertegui family,
petitioners came to know about the prior sale to the Muerteguis and the latter’s possession of the lot, and yet
they pushed through with the second sale. Far from acting in good faith, petitioner Atty. Sabitsana used his
legal knowledge to take advantage of his clients by registering his purchase ahead of them.
Finally, the CA declared that Juanito, as the rightful owner of the lot, possessed the requisite cause of action
to institute the suit for quieting of title and obtain judgment in his favor, and is entitled as well to an award
for attorney’s fees and litigation expenses, which the trial court correctly held to be just and equitable under
the circumstances.
The dispositive portion of the CA Decision reads:
WHEREFORE, premises considered, the instant appeal is DENIED and the Decision dated October 28,
2002 of the Regional Trial Court, 8th Judicial Region, Branch 16, Naval, Biliran, is hereby AFFIRMED.
Costs against defendants-appellants.
SO ORDERED.23
Issues
Petitioners now raise the following issues for resolution:
I. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE REGIONAL TRIAL
COURT DID NOT HAVE JURISDICTION OVER THE CASE IN VIEW OF THE FACT THAT
THE ASSESSED VALUE OF THE SUBJECT LAND WAS ONLY ₱1,230.00 (AND STATED
MARKET VALUE OF ONLY ₱3,450.00).
II. THE COURT OF APPEALS ERRED IN APPLYING ART. 1544 OF THE CIVIL CODE
INSTEAD OF THE PROPERTY REGISTRATION DECREE (P.D. NO. 1529) CONSIDERING
THAT THE SUBJECT LAND WAS UNREGISTERED.
III. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE COMPLAINT WAS
ALREADY BARRED [BY] LACHES AND THE STATUTE OF LIMITATIONS.
IV. THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE
REGIONAL TRIAL COURT ORDERING THE PETITIONERS TO PAY ATTORNEY’S FEES
AND LITIGATION EXPENSES TO THE RESPONDENT.24
Petitioners’ Arguments
Petitioners assert that the RTC of Naval, Biliran did not have jurisdiction over the case. They argue that
since the assessed value of the lot was a mere ₱1,230.00, jurisdiction over the case lies with the first level
courts, pursuant to Republic Act No. 7691, 25 which expanded their exclusive original jurisdiction to include
"all civil actions which involve title to, or possession of, real property, or any interest therein where the
assessed value of the property or interest therein does not exceed Twenty thousand pesos (₱20,000.00) or, in
civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (₱50,000.00)
exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses and costs." 26 Petitioners
thus conclude that the Decision in Civil Case No. B-1097 is null and void for lack of jurisdiction.
Petitioners next insist that the lot, being unregistered land, is beyond the coverage of Article 1544 of the
Civil Code, and instead, the provisions of Presidential Decree (PD) No. 1529 should apply. This being the
case, the Deed of Sale in favor of Juanito is valid only as between him and the seller Garcia, pursuant to
Section 113 of PD 1529;27 it cannot affect petitioners who are not parties thereto.
On the issue of estoppel, laches and prescription, petitioners insist that from the time they informed the
Muerteguis in writing about their purchase of the lot, or in October 1991, the latter did not notify them of
166
their prior purchase of the lot, nor did respondent interpose any objection to the sale in their favor. It was
only in 1998 that Domingo Jr. showed to petitioners the unnotarized deed of sale. According to petitioners,
this seven-year period of silence and inaction on the Muerteguis’ part should be taken against them and
construed as neglect on their part to assert their rights for an unreasonable length of time. As such, their
action to quiet title should be deemed barred by laches and estoppel.
Lastly, petitioners take exception to the award of attorney’s fees and litigation expenses, claiming that since
there was no bad faith on their part, such award may not be considered just and equitable under the
circumstances. Still, an award of attorney’s fees should remain the exception rather than the rule; and in
awarding the same, there must have been an express finding of facts and law justifying such award, a
requirement that is absent in this case.
Petitioners thus pray for the reversal of the questioned CA Decision and Resolution; the dismissal of the
Complaint in Civil Case No. B-1097; the deletion of the award of attorney’s fees and litigation expenses in
respondent’s favor; and a declaration that they are the true and rightful owners of the lot.
Respondent’s Arguments
Respondent, on the other hand, counters that a suit for quieting of title is one whose subject matter is
incapable of pecuniary estimation, and thus falls within the jurisdiction of the RTC. He likewise insists that
Article 1544 applies to the case because there is a clear case of double sale of the same property to different
buyers, and the bottom line thereof lies in petitioners’ lack of good faith in entering into the subsequent sale.
On the issue of laches/estoppel, respondent echoes the CA’s view that he was persistent in the exercise of
his rights over the lot, having previously filed a complaint for recovery of the lot, which unfortunately was
dismissed based on technicality.
On the issue of attorney’s fees and litigation expenses, respondent finds refuge in Article 2208 of the Civil
Code,28citing three instances which fortify the award in his favor – petitioners’ acts compelled him to litigate
and incur expenses to protect his interests; their gross and evident bad faith in refusing to recognize his
ownership and possession over the lot; and the justness and equitableness of his case.
Our Ruling
The Petition must be denied.
The Regional Trial Court has jurisdiction over the suit for quieting of title.
On the question of jurisdiction, it is clear under the Rules that an action for quieting of title may be instituted
in the RTCs, regardless of the assessed value of the real property in dispute. Under Rule 63 of the Rules of
Court,29 an action to quiet title to real property or remove clouds therefrom may be brought in the
appropriate RTC.
It must be remembered that the suit for quieting of title was prompted by petitioners’ August 24, 1998 letter-
opposition to respondent’s application for registration. Thus, in order to prevent 30 a cloud from being cast
upon his application for a title, respondent filed Civil Case No. B-1097 to obtain a declaration of his rights.
In this sense, the action is one for declaratory relief, which properly falls within the jurisdiction of the RTC
pursuant to Rule 63 of the Rules.
Article 1544 of the Civil Code does not apply to sales involving unregistered land.
Both the trial court and the CA are, however, wrong in applying Article 1544 of the Civil Code. Both courts
seem to have forgotten that the provision does not apply to sales involving unregistered land. Suffice it to
state that the issue of the buyer’s good or bad faith is relevant only where the subject of the sale is registered
land, and the purchaser is buying the same from the registered owner whose title to the land is clean. In such
case, the purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in
good faith for value.31
Act No. 3344 applies to sale of unregistered lands.
What applies in this case is Act No. 3344,32 as amended, which provides for the system of recording of
transactions over unregistered real estate. Act No. 3344 expressly declares that any registration made shall
be without prejudice to a third party with a better right. The question to be resolved therefore is: who
between petitioners and respondent has a better right to the disputed lot?
Respondent has a better right to the lot. Moreover, as the Muertegui family’s lawyer, Atty. Sabitsana was under obligation to safeguard his client's
The sale to respondent Juanito was executed on September 2, 1981 via an unnotarized deed of sale, while property, and not jeopardize it. Such is his duty as an attorney, and pursuant to his general agency. 40
the sale to petitioners was made via a notarized document only on October 17, 1991, or ten years thereafter. Even granting that Atty. Sabitsana has ceased to act as the Muertegui family's lawyer, he still owed them his
Thus, Juanito who was the first buyer has a better right to the lot, while the subsequent sale to petitioners is loyalty.1âwphi1The termination of attorney-client relation provides no justification for a lawyer to represent
null and void, because when it was made, the seller Garcia was no longer the owner of the lot. Nemo dat an interest adverse to or in conflict with that of the former client on a matter involving confidential
quod non habet. information which the lawyer acquired when he was counsel. The client's confidence once reposed should
The fact that the sale to Juanito was not notarized does not alter anything, since the sale between him and not be divested by mere expiration of professional employment. 41 This is underscored by the fact that Atty.
Garcia remains valid nonetheless. Notarization, or the requirement of a public document under the Civil Sabitsana obtained information from Carmen which he used to his advantage and to the detriment of his
Code,33 is only for convenience, and not for validity or enforceability.34 And because it remained valid as client.
between Juanito and Garcia, the latter no longer had the right to sell the lot to petitioners, for his ownership from the foregoing disquisition, it can be seen that petitioners are guilty of bad faith in pursuing the sale of
thereof had ceased. the lot despite being apprised of the prior sale in respondent's favor. Moreover, petitioner Atty. Sabitsana
Nor can petitioners’ registration of their purchase have any effect on Juanito’s rights. The mere registration has exhibited a lack of loyalty toward his clients, the Muerteguis, and by his acts, jeopardized their interests
of a sale in one’s favor does not give him any right over the land if the vendor was no longer the owner of instead of protecting them. Over and above the trial court's and the CA's findings, this provides further
the land, having previously sold the same to another even if the earlier sale was unrecorded. 35 Neither could justification for the award of attorney's fees, litigation expenses and costs in favor of the respondent.
it validate the purchase thereof by petitioners, which is null and void. Registration does not vest title; it is Thus said, judgment must be rendered in favor of respondent to prevent the petitioners' void sale from
merely the evidence of such title. Our land registration laws do not give the holder any better title than what casting a cloud upon his valid title.
he actually has.36 WHEREFORE, premises considered, the Petition is DENIED. The January 25, 2007 Decision and the
Specifically, we held in Radiowealth Finance Co. v. Palileo 37 that: January 11, 2008 Resolution of the Court of Appeals in CA-G.R. CV No. 79250 are AFFIRMED. Costs
Under Act No. 3344, registration of instruments affecting unregistered lands is ‘without prejudice to a third against petitioners.
party with a better right.’ The aforequoted phrase has been held by this Court to mean that the mere SO ORDERED.
registration of a sale in one’s favor does not give him any right over the land if the vendor was not anymore
the owner of the land having previously sold the same to somebody else even if the earlier sale was
unrecorded.
Petitioners’ defense of prescription, laches and estoppel are unavailing since their claim is based on a null
and void deed of sale. The fact that the Muerteguis failed to interpose any objection to the sale in
petitioners’ favor does not change anything, nor could it give rise to a right in their favor; their purchase
remains void and ineffective as far as the Muerteguis are concerned.
The award of attorney’s fees and litigation expenses is proper because of petitioners’ bad faith.
Petitioners’ actual and prior knowledge of the first sale to Juanito makes them purchasers in bad faith. It also
appears that petitioner Atty. Sabitsana was remiss in his duties as counsel to the Muertegui family. Instead
of advising the Muerteguis to register their purchase as soon as possible to forestall any legal complications
that accompany unregistered sales of real property, he did exactly the opposite: taking advantage of the
situation and the information he gathered from his inquiries and investigation, he bought the very same lot
and immediately caused the registration thereof ahead of his clients, thinking that his purchase and prior
registration would prevail. The Court cannot tolerate this mercenary attitude. Instead of protecting his
client’s interest, Atty. Sabitsana practically preyed on him.
Petitioner Atty. Sabitsana took advantage of confidential information disclosed to him by his client, using
the same to defeat him and beat him to the draw, so to speak. He rushed the sale and registration thereof
ahead of his client. He may not be afforded the excuse that he nonetheless proceeded to buy the lot because
he believed or assumed that the Muerteguis were simply bluffing when Carmen told him that they had
already bought the same; this is too convenient an excuse to be believed. As the Muertegui family lawyer,
he had no right to take a position, using information disclosed to him in confidence by his client, that would
place him in possible conflict with his duty. He may not, for his own personal interest and benefit, gamble
on his client’s word, believing it at one time and disbelieving it the next. He owed the Muerteguis his
undivided loyalty. He had the duty to protect the client, at all hazards and costs even to himself. 38
Petitioner Atty. Sabitsana is enjoined to "look at any representation situation from the point of view that
there are possible conflicts, and further to think in terms of impaired loyalty, that is, to evaluate if his
representation in any way will impair his loyalty to a client."39

167
 EN BANC
G.R. No. 204603 September 24, 2013
REPUBLIC OF THE G.R. No. 204603 PHILIPPINES, represented by THE EXECUTIVE SECRETARY,
THE SECRETARY OF JUSTICE, THE SECRETARY OF FOREIGN AFFAIRS, THE SECRETARY OF
NATIONALDEFENSE, THE SECRETARY OF THE INTERIOR AND LOCAL GOVERNMENT THE
SECRETARY OF FINANCE, THE NATIONAL SECURITY ADVISER, THE SECRETARY OF
BUDGET AND MANAGEMENT THE TREASURER OF THE PHILIPPINES, THE CHIEF OF STAFF
OF THE ARMED FORCES OF THE PHILIPPINES, and THE CHIEFOF THE PHILIPPINE NATIONAL
POLICE, Petitioners,
vs.
HERMINIO HARRY ROQUE, MORO CHRISTIAN PEOPLE'S ALLIANCE, FR. JOE DIZON, RODINIE
SORIANO, STEPHANIE ABIERA, MARIA LOURDES ALCAIN, VOLTAIRE ALFEREZ, CZARINA
MAYALTEZ, SHERYL BALOT, RENIZZA BATACAN, EDAN MARRI CAÑETE, LEANA
CARAMOAN, ALDWIN CAMANCE, RENE DELORINO, PAULYN MAY DUMAN, RODRIGO
FAJARDO III, ANNAMARIE GO, ANNA ARMINDA JIMENEZ, MARY ANN LEE,LUISA
MANALAYSAY, MIGUEL MUSNGI, MICHAEL OCAMPO, NORMAN ROLAND OCANA III,
WILLIAM RAGAMAT, MARICAR RAMOS, CHERRY LOU REYES, MELISSA ANN SICAT,
CRISTINE MAE TABING, VANESSA TORNO, and HON. JUDGE ELEUTERIO L. BATHAN, as
Presiding Judge of Regional Trial Court, Quezon City, Branch 92, Respondents.
RESOLUTION
PERLAS-BERNABE, J.:
Assailed in this petition for certiorari1 are the April 23, 20122 and July 31, 20123 Orders of the Regional
Trial Court of Quezon City, Branch 92(RTC) in Special Civil Action (SCA) No. Q-07-60778, denying
petitioners’ motion to dismiss (subject motion to dismiss) based on the following grounds: (a) that the Court
had yet to pass upon the constitutionality of Republic Act No. (RA) 9372, 4 otherwise known as the "Human
Security Act of 2007," in the consolidated cases of Southern Hemisphere Engagement Network, Inc. v.
Anti-Terrorism Council5 (Southern Hemisphere); and (b) that private respondents’ petition for declaratory
relief was proper.
The Facts
On July 17, 2007, private respondents filed a Petition 6 for declaratory relief before the RTC, assailing the
constitutionality of the following sections of RA 9372: (a) Section 3, 7 for being void for vagueness;8 (b)
Section 7,9for violating the right to privacy of communication and due process and the privileged nature of
priest-penitent relationships;10 (c)Section 18,11 for violating due process, the prohibition against ex post facto
laws or bills of attainder, the Universal Declaration of Human Rights, and the International Covenant on
Civil and Political Rights, as well as for contradicting Article 125 12 of the Revised Penal Code, as
amended;13 (d) Section 26,14 for violating the right to travel;15 and (e) Section 27,16 for violating the
prohibition against unreasonable searches and seizures. 17
Petitioners moved to suspend the proceedings,18 averring that certain petitions (SC petitions) raising the
issue of RA 9372’s constitutionality have been lodged before the Court. 19 The said motion was granted in an
Order dated October 19, 2007.20
On October 5, 2010, the Court promulgated its Decision 21 in the Southern Hemisphere cases and thereby
dismissed the SC petitions.
On February 27, 2012, petitioners filed the subject motion to dismiss,22 contending that private respondents
failed to satisfy the requisites for declaratory relief. Likewise, they averred that the constitutionality of RA
9372 had already been upheld by the Court in the Southern Hemisphere cases.
In their Comment/Opposition,23 private respondents countered that: (a) the Court did not resolve the issue of
RA 9372’s constitutionality in Southern Hemisphere as the SC petitions were dismissed based purely on
technical grounds; and (b) the requisites for declaratory relief were met.
The RTC Ruling
168
On April 23, 2012, the RTC issued an Order24 which denied the subject motion to dismiss, finding that the
Court did not pass upon the constitutionality of RA 9372 and that private respondents’ petition for
declaratory relief was properly filed.
Petitioners moved for reconsideration25 which was, however, denied by the RTC in an Order dated July 31,
2012.26The RTC observed that private respondents have personal and substantial interests in the case and
that it would be illogical to await the adverse consequences of the aforesaid law’s implementation
considering that the case is of paramount impact to the Filipino people. 27
Hence, the instant petition.
The Issues Before the Court
The present controversy revolves around the issue of whether or not the RTC gravely abused its discretion
when it denied the subject motion to dismiss.
Asserting the affirmative, petitioners argue that private respondents failed to satisfy the requirements for
declaratory relief and that the Court had already sustained with finality the constitutionality of RA 9372.
On the contrary, private respondents maintain that the requirements for declaratory relief have been satisfied
and that the Court has yet to resolve the constitutionality of RA 9372, negating any grave abuse of discretion
on the RTC’s part.
The Court’s Ruling
The petition is meritorious.
An act of a court or tribunal can only be considered as with grave abuse of discretion when such act is done
in a capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. 28 It is well-settled
that the abuse of discretion to be qualified as "grave" must be so patent or gross as to constitute an evasion
of a positive duty or a virtual refusal to perform the duty or to act at all in contemplation of law. 29 In this
relation, case law states that not every error in the proceedings, or every erroneous conclusion of law or fact,
constitutes grave abuse of discretion.30The degree of gravity, as above-described, must be met.
Applying these principles, the Court observes that while no grave abuse of discretion could be ascribed on
the part of the RTC when it found that the Court did not pass upon the constitutionality of RA 9372 in the
Southern Hemisphere cases, it, however, exceeded its jurisdiction when it ruled that private respondents’
petition had met all the requisites for an action for declaratory relief. Consequently, its denial of the subject
motion to dismiss was altogether improper.
To elucidate, it is clear that the Court, in Southern Hemisphere, did not make any definitive ruling on the
constitutionality of RA 9372. The certiorari petitions in those consolidated cases were dismissed based
solely on procedural grounds, namely: (a) the remedy of certiorari was improper; 31 (b) petitioners therein
lack locus standi;32and (c) petitioners therein failed to present an actual case or controversy. 33 Therefore,
there was no grave abuse of discretion.
The same conclusion cannot, however, be reached with regard to the RTC’s ruling on the sufficiency of
private respondents’ petition for declaratory relief.
Case law states that the following are the requisites for an action for declaratory relief:
first , the subject matter of the controversy must be a deed, will, contract or other written instrument, statute,
executive order or regulation, or ordinance; second , the terms of said documents and the validity thereof are
doubtful and require judicial construction; third , there must have been no breach of the documents in
question; fourth , there must be an actual justiciable controversy or the "ripening seeds" of one between
persons whose interests are adverse; fifth , the issue must be ripe for judicial determination; and sixth ,
adequate relief is not available through other means or other forms of action or proceeding. 34
Based on a judicious review of the records, the Court observes that while the first,35 second,36 and
third37requirements appear to exist in this case, the fourth, fifth, and sixth requirements, however, remain
wanting.
As to the fourth requisite, there is serious doubt that an actual justiciable controversy or the "ripening seeds"
of one exists in this case.
Pertinently, a justiciable controversy refers to an existing case or controversy that is appropriate or ripe for WHEREFORE, the petition is GRANTED. Accordingly, the April23, 2012 and July 31, 2012 Orders of the
judicial determination, not one that is conjectural or merely anticipatory.38 Corollary thereto, by "ripening Regional Trial Court of Quezon City, Branch 92 in SCA No. Q-07-60778 are REVERSED and SET ASIDE
seeds" it is meant, not that sufficient accrued facts may be dispensed with, but that a dispute may be tried at and the petition for declaratory relief before the said court is hereby DISMISSED.
its inception before it has accumulated the asperity, distemper, animosity, passion, and violence of a full SO ORDERED.
blown battle that looms ahead. The concept describes a state of facts indicating imminent and inevitable
litigation provided that the issue is not settled and stabilized by tranquilizing declaration. 39
A perusal of private respondents’ petition for declaratory relief would show that they have failed to
demonstrate how they are left to sustain or are in immediate danger to sustain some direct injury as a result
of the enforcement of the assailed provisions of RA 9372. Not far removed from the factual milieu in the
Southern Hemisphere cases, private respondents only assert general interests as citizens, and taxpayers and
infractions which the government could prospectively commit if the enforcement of the said law would
remain untrammeled. As their petition would disclose, private respondents’ fear of prosecution was solely
based on remarks of certain government officials which were addressed to the general public. 40 They,
however, failed to show how these remarks tended towards any prosecutorial or governmental action geared
towards the implementation of RA 9372 against them. In other words, there was no particular, real or
imminent threat to any of them. As held in Southern Hemisphere:
Without any justiciable controversy, the petitions have become pleas for declaratory relief, over which the
Court has no original jurisdiction. Then again, declaratory actions characterized by "double contingency,"
where both the activity the petitioners intend to undertake and the anticipated reaction to it of a public
official are merely theorized, lie beyond judicial review for lack of ripeness.1âwphi1
The possibility of abuse in the implementation of RA 9372does not avail to take the present petitions out of
the realm of the surreal and merely imagined. Such possibility is not peculiar to RA 9372 since the exercise
of any power granted by law may be abused. Allegations of abuse must be anchored on real events before
courts may step in to settle actual controversies involving rights which are legally demandable and
enforceable.41 (Emphasis supplied; citations omitted)
Thus, in the same light that the Court dismissed the SC petitions in the Southern Hemisphere cases on the
basis of, among others, lack of actual justiciable controversy (or the ripening seeds of one), the RTC should
have dismissed private respondents’ petition for declaratory relief all the same.
It is well to note that private respondents also lack the required locus standi to mount their constitutional
challenge against the implementation of the above-stated provisions of RA 9372 since they have not shown
any direct and personal interest in the case.42 While it has been previously held that transcendental public
importance dispenses with the requirement that the petitioner has experienced or is in actual danger of
suffering direct and personal injury,43 it must be stressed that cases involving the constitutionality of penal
legislation belong to an altogether different genus of constitutional litigation.44 Towards this end, compelling
State and societal interests in the proscription of harmful conduct necessitate a closer judicial scrutiny of
locus standi,45 as in this case. To rule otherwise, would be to corrupt the settled doctrine of locus standi, as
every worthy cause is an interest shared by the general public.46
As to the fifth requisite for an action for declaratory relief, neither can it be inferred that the controversy at
hand is ripe for adjudication since the possibility of abuse, based on the above-discussed allegations in
private respondents’ petition, remain highly-speculative and merely theorized.1âwphi1 It is well-settled that
a question is ripe for adjudication when the act being challenged has had a direct adverse effect on the
individual challenging it.47 This private respondents failed to demonstrate in the case at bar.
Finally, as regards the sixth requisite, the Court finds it irrelevant to proceed with a discussion on the
availability of adequate reliefs since no impending threat or injury to the private respondents exists in the
first place.
All told, in view of the absence of the fourth and fifth requisites for an action for declaratory relief, as well
as the irrelevance of the sixth requisite, private respondents’ petition for declaratory relief should have been
dismissed. Thus, by giving due course to the same, it cannot be gainsaid that the RTC gravely abused its
discretion.

169
 EN BANC
G.R. No. 178552 October 5, 2010
SOUTHERN HEMISPHERE ENGAGEMENT NETWORK, INC., on behalf of the South-South Network
(SSN) for Non-State Armed Group Engagement, and ATTY. SOLIMAN M. SANTOS, JR., Petitioners,
vs.
ANTI-TERRORISM COUNCIL, THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE,
THE SECRETARY OF FOREIGN AFFAIRS, THE SECRETARY OF NATIONAL DEFENSE, THE
SECRETARY OF THE INTERIOR AND LOCAL GOVERNMENT, THE SECRETARY OF FINANCE,
THE NATIONAL SECURITY ADVISER, THE CHIEF OF STAFF OF THE ARMED FORCES OF THE
PHILIPPINES, AND THE CHIEF OF THE PHILIPPINE NATIONAL POLICE, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 178554
KILUSANG MAYO UNO (KMU), represented by its Chairperson Elmer Labog, NATIONAL
FEDERATION OF LABOR UNIONS-KILUSANG MAYO UNO (NAFLU-KMU), represented by its
National President Joselito V. Ustarez and Secretary General Antonio C. Pascual, and CENTER FOR
TRADE UNION AND HUMAN RIGHTS, represented by its Executive Director Daisy Arago, Petitioners,
vs.
HON. EDUARDO ERMITA, in his capacity as Executive Secretary, NORBERTO GONZALES, in his
capacity as Acting Secretary of National Defense, HON. RAUL GONZALES, in his capacity as Secretary
of Justice, HON. RONALDO PUNO, in his capacity as Secretary of the Interior and Local Government,
GEN. HERMOGENES ESPERON, in his capacity as AFP Chief of Staff, and DIRECTOR GENERAL
OSCAR CALDERON, in his capacity as PNP Chief of Staff, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 178581
BAGONG ALYANSANG MAKABAYAN (BAYAN), GENERAL ALLIANCE BINDING WOMEN FOR
REFORMS, INTEGRITY, EQUALITY, LEADERSHIP AND ACTION (GABRIELA), KILUSANG
MAGBUBUKID NG PILIPINAS (KMP), MOVEMENT OF CONCERNED CITIZENS FOR CIVIL
LIBERTIES (MCCCL), CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF
GOVERNMENT EMPLOYEES (COURAGE), KALIPUNAN NG DAMAYANG MAHIHIRAP
(KADAMAY), SOLIDARITY OF CAVITE WORKERS, LEAGUE OF FILIPINO STUDENTS (LFS),
ANAKBAYAN, PAMBANSANG LAKAS NG KILUSANG MAMAMALAKAYA (PAMALAKAYA),
ALLIANCE OF CONCERNED TEACHERS (ACT), MIGRANTE, HEALTH ALLIANCE FOR
DEMOCRACY (HEAD), AGHAM, TEOFISTO GUINGONA, JR., DR. BIENVENIDO LUMBERA,
RENATO CONSTANTINO, JR., SISTER MARY JOHN MANANSAN OSB, DEAN CONSUELO PAZ,
ATTY. JOSEFINA LICHAUCO, COL. GERRY CUNANAN (ret.), CARLITOS SIGUION-REYNA, DR.
CAROLINA PAGADUAN-ARAULLO, RENATO REYES, DANILO RAMOS, EMERENCIANA DE
LESUS, RITA BAUA, REY CLARO CASAMBRE, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, in her capacity as President and Commander-in-Chief, EXECUTIVE
SECRETARY EDUARDO ERMITA, DEPARTMENT OF JUSTICE SECRETARY RAUL GONZALES,
DEPARTMENT OF FOREIGN AFFAIRS SECRETARY ALBERTO ROMULO, DEPARTMENT OF
NATIONAL DEFENSE ACTING SECRETARY NORBERTO GONZALES, DEPARTMENT OF
INTERIOR AND LOCAL GOVERNMENT SECRETARY RONALDO PUNO. DEPARTMENT OF
FINANCE SECRETARY MARGARITO TEVES, NATIONAL SECURITY ADVISER NORBERTO
GONZALES, THE NATIONAL INTELLIGENCE COORDINATING AGENCY (NICA), THE
NATIONAL BUREAU OF INVESTIGATION (NBI), THE BUREAU OF IMMIGRATION, THE OFFICE
OF CIVIL DEFENSE, THE INTELLIGENCE SERVICE OF THE ARMED FORCES OF THE
PHILIPPINES (ISAFP), THE ANTI-MONEY LAUNDERING COUNCIL (AMLC), THE PHILIPPINE
CENTER ON TRANSNATIONAL CRIME, THE CHIEF OF THE PHILIPPINE NATIONAL POLICE
170
GEN. OSCAR CALDERON, THE PNP, including its intelligence and investigative elements, AFP CHIEF
GEN. HERMOGENES ESPERON, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 178890
KARAPATAN, ALLIANCE FOR THE ADVANCEMENT OF PEOPLE'S RIGHTS, represented herein by
Dr. Edelina de la Paz, and representing the following organizations: HUSTISYA, represented by Evangeline
Hernandez and also on her own behalf; DESAPARECIDOS, represented by Mary Guy Portajada and also
on her own behalf, SAMAHAN NG MGA EX-DETAINEES LABAN SA DETENSYON AT PARA SA
AMNESTIYA (SELDA), represented by Donato Continente and also on his own behalf, ECUMENICAL
MOVEMENT FOR JUSTICE AND PEACE (EMJP), represented by Bishop Elmer M. Bolocon, UCCP, and
PROMOTION OF CHURCH PEOPLE'S RESPONSE, represented by Fr. Gilbert Sabado,
OCARM, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, in her capacity as President and Commander-in-Chief, EXECUTIVE
SECRETARTY EDUARDO ERMITA, DEPARTMENT OF JUSTICE SECRETARY RAUL GONZALEZ,
DEPARTMENT OF FOREIGN AFFAIRS SECRETARY ALBERTO ROMULO, DEPARTMENT OF
NATIONAL DEFENSE ACTING SECRETARY NORBERTO GONZALES, DEPARTMENT OF
INTERIOR AND LOCAL GOVERNMENT SECRETARY RONALDO PUNO, DEPARTMENT OF
FINANCE SECRETARY MARGARITO TEVES, NATIONAL SECURITY ADVISER NORBERTO
GONZALES, THE NATIONAL INTELLIGENCE COORDINATING AGENCY (NICA), THE
NATIONAL BUREAU OF INVESTIGATION (NBI), THE BUREAU OF IMMIGRATION, THE OFFICE
OF CIVIL DEFENSE, THE INTELLIGENCE SERVICE OF THE ARMED FORCES OF THE
PHILIPPINES (ISAFP), THE ANTI-MONEY LAUNDERING COUNCIL (AMLC), THE PHILIPPINE
CENTER ON TRANSNATIONAL CRIME, THE CHIEF OF THE PHILIPPINE NATIONAL POLICE
GEN. OSCAR CALDERON, THE PNP, including its intelligence and investigative elements, AFP CHIEF
GEN. HERMOGENES ESPERON, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 179157
THE INTEGRATED BAR OF THE PHILIPPINES (IBP), represented by Atty. Feliciano M. Bautista,
COUNSELS FOR THE DEFENSE OF LIBERTY (CODAL), SEN. MA. ANA CONSUELO A.S.
MADRIGAL and FORMER SENATORS SERGIO OSMEÑA III and WIGBERTO E.
TAÑADA, Petitioners,
vs.
EXECUTIVE SECRETARY EDUARDO ERMITA AND THE MEMBERS OF THE ANTI-TERRORISM
COUNCIL (ATC), Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 179461
BAGONG ALYANSANG MAKABAYAN-SOUTHERN TAGALOG (BAYAN-ST), GABRIELA-ST,
KATIPUNAN NG MGA SAMAHYANG MAGSASAKA-TIMOG KATAGALUGAN (KASAMA-TK),
MOVEMENT OF CONCERNED CITIZENS FOR CIVIL LIBERTIES (MCCCL), PEOPLES MARTYRS,
ANAKBAYAN-ST, PAMALAKAYA-ST, CONFEDERATION FOR UNITY, RECOGNITION AND
ADVANCEMENT OF GOVERNMENT EMPLOYEES (COURAGE-ST), PAGKAKAISA'T UGNAYAN
NG MGA MAGBUBUKID SA LAGUNA (PUMALAG), SAMAHAN NG MGA MAMAMAYAN SA
TABING RILES (SMTR-ST), LEAGUE OF FILIPINO STUDENTS (LFS), BAYAN MUNA-ST,
KONGRESO NG MGA MAGBUBUKID PARA SA REPORMANG AGRARYO KOMPRA, BIGKIS AT
LAKAS NG MGA KATUTUBO SA TIMOG KATAGALUGAN (BALATIK), SAMAHAN AT
UGNAYAN NG MGA MAGSASAKANG KABABAIHAN SA TIMOG KATAGALUGAN
(SUMAMAKA-TK), STARTER, LOSÑOS RURAL POOR ORGANIZATION FOR PROGRESS &
EQUALITY, CHRISTIAN NIÑO LAJARA, TEODORO REYES, FRANCESCA B. TOLENTINO,
JANNETTE E. BARRIENTOS, OSCAR T. LAPIDA, JR., DELFIN DE CLARO, SALLY P. ASTRERA,
ARNEL SEGUNE BELTRAN, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, in her capacity as President and Commander-in-Chief, EXECUTIVE
SECRETARY EDUARDO ERMITA, DEPARTMENT OF JUSTICE SECRETARY RAUL GONZALEZ,
DEPARTMENT OF FOREIGN AFFAIRS SECRETARY ALBERTO ROMULO, DEPARTMENT OF
NATIONAL DEFENSE ACTING SECRETARY NORBERTO GONZALES, DEPARTMENT OF
INTERIOR AND LOCAL GOVERNMEN T SECRETARY RONALDO PUNO, DEPARTMENT OF
FINCANCE SECRETARY MARGARITO TEVES, NATIONAL SECURITY ADVISER NORBERTO
GONZALES, THE NATIONAL INTELLIGENCE COORDINATING AGENCY (NICA), THE
NATIONAL BUREAU OF INVESTIGATION (NBI), THE BUREAU OF IMMIGRATION, THE OFFICE
OF CIVIL DEFENSE, THE INTELLIGENCE SERVICE OF THE ARMED FORCES OF THE
PHILIPPINES (ISAFP), THE ANTI-MONEY LAUNDERING COUNCIL (AMLC), THE PHILIPPINE
CENTER ON TRANSNATIONAL CRIME, THE CHIEF OF THE PHILIPPINE NATIONAL POLICE
GEN. OSCAR CALDERON, THE PNP, including its intelligence and investigative elements, AFP CHIEF
GEN. HERMOGENES ESPERON, Respondents.
DECISION
CARPIO MORALES, J.:
Before the Court are six petitions challenging the constitutionality of Republic Act No. 9372 (RA 9372),
"An Act to Secure the State and Protect our People from Terrorism," otherwise known as the Human
Security Act of 2007,1signed into law on March 6, 2007.
Following the effectivity of RA 9372 on July 15, 2007, 2 petitioner Southern Hemisphere Engagement
Network, Inc., a non-government organization, and Atty. Soliman Santos, Jr., a concerned citizen, taxpayer
and lawyer, filed a petition for certiorari and prohibition on July 16, 2007 docketed as G.R. No. 178552. On
even date, petitioners Kilusang Mayo Uno (KMU), National Federation of Labor Unions-Kilusang Mayo
Uno (NAFLU-KMU), and Center for Trade Union and Human Rights (CTUHR), represented by their
respective officers3 who are also bringing the action in their capacity as citizens, filed a petition for certiorari
and prohibition docketed as G.R. No. 178554.
The following day, July 17, 2007, organizations Bagong Alyansang Makabayan (BAYAN), General
Alliance Binding Women for Reforms, Integrity, Equality, Leadership and Action (GABRIELA), Kilusang
Magbubukid ng Pilipinas (KMP), Movement of Concerned Citizens for Civil Liberties (MCCCL),
Confederation for Unity, Recognition and Advancement of Government Employees (COURAGE),
Kalipunan ng Damayang Mahihirap (KADAMAY), Solidarity of Cavite Workers (SCW), League of
Filipino Students (LFS), Anakbayan, Pambansang Lakas ng Kilusang Mamamalakaya (PAMALAKAYA),
Alliance of Concerned Teachers (ACT), Migrante, Health Alliance for Democracy (HEAD), and Agham,
represented by their respective officers,4 and joined by concerned citizens and taxpayers Teofisto Guingona,
Jr., Dr. Bienvenido Lumbera, Renato Constantino, Jr., Sister Mary John Manansan, OSB, Dean Consuelo
Paz, Atty. Josefina Lichauco, Retired Col. Gerry Cunanan, Carlitos Siguion-Reyna, Dr. Carolina Pagaduan-
Araullo, Renato Reyes, Danilo Ramos, Emerenciana de Jesus, Rita Baua and Rey Claro Casambre filed a
petition for certiorari and prohibition docketed as G.R. No. 178581.
On August 6, 2007, Karapatan and its alliance member organizations Hustisya, Desaparecidos, Samahan ng
mga Ex-Detainees Laban sa Detensyon at para sa Amnestiya (SELDA), Ecumenical Movement for Justice
and Peace (EMJP), and Promotion of Church People’s Response (PCPR), which were represented by their
respective officers5who are also bringing action on their own behalf, filed a petition for certiorari and
prohibition docketed as G.R. No. 178890.
On August 29, 2007, the Integrated Bar of the Philippines (IBP), Counsels for the Defense of Liberty
(CODAL),6Senator Ma. Ana Consuelo A.S. Madrigal, Sergio Osmeña III, and Wigberto E. Tañada filed a
petition for certiorari and prohibition docketed as G.R. No. 179157.
171
Bagong Alyansang Makabayan-Southern Tagalog (BAYAN-ST), other regional chapters and organizations
mostly based in the Southern Tagalog Region,7 and individuals8 followed suit by filing on September 19,
2007 a petition for certiorari and prohibition docketed as G.R. No. 179461 that replicates the allegations
raised in the BAYAN petition in G.R. No. 178581.
Impleaded as respondents in the various petitions are the Anti-Terrorism Council9 composed of, at the time
of the filing of the petitions, Executive Secretary Eduardo Ermita as Chairperson, Justice Secretary Raul
Gonzales as Vice Chairperson, and Foreign Affairs Secretary Alberto Romulo, Acting Defense Secretary
and National Security Adviser Norberto Gonzales, Interior and Local Government Secretary Ronaldo Puno,
and Finance Secretary Margarito Teves as members. All the petitions, except that of the IBP, also impleaded
Armed Forces of the Philippines (AFP) Chief of Staff Gen. Hermogenes Esperon and Philippine National
Police (PNP) Chief Gen. Oscar Calderon.
The Karapatan, BAYAN and BAYAN-ST petitions likewise impleaded President Gloria Macapagal-Arroyo
and the support agencies for the Anti-Terrorism Council like the National Intelligence Coordinating Agency,
National Bureau of Investigation, Bureau of Immigration, Office of Civil Defense, Intelligence Service of
the AFP, Anti-Money Laundering Center, Philippine Center on Transnational Crime, and the PNP
intelligence and investigative elements.
The petitions fail.
Petitioners’ resort to certiorari is improper
Preliminarily, certiorari does not lie against respondents who do not exercise judicial or quasi-judicial
functions. Section 1, Rule 65 of the Rules of Court is clear:
Section 1. Petition for certiorari.—When any tribunal, board or officer exercising judicial or quasi-judicial
functionshas 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.
(Emphasis and underscoring supplied)
Parenthetically, petitioners do not even allege with any modicum of particularity how respondents acted
without or in excess of their respective jurisdictions, or with grave abuse of discretion amounting to lack or
excess of jurisdiction.
The impropriety of certiorari as a remedy aside, the petitions fail just the same.
In constitutional litigations, the power of judicial review is limited by four exacting requisites, viz: (a) there
must be an actual case or controversy; (b) petitioners must possess locus standi; (c) the question of
constitutionality must be raised at the earliest opportunity; and (d) the issue of constitutionality must be the
lis mota of the case.10
In the present case, the dismal absence of the first two requisites, which are the most essential, renders the
discussion of the last two superfluous.
Petitioners lack locus standi
Locus standi or legal standing requires a personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for
illumination of difficult constitutional questions.11
Anak Mindanao Party-List Group v. The Executive Secretary12 summarized the rule on locus standi, thus:
Locus standi or legal standing has been defined as a personal and substantial interest in a case such that the
party has sustained or will sustain direct injury as a result of the governmental act that is being challenged.
The gist of the question on standing is whether a party alleges such personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the
court depends for illumination of difficult constitutional questions.
[A] party who assails the constitutionality of a statute must have a direct and personal interest. It must show
not only that the law or any governmental act is invalid, but also that it sustained or is in immediate danger
of sustaining some direct injury as a result of its enforcement, and not merely that it suffers thereby in some
indefinite way. It must show that it has been or is about to be denied some right or privilege to which it is
lawfully entitled or that it is about to be subjected to some burdens or penalties by reason of the statute or act
complained of.
For a concerned party to be allowed to raise a constitutional question, it must show that (1) it has personally
suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government, (2)
the injury is fairly traceable to the challenged action, and (3) the injury is likely to be redressed by a
favorable action. (emphasis and underscoring supplied.)
Petitioner-organizations assert locus standi on the basis of being suspected "communist fronts" by the
government, especially the military; whereas individual petitioners invariably invoke the "transcendental
importance" doctrine and their status as citizens and taxpayers.
While Chavez v. PCGG13 holds that transcendental public importance dispenses with the requirement that
petitioner has experienced or is in actual danger of suffering direct and personal injury, cases involving the
constitutionality of penal legislation belong to an altogether different genus of constitutional litigation.
Compelling State and societal interests in the proscription of harmful conduct, as will later be elucidated,
necessitate a closer judicial scrutiny of locus standi.
Petitioners have not presented any personal stake in the outcome of the controversy. None of them faces any
charge under RA 9372.
KARAPATAN, Hustisya, Desaparecidos, SELDA, EMJP and PCR, petitioners in G.R. No. 178890, allege
that they have been subjected to "close security surveillance by state security forces," their members
followed by "suspicious persons" and "vehicles with dark windshields," and their offices monitored by "men
with military build." They likewise claim that they have been branded as "enemies of the [S]tate."14
Even conceding such gratuitous allegations, the Office of the Solicitor General (OSG) correctly points out
that petitioners have yet to show any connection between the
purported "surveillance" and the implementation of RA 9372.
BAYAN, GABRIELA, KMP, MCCCL, COURAGE, KADAMAY, SCW, LFS, Anakbayan,
PAMALAKAYA, ACT, Migrante, HEAD and Agham, petitioner-organizations in G.R. No. 178581, would
like the Court to take judicial notice of respondents’ alleged action of tagging them as militant organizations
fronting for the Communist Party of the Philippines (CPP) and its armed wing, the National People’s Army
(NPA). The tagging, according to petitioners, is tantamount to the effects of proscription without following
the procedure under the law.15 The petition of BAYAN-ST, et al. in G.R. No. 179461 pleads the same
allegations.
The Court cannot take judicial notice of the alleged "tagging" of petitioners.
Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one of
common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or
uncertain; and (3) it must be known to be within the limits of the jurisdiction of the court. The principal
guide in determining what facts may be assumed to be judicially known is that of notoriety. Hence, it can be
said that judicial notice is limited to facts evidenced by public records and facts of general notoriety.
Moreover, a judicially noticed fact must be one not subject to a reasonable dispute in that it is either: (1)
generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready
determination by resorting to sources whose accuracy cannot reasonably be questionable.
Things of "common knowledge," of which courts take judicial matters coming to the knowledge of men
generally in the course of the ordinary experiences of life, or they may be matters which are generally
accepted by mankind as true and are capable of ready and unquestioned demonstration. Thus, facts which
are universally known, and which may be found in encyclopedias, dictionaries or other publications, are
judicially noticed, provided, they are of such universal notoriety and so generally understood that they may
be regarded as forming part of the common knowledge of every person. As the common knowledge of man
ranges far and wide, a wide variety of particular facts have been judicially noticed as being matters of
common knowledge. But a court cannot take judicial notice of any fact which, in part, is dependent on the
172
existence or non-existence of a fact of which the court has no constructive knowledge. 16 (emphasis and
underscoring supplied.)
No ground was properly established by petitioners for the taking of judicial notice. Petitioners’ apprehension
is insufficient to substantiate their plea. That no specific charge or proscription under RA 9372 has been
filed against them, three years after its effectivity, belies any claim of imminence of their perceived threat
emanating from the so-called tagging.
The same is true with petitioners KMU, NAFLU and CTUHR in G.R. No. 178554, who merely harp as well
on their supposed "link" to the CPP and NPA. They fail to particularize how the implementation of specific
provisions of RA 9372 would result in direct injury to their organization and members.
While in our jurisdiction there is still no judicially declared terrorist organization, the United States of
America17 (US) and the European Union18 (EU) have both classified the CPP, NPA and Abu Sayyaf Group
as foreign terrorist organizations. The Court takes note of the joint statement of Executive Secretary
Eduardo Ermita and Justice Secretary Raul Gonzales that the Arroyo Administration would adopt the US
and EU classification of the CPP and NPA as terrorist organizations.19 Such statement notwithstanding,
there is yet to be filed before the courts an application to declare the CPP and NPA organizations as
domestic terrorist or outlawed organizations under RA 9372. Again, RA 9372 has been in effect for three
years now. From July 2007 up to the present, petitioner-organizations have conducted their activities fully
and freely without any threat of, much less an actual, prosecution or proscription under RA 9372.
Parenthetically, the Fourteenth Congress, in a resolution initiated by Party-list Representatives Saturnino
Ocampo, Teodoro Casiño, Rafael Mariano and Luzviminda Ilagan, 20 urged the government to resume peace
negotiations with the NDF by removing the impediments thereto, one of which is the adoption of
designation of the CPP and NPA by the US and EU as foreign terrorist organizations. Considering the policy
statement of the Aquino Administration21 of resuming peace talks with the NDF, the government is not
imminently disposed to ask for the judicial proscription of the CPP-NPA consortium and its allied
organizations.
More important, there are other parties not before the Court with direct and specific interests in the questions
being raised.22 Of recent development is the filing of the first case for proscription under Section 1723 of RA
9372 by the Department of Justice before the Basilan Regional Trial Court against the Abu Sayyaf
Group.24 Petitioner-organizations do not in the least allege any link to the Abu Sayyaf Group.
Some petitioners attempt, in vain though, to show the imminence of a prosecution under RA 9372 by
alluding to past rebellion charges against them.
In Ladlad v. Velasco,25 the Court ordered the dismissal of rebellion charges filed in 2006 against then Party-
List Representatives Crispin Beltran and Rafael Mariano of Anakpawis, Liza Maza of GABRIELA, and Joel
Virador, Teodoro Casiño and Saturnino Ocampo of Bayan Muna. Also named in the dismissed rebellion
charges were petitioners Rey Claro Casambre, Carolina Pagaduan-Araullo, Renato Reyes, Rita Baua,
Emerencia de Jesus and Danilo Ramos; and accused of being front organizations for the Communist
movement were petitioner-organizations KMU, BAYAN, GABRIELA, PAMALAKAYA, KMP,
KADAMAY, LFS and COURAGE.26
The dismissed rebellion charges, however, do not save the day for petitioners. For one, those charges
were filed in 2006, prior to the enactment of RA 9372, and dismissed by this Court. For another, rebellion is
defined and punished under the Revised Penal Code. Prosecution for rebellion is not made more imminent
by the enactment of RA 9372, nor does the enactment thereof make it easier to charge a person with
rebellion, its elements not having been altered.
Conversely, previously filed but dismissed rebellion charges bear no relation to prospective charges under
RA 9372. It cannot be overemphasized that three years after the enactment of RA 9372, none of petitioners
has been charged.
Petitioners IBP and CODAL in G.R. No. 179157 base their claim of locus standi on their sworn duty to
uphold the Constitution. The IBP zeroes in on Section 21 of RA 9372 directing it to render assistance to
those arrested or detained under the law.
The mere invocation of the duty to preserve the rule of law does not, however, suffice to clothe the IBP or
any of its members with standing.27 The IBP failed to sufficiently demonstrate how its mandate under the
assailed statute revolts against its constitutional rights and duties. Moreover, both the IBP and CODAL have
not pointed to even a single arrest or detention effected under RA 9372.
Former Senator Ma. Ana Consuelo Madrigal, who claims to have been the subject of "political
surveillance," also lacks locus standi. Prescinding from the veracity, let alone legal basis, of the claim of
"political surveillance," the Court finds that she has not shown even the slightest threat of being charged
under RA 9372. Similarly lacking in locus standi are former Senator Wigberto Tañada and Senator Sergio
Osmeña III, who cite their being respectively a human rights advocate and an oppositor to the passage of RA
9372. Outside these gratuitous statements, no concrete injury to them has been pinpointed.
Petitioners Southern Hemisphere Engagement Network and Atty. Soliman Santos Jr. in G.R. No. 178552
also conveniently state that the issues they raise are of transcendental importance, "which must be settled
early" and are of "far-reaching implications," without mention of any specific provision of RA 9372 under
which they have been charged, or may be charged. Mere invocation of human rights advocacy has nowhere
been held sufficient to clothe litigants with locus standi. Petitioners must show an actual, or immediate
danger of sustaining, direct injury as a result of the law’s enforcement. To rule otherwise would be to
corrupt the settled doctrine of locus standi, as every worthy cause is an interest shared by the general public.
Neither can locus standi be conferred upon individual petitioners as taxpayers and citizens. A taxpayer suit
is proper only when there is an exercise of the spending or taxing power of Congress, 28 whereas citizen
standing must rest on direct and personal interest in the proceeding.29
RA 9372 is a penal statute and does not even provide for any appropriation from Congress for its
implementation, while none of the individual petitioner-citizens has alleged any direct and personal interest
in the implementation of the law.
It bears to stress that generalized interests, albeit accompanied by the assertion of a public right, do not
establish locus standi. Evidence of a direct and personal interest is key.
Petitioners fail to present an actual case or controversy
By constitutional fiat, judicial power operates only when there is an actual case or controversy.
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.30(emphasis and underscoring supplied.)
As early as Angara v. Electoral Commission,31 the Court ruled that the power of judicial review is limited to
actual cases or controversies to be exercised after full opportunity of argument by the parties. Any attempt at
abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to
actualities.
An actual case or controversy means an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory, lest the decision of the court would amount to an advisory
opinion.32
Information Technology Foundation of the Philippines v. COMELEC 33 cannot be more emphatic:
[C]ourts do not sit to adjudicate mere academic questions to satisfy scholarly interest, however intellectually
challenging. The controversy must be justiciable—definite and concrete, touching on the legal relations of
parties having adverse legal interests. In other words, the pleadings must show an active antagonistic
assertion of a legal right, on the one hand, and a denial thereof on the other hand; that is, it must concern a
real and not merely a theoretical question or issue. There ought to be an actual and substantial
controversy admitting of specific relief through a decree conclusive in nature, as distinguished from an
opinion advising what the law would be upon a hypothetical state of facts. (Emphasis and underscoring
supplied)
173
Thus, a petition to declare unconstitutional a law converting the Municipality of Makati into a Highly
Urbanized City was held to be premature as it was tacked on uncertain, contingent events. 34 Similarly, a
petition that fails to allege that an application for a license to operate a radio or television station has been
denied or granted by the authorities does not present a justiciable controversy, and merely wheedles the
Court to rule on a hypothetical problem.35
The Court dismissed the petition in Philippine Press Institute v. Commission on Elections 36 for failure to cite
any specific affirmative action of the Commission on Elections to implement the assailed resolution. It
refused, in Abbas v. Commission on Elections, 37 to rule on the religious freedom claim of the therein
petitioners based merely on a perceived potential conflict between the provisions of the Muslim Code and
those of the national law, there being no actual controversy between real litigants.
The list of cases denying claims resting on purely hypothetical or anticipatory grounds goes on ad infinitum.
The Court is not unaware that a reasonable certainty of the occurrence of a perceived threat to any
constitutional interest suffices to provide a basis for mounting a constitutional challenge. This, however, is
qualified by the requirement that there must be sufficient facts to enable the Court to intelligently adjudicate
the issues.38
Very recently, the US Supreme Court, in Holder v. Humanitarian Law Project, 39 allowed the pre-
enforcement review of a criminal statute, challenged on vagueness grounds, since plaintiffs faced a "credible
threat of prosecution" and "should not be required to await and undergo a criminal prosecution as the sole
means of seeking relief."40 The plaintiffs therein filed an action before a federal court to assail the
constitutionality of the material support statute, 18 U.S.C. §2339B (a) (1), 41 proscribing the provision of
material support to organizations declared by the Secretary of State as foreign terrorist organizations. They
claimed that they intended to provide support for the humanitarian and political activities of two such
organizations.
Prevailing American jurisprudence allows an adjudication on the merits when an anticipatory petition
clearly shows that the challenged prohibition forbids the conduct or activity that a petitioner seeks to do, as
there would then be a justiciable controversy.42
Unlike the plaintiffs in Holder, however, herein petitioners have failed to show that the challenged
provisions of RA 9372 forbid constitutionally protected conduct or activity that they seek to do. No
demonstrable threat has been established, much less a real and existing one.
Petitioners’ obscure allegations of sporadic "surveillance" and supposedly being tagged as "communist
fronts" in no way approximate a credible threat of prosecution. From these allegations, the Court is being
lured to render an advisory opinion, which is not its function. 43
Without any justiciable controversy, the petitions have become pleas for declaratory relief, over which the
Court has no original jurisdiction. Then again, declaratory actions characterized by "double contingency,"
where both the activity the petitioners intend to undertake and the anticipated reaction to it of a public
official are merely theorized, lie beyond judicial review for lack of ripeness. 44
The possibility of abuse in the implementation of RA 9372 does not avail to take the present petitions out of
the realm of the surreal and merely imagined. Such possibility is not peculiar to RA 9372 since the exercise
of any power granted by law may be abused.45 Allegations of abuse must be anchored on real events before
courts may step in to settle actual controversies involving rights which are legally demandable and
enforceable.
A facial invalidation of a statute is allowed only in free speech cases, wherein certain rules of constitutional
litigation are rightly excepted
Petitioners assail for being intrinsically vague and impermissibly broad the definition of the crime of
terrorism46under RA 9372 in that terms like "widespread and extraordinary fear and panic among the
populace" and "coerce the government to give in to an unlawful demand" are nebulous, leaving law
enforcement agencies with no standard to measure the prohibited acts.
Respondents, through the OSG, counter that the doctrines of void-for-vagueness and overbreadth find no
application in the present case since these doctrines apply only to free speech cases; and that RA 9372
regulates conduct, not speech.
For a jurisprudentially guided understanding of these doctrines, it is imperative to outline the schools of
thought on whether the void-for-vagueness and overbreadth doctrines are equally applicable grounds to
assail a penal statute.
Respondents interpret recent jurisprudence as slanting toward the idea of limiting the application of the two
doctrines to free speech cases. They particularly cite Romualdez v. Hon. Sandiganbayan 47 and Estrada v.
Sandiganbayan.48
The Court clarifies.
At issue in Romualdez v. Sandiganbayan was whether the word "intervene" in Section 549 of the Anti-Graft
and Corrupt Practices Act was intrinsically vague and impermissibly broad. The Court stated that "the
overbreadth and the vagueness doctrines have special application only to free-speech cases," and are "not
appropriate for testing the validity of penal statutes."50 It added that, at any rate, the challenged provision,
under which the therein petitioner was charged, is not vague. 51
While in the subsequent case of Romualdez v. Commission on Elections,52 the Court stated that a facial
invalidation of criminal statutes is not appropriate, it nonetheless proceeded to conduct a vagueness analysis,
and concluded that the therein subject election offense53 under the Voter’s Registration Act of 1996, with
which the therein petitioners were charged, is couched in precise language.54
The two Romualdez cases rely heavily on the Separate Opinion55 of Justice Vicente V. Mendoza in
the Estradacase, where the Court found the Anti-Plunder Law (Republic Act No. 7080) clear and free from
ambiguity respecting the definition of the crime of plunder.
The position taken by Justice Mendoza in Estrada relates these two doctrines to the concept of a "facial"
invalidation as opposed to an "as-applied" challenge. He basically postulated that allegations that a penal
statute is vague and overbroad do not justify a facial review of its validity. The pertinent portion of the
Concurring Opinion of Justice Mendoza, which was quoted at length in the main Estrada decision, reads:
A facial challenge is allowed to be made to a vague statute and to one which is overbroad because of
possible "chilling effect" upon protected speech. The theory is that "[w]hen statutes regulate or proscribe
speech and no readily apparent construction suggests itself as a vehicle for rehabilitating the statutes in a
single prosecution, the transcendent value to all society of constitutionally protected expression is deemed to
justify allowing attacks on overly broad statutes with no requirement that the person making the attack
demonstrate that his own conduct could not be regulated by a statute drawn with narrow specificity." The
possible harm to society in permitting some unprotected speech to go unpunished is outweighed by the
possibility that the protected speech of others may be deterred and perceived grievances left to fester
because of possible inhibitory effects of overly broad statutes.
This rationale does not apply to penal statutes. Criminal statutes have general in terrorem effect resulting
from their very existence, and, if facial challenge is allowed for this reason alone, the State may well be
prevented from enacting laws against socially harmful conduct. In the area of criminal law, the law cannot
take chances as in the area of free speech.
The overbreadth and vagueness doctrines then have special application only to free speech cases. They are
inapt for testing the validity of penal statutes. As the U.S. Supreme Court put it, in an opinion by Chief
Justice Rehnquist, "we have not recognized an 'overbreadth' doctrine outside the limited context of the First
Amendment." In Broadrick v. Oklahoma, the Court ruled that "claims of facial overbreadth have been
entertained in cases involving statutes which, by their terms, seek to regulate only spoken words" and, again,
that "overbreadth claims, if entertained at all, have been curtailed when invoked against ordinary criminal
laws that are sought to be applied to protected conduct." For this reason, it has been held that "a facial
challenge to a legislative act is the most difficult challenge to mount successfully, since the challenger must
establish that no set of circumstances exists under which the Act would be valid." As for the vagueness
doctrine, it is said that a litigant may challenge a statute on its face only if it is vague in all its possible
174
applications. "A plaintiff who engages in some conduct that is clearly proscribed cannot complain of the
vagueness of the law as applied to the conduct of others."
In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed for testing
"on their faces" statutes in free speech cases or, as they are called in American law, First Amendment cases.
They cannot be made to do service when what is involved is a criminal statute. With respect to such statute,
the established rule is that "one to whom application of a statute is constitutional will not be heard to attack
the statute on the ground that impliedly it might also be taken as applying to other persons or other situations
in which its application might be unconstitutional." As has been pointed out, "vagueness challenges in the
First Amendment context, like overbreadth challenges typically produce facial invalidation, while statutes
found vague as a matter of due process typically are invalidated [only] 'as applied' to a particular defendant."
Consequently, there is no basis for petitioner's claim that this Court review the Anti-Plunder Law on its face
and in its entirety.
Indeed, "on its face" invalidation of statutes results in striking them down entirely on the ground that they
might be applied to parties not before the Court whose activities are constitutionally protected. It constitutes
a departure from the case and controversy requirement of the Constitution and permits decisions to be made
without concrete factual settings and in sterile abstract contexts. But, as the U.S. Supreme Court pointed out
in Younger v. Harris
[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these
deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The
combination of the relative remoteness of the controversy, the impact on the legislative process of the relief
sought, and above all the speculative and amorphous nature of the required line-by-line analysis of detailed
statutes, . . . ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional
questions, whichever way they might be decided.
For these reasons, "on its face" invalidation of statutes has been described as "manifestly strong medicine,"
to be employed "sparingly and only as a last resort," and is generally disfavored. In determining the
constitutionality of a statute, therefore, its provisions which are alleged to have been violated in a case must
be examined in the light of the conduct with which the defendant is charged.56 (Underscoring supplied.)
The confusion apparently stems from the interlocking relation of the overbreadth and vagueness doctrines as
grounds for a facial or as-applied challenge against a penal statute (under a claim of violation of due process
of law) or a speech regulation (under a claim of abridgement of the freedom of speech and cognate rights).
To be sure, the doctrine of vagueness and the doctrine of overbreadth do not operate on the same plane.
A statute or act suffers from the defect of vagueness when it lacks comprehensible standards that men of
common intelligence must necessarily guess at its meaning and differ as to its application. It is repugnant to
the Constitution in two respects: (1) it violates due process for failure to accord persons, especially the
parties targeted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion
in carrying out its provisions and becomes an arbitrary flexing of the Government
muscle.57 The overbreadth doctrine, meanwhile, decrees that a governmental purpose to control or prevent
activities constitutionally subject to state regulations may not be achieved by means which sweep
unnecessarily broadly and thereby invade the area of protected freedoms. 58
As distinguished from the vagueness doctrine, the overbreadth doctrine assumes that individuals will
understand what a statute prohibits and will accordingly refrain from that behavior, even though some of it
is protected.59
A "facial" challenge is likewise different from an "as-applied" challenge.
Distinguished from an as-applied challenge which considers only extant facts affecting real litigants,
a facialinvalidation is an examination of the entire law, pinpointing its flaws and defects, not only on the
basis of its actual operation to the parties, but also on the assumption or prediction that its very existence
may cause others not before the court to refrain from constitutionally protected speech or activities. 60
Justice Mendoza accurately phrased the subtitle61 in his concurring opinion that the vagueness and
overbreadth doctrines, as grounds for a facial challenge, are not applicable to penal laws. A litigant cannot
thus successfully mount a facial challenge against a criminal statute on either vagueness or overbreadth
grounds.
The allowance of a facial challenge in free speech cases is justified by the aim to avert the "chilling effect"
on protected speech, the exercise of which should not at all times be abridged. 62 As reflected earlier, this
rationale is inapplicable to plain penal statutes that generally bear an "in terrorem effect" in deterring
socially harmful conduct. In fact, the legislature may even forbid and penalize acts formerly considered
innocent and lawful, so long as it refrains from diminishing or dissuading the exercise of constitutionally
protected rights.63
The Court reiterated that there are "critical limitations by which a criminal statute may be challenged" and
"underscored that an ‘on-its-face’ invalidation of penal statutes x x x may not be allowed."64
[T]he rule established in our jurisdiction is, only statutes on free speech, religious freedom, and other
fundamental rights may be facially challenged. Under no case may ordinary penal statutes be subjected to a
facial challenge. The rationale is obvious. If a facial challenge to a penal statute is permitted, the prosecution
of crimes may be hampered. No prosecution would be possible. A strong criticism against employing a
facial challenge in the case of penal statutes, if the same is allowed, would effectively go against the grain of
the doctrinal requirement of an existing and concrete controversy before judicial power may be
appropriately exercised. A facial challenge against a penal statute is, at best, amorphous and speculative. It
would, essentially, force the court to consider third parties who are not before it. As I have said in my
opposition to the allowance of a facial challenge to attack penal statutes, such a test will impair the State’s
ability to deal with crime. If warranted, there would be nothing that can hinder an accused from defeating
the State’s power to prosecute on a mere showing that, as applied to third parties, the penal statute is vague
or overbroad, notwithstanding that the law is clear as applied to him. 65 (Emphasis and underscoring
supplied)
It is settled, on the other hand, that the application of the overbreadth doctrine is limited to a facial kind of
challenge and, owing to the given rationale of a facial challenge, applicable only to free speech cases.
By its nature, the overbreadth doctrine has to necessarily apply a facial type of invalidation in order to plot
areas of protected speech, inevitably almost always under situations not before the court, that are
impermissibly swept by the substantially overbroad regulation. Otherwise stated, a statute cannot be
properly analyzed for being substantially overbroad if the court confines itself only to facts as applied to the
litigants.
The most distinctive feature of the overbreadth technique is that it marks an exception to some of the usual
rules of constitutional litigation. Ordinarily, a particular litigant claims that a statute is unconstitutional as
applied to him or her; if the litigant prevails, the courts carve away the unconstitutional aspects of the law by
invalidating its improper applications on a case to case basis. Moreover, challengers to a law are not
permitted to raise the rights of third parties and can only assert their own interests. In overbreadth analysis,
those rules give way; challenges are permitted to raise the rights of third parties; and the court invalidates
the entire statute "on its face," not merely "as applied for" so that the overbroad law becomes unenforceable
until a properly authorized court construes it more narrowly. The factor that motivates courts to depart from
the normal adjudicatory rules is the concern with the "chilling;" deterrent effect of the overbroad statute on
third parties not courageous enough to bring suit. The Court assumes that an overbroad law’s "very
existence may cause others not before the court to refrain from constitutionally protected speech or
expression." An overbreadth ruling is designed to remove that deterrent effect on the speech of those third
parties.66 (Emphasis in the original omitted; underscoring supplied.)
In restricting the overbreadth doctrine to free speech claims, the Court, in at least two cases, 67 observed that
the US Supreme Court has not recognized an overbreadth doctrine outside the limited context of the First
Amendment,68and that claims of facial overbreadth have been entertained in cases involving statutes which,
by their terms, seek to regulate only spoken words.69 In Virginia v. Hicks,70 it was held that rarely, if ever,
will an overbreadth challenge succeed against a law or regulation that is not specifically addressed
175
to speech or speech-related conduct. Attacks on overly broad statutes are justified by the "transcendent value
to all society of constitutionally protected expression."71
Since a penal statute may only be assailed for being vague as applied to petitioners, a limited vagueness
analysis of the definition of "terrorism" in RA 9372 is legally impermissible absent an actual or imminent
chargeagainst them
While Estrada did not apply the overbreadth doctrine, it did not preclude the operation of the vagueness test
on the Anti-Plunder Law as applied to the therein petitioner, finding, however, that there was no basis to
review the law "on its face and in its entirety."72 It stressed that "statutes found vague as a matter of due
process typically are invalidated only 'as applied' to a particular defendant."73
American jurisprudence74 instructs that "vagueness challenges that do not involve the First Amendment
must be examined in light of the specific facts of the case at hand and not with regard to the statute's facial
validity."
For more than 125 years, the US Supreme Court has evaluated defendants’ claims that criminal statutes are
unconstitutionally vague, developing a doctrine hailed as "among the most important guarantees of liberty
under law."75
In this jurisdiction, the void-for-vagueness doctrine asserted under the due process clause has been utilized
in examining the constitutionality of criminal statutes. In at least three cases,76 the Court brought the
doctrine into play in analyzing an ordinance penalizing the non-payment of municipal tax on fishponds, the
crime of illegal recruitment punishable under Article 132(b) of the Labor Code, and the vagrancy provision
under Article 202 (2) of the Revised Penal Code. Notably, the petitioners in these three cases, similar to
those in the two Romualdez and Estrada cases, were actually charged with the therein assailed penal statute,
unlike in the present case.
There is no merit in the claim that RA 9372 regulates speech so as to permit a facial analysis of its validity
From the definition of the crime of terrorism in the earlier cited Section 3 of RA 9372, the following
elements may be culled: (1) the offender commits an act punishable under any of the cited provisions of the
Revised Penal Code, or under any of the enumerated special penal laws; (2) the commission of the predicate
crime sows and creates a condition of widespread and extraordinary fear and panic among the populace; and
(3) the offender is actuated by the desire to coerce the government to give in to an unlawful demand.
In insisting on a facial challenge on the invocation that the law penalizes speech, petitioners contend that the
element of "unlawful demand" in the definition of terrorism77 must necessarily be transmitted through some
form of expression protected by the free speech clause.
The argument does not persuade. What the law seeks to penalize is conduct, not speech.
Before a charge for terrorism may be filed under RA 9372, there must first be a predicate crime actually
committed to trigger the operation of the key qualifying phrases in the other elements of the crime, including
the coercion of the government to accede to an "unlawful demand." Given the presence of the first element,
any attempt at singling out or highlighting the communicative component of the prohibition cannot
recategorize the unprotected conduct into a protected speech.
Petitioners’ notion on the transmission of message is entirely inaccurate, as it unduly focuses on just one
particle of an element of the crime. Almost every commission of a crime entails some mincing of words on
the part of the offender like in declaring to launch overt criminal acts against a victim, in haggling on the
amount of ransom or conditions, or in negotiating a deceitful transaction. An analogy in one U.S.
case78 illustrated that the fact that the prohibition on discrimination in hiring on the basis of race will require
an employer to take down a sign reading "White Applicants Only" hardly means that the law should be
analyzed as one regulating speech rather than conduct.
Utterances not elemental but inevitably incidental to the doing of the criminal conduct alter neither the intent
of the law to punish socially harmful conduct nor the essence of the whole act as conduct and not speech.
This holds true a fortiori in the present case where the expression figures only as an inevitable incident of
making the element of coercion perceptible.
[I]t is true that the agreements and course of conduct here were as in most instances brought about through
speaking or writing. But it has never been deemed an abridgement of freedom of speech or press to make a
course of conduct illegal merely because the conduct was, in part, initiated, evidenced, or carried out by
means of language, either spoken, written, or printed. Such an expansive interpretation of the constitutional
guaranties of speech and press would make it practically impossible ever to enforce laws against agreements
in restraint of trade as well as many other agreements and conspiracies deemed injurious to society. 79 (italics
and underscoring supplied)
Certain kinds of speech have been treated as unprotected conduct, because they merely evidence a
prohibited conduct.80 Since speech is not involved here, the Court cannot heed the call for a facial
analysis.1avvphi1
IN FINE, Estrada and the other cited authorities engaged in a vagueness analysis of the therein subject penal
statute as applied to the therein petitioners inasmuch as they were actually charged with the pertinent crimes
challenged on vagueness grounds. The Court in said cases, however, found no basis to review the assailed
penal statute on its face and in its entirety.
In Holder, on the other hand, the US Supreme Court allowed the pre-enforcement review of a criminal
statute, challenged on vagueness grounds, since the therein plaintiffs faced a "credible threat of prosecution"
and "should not be required to await and undergo a criminal prosecution as the sole means of seeking relief."
As earlier reflected, petitioners have established neither an actual charge nor a credible threat of
prosecution under RA 9372. Even a limited vagueness analysis of the assailed definition of "terrorism" is
thus legally impermissible. The Court reminds litigants that judicial power neither contemplates speculative
counseling on a statute’s future effect on hypothetical scenarios nor allows the courts to be used as an
extension of a failed legislative lobbying in Congress.
WHEREFORE, the petitions are DISMISSED.
SO ORDERED.

176
 SECOND DIVISION
G.R. No. 209331, August 24, 2015
DEPARTMENT OF FINANCE, REPRESENTED BY HON. CESAR V. PURISIMA IN HIS
OFFICIAL CAPACITY AS SECRETARY, AND THE BUREAU OF CUSTOMS, REPRESENTED
BY HON. ROZZANO RUFINO B. BIAZON, IN HIS OFFICIAL CAPACITY AS COMMISSIONER
OF CUSTOMS, Petitioners, v. HON. MARINO M. DELA CRUZ, JR., IN HIS CAPACITY AS
EXECUTIVE JUDGE, REGIONAL TRIAL COURT, MANILA, HON. FELICITAS O. LARON-
CACANINDIN, IN HER CAPACITY AS PRESIDING JUDGE, REGIONAL TRIAL COURT,
MANILA, BRANCH 17, RONNIE C. SILVESTRE, EDWARD P. DELA CUESTA, ROGEL C.
GATCHALIAN, IMELDA D.CRUZ, LILIBETH S. SANDAG, RAYMOND P. VENTURA, MA.
LIZA S. TORRES, ARNEL C. ALCARAZ, MA. LOURDES V. MANGAOANG, FRANCIS
AGUSTIN Y. ERPE, CARLOS T. SO, MARIETTA D. ZAMORANOS, CARMELITA M.
TALUSAN,1] AREFILES H. CARREON,2] AND ROMALINO G. VALDEZ, Respondents.
DECISION
CARPIO, J.:
The Case
Petitioners assail the Order dated 4 October 20133 issued by Judge Felicitas O. Laron-Cacanindin (Judge
Laron-Cacanindin) of the Regional Trial Court of Manila, Branch 17 (RTC Branch 17), in Civil Case No.
13-130820. The Order extended the 72-hour Temporary Restraining Order (TRO) issued by Executive
Judge Marino M. Dela Cruz, Jr. (Executive Judge Dela Cruz) in favor of respondents Silvestre, et al.4 to 20
days or until 21 October 2013 without need of posting bond.
The Antecedent Facts
The case stemmed from the issuance of Executive Order No. 140 (EO 140) on 2 September 2013, which
created the Customs Policy Research Office (CPRO) in the Department of Finance (DOF). EO 140 states
that the CPRO "shall be responsible for reviewing the customs administration policies, rules and procedures,
and thereafter providing sound recommendations for the improvement of the same." Section 3 of EO 140
provides that "CPRO shall be composed of its organic personnel, as approved by the Department of Budget
and Management (DBM) upon recommendation of the DOF Secretary, augmented and reinforced by DOF
and BOC personnel as well as those detailed or seconded from other agencies, whether attached to the DOF
or not. x x x." Section 9 of EO 140 states that it shall "take effect immediately upon publication in two (2)
newspapers of general circulation." EO 140 was published in Manila Bulletin and Philippine Star on 17
September 2013.
On the same day of the publication of EO 140, Bureau of Customs (BOC) Commissioner Rozzano Rufino
B. Biazon (Commissioner Biazon) issued Customs Personnel Order No. B-189-2013 (CPO 189-2013)
detailing 27 BOC personnel holding the positions of Collector of Customs V and VI, including respondents
in this case, to CPRO "effective immediately and valid until sooner revoked." CPO 189-2013 was approved
by DOF Secretary Cesar V. Purisima (Secretary Purisima).
On 30 September 2013, respondents filed an action for Declaratory Relief with Application for Temporary
Restraining Order and/or Writ of Preliminary Injunction before the Regional Trial Court (RTC) of Manila.
On 1 October 2013, Executive Judge Dela Cruz issued a TRO for a period of 72 hours enjoining petitioners
177
or any person acting for and in their behalf from implementing CPO 189-2013. Thereafter, the case was
raffled to the sala of Judge Laron-Cacanindin.
In the assailed Order of 4 October 2013, Judge Laron-Cacanindin extended Executive Judge Dela Cruz's 72-
hour TRO for 20 days or until 21 October 2013. She then set the hearing for the issuance of a preliminary
injunction on 18 October 2013.
On 21 October 2013, petitioners filed a Petition for Certiorari and Prohibition before this Court, with prayer
for the issuance of a TRO or a writ of preliminary mandatory injunction. Petitioners alleged that the case
involves personnel action affecting public officers which is under the exclusive jurisdiction of the Civil
Service Commission (CSC). Petitioners also alleged that respondents failed to exhaust all administrative
remedies available to them before filing the petition before the RTC. Petitioners also alleged that CPO 189-
2013 is an internal personnel order with application that is limited to and only within BOC and as such, it
cannot be the subject of an action for declaratory relief.
In their Comment, respondents alleged that the case involves the validity and constitutionality of CPO 189-
2013, and thus, it is beyond the jurisdiction of the CSC. Respondents further alleged that EO 140 violated
Article 2 of the Civil Code when it became effective immediately after its publication.
In their Reply, petitioners alleged that respondents only assailed the validity of EO 140 to justify their filing
of an action for declaratory relief. As regards its effectivity, petitioners alleged that EO 140 states that it
shall "take effect immediately upon publication in two (2) newspapers of general circulation."
In an Order dated 21 October 2013, Judge Laron-Cacanindin denied respondents' application for the
issuance of a writ of preliminary injunction.
In an Order dated 5 November 2013, Judge Laron-Cacanindin inhibited herself from further hearing the
case.
The Issues
The issues for determination by this Court are the following:cralawlawlibrary
1. Whether the RTC has jurisdiction over the action for declaratory relief filed by respondents;
2. Whether respondents failed to exhaust administrative remedies in filing the action before the RTC;
3. Whether EO 140 violated Article 2 of the Civil Code when it became effective immediately after
its publication; and
4. Whether CPO 189-2013 was validly issued.
The Ruling of this Court
Jurisdiction over the Petition
The CSC has jurisdiction over all employees of government branches, subdivisions, instrumentalities, and
agencies, including government-owned or controlled corporations with original charters. 5 The CSC is the
sole arbiter of controversies relating to the civil service.6 The rule is that disciplinary cases and cases
involving personnel actions, including "appointment through certification, promotion, transfer,
reinstatement, reemployment, detail, reassignment, demotion, and separation," are within the exclusive
jurisdiction of the CSC.7 This rule is embodied in Section 1, Rule V of the Omnibus Rules Implementing
Book V of Executive Order No. 292 and Other Pertinent Civil Service Laws (Omnibus Rules) which
states:cralawlawlibrary
SECTION 1. x x x.
As used in these Rules, any action denoting movement or progress of personnel in the civil service shall be
known as personnel action. Such action shall include promotion, transfer, reinstatement, reemployment,
detail, secondment, reassignment, demotion and separation, x x x.
Under Section 8, Rule VII of the Omnibus Rules, "[a] detail is the movement of an employee from one
department or agency which is temporary in nature, which does not involve a reduction in rank, status or
salary and does not require the issuance of another appointment." CPO 189-2013 is an order detailing
personnel from the BOC to CPRO under the DOF.
A reading of the petition filed before the RTC shows that respondents were questioning their mass detail and
reassignment to CPRO. According to respondents, their detail was carried out in bad faith and was meant to
remove them from their permanent positions in the BOC. The action appears to be a personnel action under
the jurisdiction of the CSC.
However, the petition went beyond questioning the detail of respondents. Respondents further assailed the
validity and constitutionality of CPO 189-2013. Respondents alleged that CPO 189-2013 was issued even
before EC) 140, pursuant to which CPO 189-2013 was issued, became effective. Respondents alleged that
CPO 189-2013 was issued to beat the deadline of the Commission on Elections' ban on personnel movement
from 28 September 2013 to 20 October 2013 due to the scheduled barangay elections. When respondents
raised the issue of validity and constitutionality of CPO 189-2013, the issue took the case beyond the scope
of the CSC's jurisdiction because the matter is no longer limited to personnel action. Thus, the RTC did not
abuse its discretion in taking cognizance of the action.
Failure to Exhaust Administrative Remedies
Petitioners allege that respondents failed to exhaust their administrative remedies before filing the case with
the RTC.
The doctrine of exhaustion of administrative remedies allows administrative agencies to carry out their
functions and discharge their responsibilities within the specialized areas of their respective
competence.8The doctrine entails lesser expenses and provides for the speedier resolution of
controversies.9Therefore, direct recourse to the trial court, when administrative remedies are available, is a
ground for dismissal of the action.
The doctrine, however, is not without exceptions. Among the exceptions are: (1) where there is estoppel on
the part of the party invoking the doctrine; (2) where the challenged administrative act is patently illegal,
amounting to lack of jurisdiction; (3) where there is unreasonable delay or official inaction that will
irretrievably prejudice the complainant; (4) where the amount involved is relatively so small as to make the
rule impractical and oppressive; (5) where the question involved is purely legal and will ultimately have to
be decided by the courts of justice; (6) where judicial intervention is urgent; (7) where the application of the
doctrine may cause great and irreparable damage; (8) where the controverted acts violate due process; (9)
where the issue of non-exhaustion of administrative remedies had been rendered moot; (10) where there is
no other plain, speedy and adequate remedy; (11) where strong public interest is involved; and (12) in quo
warranto proceedings.10cralawrednad
In this case, respondents allege that CPO 189-2013 is contrary to law and unconstitutional. Respondents
assail CPO 189-2013 as patently illegal, arbitrary, and oppressive. This case clearly falls within the
exceptions where exhaustion of administrative remedies need not be resorted to by respondents.
178
Effectivity of EO 140
Respondents allege that EO 140 took effect only on 2 October 2013, fifteen days after its publication in two
newspapers of general circulation. Hence, respondents argue that when CPO 189-2013 was issued, EO 140
was not yet effective.
Article 2 of the Civil Code of the Philippines, as amended by Executive Order No. 200, 11 is clear on this
issue. It states:cralawlawlibrary
Art. 2. Laws shall take effect after fifteen days following the completion of their publication either in the
Official Gazette, or in a newspaper of general circulation in the Philippines, unless it is otherwise provided.
The proviso "unless it is otherwise provided" refers to an effectivity date other than after fifteen days
following the completion of the law's publication.12 Thus, it is within the discretion of the legislature, or the
Executive Department in this case, whether to shorten or extend the fifteen-day period13 as long as there is
compliance with the requirement of publication.
Here, Section 9 of EO 140 provides that the "order shall take effect immediately upon publication in two (2)
newspapers of general circulation." EO 140 was published in Manila Bulletin and Philippine Star on 17
September 2013. As such, EO 140 took effect on 17 September 2013.
In addition, the Court already ruled that "[interpretative regulations and those merely internal in nature, that
is, regulating only the personnel of the administrative agency and not the public, need not be
published."14 EO 140 is an internal regulation that affects primarily the personnel of the DOF and the BOC.
It remains valid even without publication.
Validity of CPO 189-2013
Respondents assail the validity of CPO 189-2013. Respondents allege that under EO 140, CPRO shall be
composed of its organic personnel, as approved by the DBM upon recommendation of the DOF Secretary.
The organic personnel was supposed to be augmented and reinforced by DOF and BOC personnel.
Respondents allege that they were detailed to CPRO even before its organic personnel could be constituted.
We rule for respondents.
Section 3 of EO 140 provides:cralawlawlibrary
SECTION 3. Personnel and Staffing Complement. The CPRO shall be composed of its organic personnel, as
approved by the Department of Budget and Management (DBM) upon recommendation of the DOF
Secretary, augmented and reinforced by DOF and BOC personnel as well as those detailed or seconded from
other agencies, whether attached to the DOF or not. In addition, the CPRO, upon approval of the DOF
Secretary, may hire or engage technical consultants to provide necessary support in the performance of its
mandate.
Respondents were supposed to augment and reinforce the existing organic personnel of CPRO. Yet, at the
time of respondents' detail, CPRO had not been formally organized. CPRO had no organic personnel that
had been approved by the DBM upon recommendation of the DOF Secretary. The DOF Secretary had yet to
promulgate rules and regulations and to prescribe procedures and processes to enable CPRO to effectively
exercise its powers and duties, as required by Section 4 of EO 140.
In addition, under Section 8, Rule VII of the Omnibus Rules, a detail is temporary in nature. In fact, detail of
employees is only allowed for a maximum, period for those occupying professional, technical, and scientific
positions.15 Section 8, Rule VII of the Omnibus Rules provides:cralawlawlibrary
SEC. 8. A detail is the movement of an employee from one department or agency to another which is Peralta,*Del Castillo, and Mendoza, JJ., concur.ChanRoblesVirtualawlibrary
temporary in nature, which does not involve a reduction in rank, status or salary and does not require the Leonen, J., see separate dissenting opinion.
issuance of another appointment.
Endnotes:
The employee detailed receives his salary only from his mother unit/agency.
*
Designated acting member per Raffle dated 10 August 2015.
Detail shall be allowed only for a maximum period in the case of employees occupying professional,
technical and scientific position. If the employee believes that there is no justification for the detail, he may 1
Carmelita M. Talusan withdrew as petitioner in Civil Case No. 13-130820, noted by the trial court in its
appeal his case to the Commission. Pending appeal, the decision to detail the employee shall be executory Order dated 4 October 2013. Rollo, p. 58.
unless otherwise ordered by the Commission.
Section 2 of CSC Resolution No. 021181, dated 13 September 2002, 16 clarified the maximum period of 2
Arefiles H. Carreon manifested his intent to withdraw as petitioner in Civil Case No. 13-130820 per letter
detail of employees. It states:cralawlawlibrary to counsel dated 16 October 2013. Id. at 119.
Section 2. Duration of the detail. The detail shall be allowed only for a maximum period of one year. Details
beyond one year may be allowed provided it is with the consent of the detailed employee. The extension or 3
Id. at 57-63.
renewal of the period of the detail shall be within the authority of the mother agency.
4
Ronnie C. Silvestre, Edward P. Dela Cuesta, Rogel C. Gatchalian, Imelda D. Cruz, Lilibeth S. Sandag,
If the employee believes that there is no justification for the detail, he/she may appeal his/her case to the Raymond P. Ventura, Ma. Liza S. Torres, Arnel C. Alacaraz, Ma. Lourdes V. Mangaoang, Francis Agustin
proper Civil Service Commission Regional Office. Pending appeal, the detail shall be executory unless Y. Erpe, Carlos T. So, Marietta D. Zamoranos, Carmelita M. Talusan, Arefiles H. Carreon, and Romalino G.
otherwise ordered by said regional office. Decision of said regional office may be further appealed to the Valdez.
Commission en banc.
In this case, CPO 189-2013 did not provide for the period of respondents' detail. It only provided that the 5
Corsiga v. Judge Defensor, 439 Phil. 875 (2002).
order "shall be effective immediately and valid until sooner revoked," making the detail of respondents
indefinite. There was nothing to show that respondents were occupying professional, technical, and 6
Id.
scientific positions that would have allowed their detail for the maximum period provided under Section 8,
Rule VII of the Omnibus Rules. Further, CSC Resolution No. 021181 did not distinguish between an 7
Olanda v. Bugayong, 459 Phil. 626 (2003).
ordinary employee and an employee occupying professional, technical, and scientific position. Hence, it
should have been specified that the maximum period of respondents' detail should not exceed one year. 8
Addition Hills Mandahiyong Civic & Social Organization, Inc. v. Megaworld Properties & Holdings, Inc.,
G.R. No. 175039, 18 April 2012, 670 SCRA 83.
Petitioners assert, and we quote:cralawlawlibrary
There is a cancer of corruption we must extinguish. The drive to rid the government of graft and corruption 9
Id.
deserves the support of everyone.
10
Vigilar v. Aquino, 654 Phil. 755 (2011).
The principle of good governance cannot, should not, be trivialized nor oversimplified by tenuous
whimpering and individualism intended to detract from the urgent need to cleanse the Republic from a 11
Providing for the Publication of Laws Either in the Official Gazette or in a Newspaper of General
mainstream culture of unabated corruption, perpetuated with impunity and sense of self-entitlement. The Circulation in the Philippines as a Requirement for their Effectivity.
issue at hand is not about who, but what; it is not about individual loss, but about national gain. Whether
from the birth pains of reform, this nation can gain a foothold, nay, a stride into restoring this nation into its 12
Nagkakaisang Maralila ng Sitio Masigasig, Inc. v. Military Shrine Services-Philippine Veteran Affairs
prideful place from the clutches of a "kleptocratic mafia" that had gained a strangehold into one of the Office, Department of National Defense, G.R. No. 187587, 5 June 2013, 697 SCRA 359.
nation's primary sources of revenue.17
Indeed, we commend and support the reforms being undertaken in the different agencies of the government. 13
Tañada v. Tuvera, 230 Phil. 528 (1986), Resolution on Motion for Reconsideration.
However, we cannot allow department heads to take shortcuts that will undermine and disregard the basic
procedures of the law. 14
Id.
WHEREFORE, we PARTIALLY GRANT the petition. We sustain the validity of Executive Order No. 15
Section 26(6), Chapter V, Book V, Title I of Executive Order No. 292 provides that the detail shall be
140. We rule that the Regional Trial Court has jurisdiction over the action for declaratory relief filed by allowed "only for a limited period in the case of employees occupying professional, technical and scientific
respondents. We further rule that Customs Personnel Order No. B-189-2013 was not validly issued. positions."

SO ORDERED.chanrobles virtuallawlibrary 16
As contained in CSC Memorandum Circular No. 21, Series of 2002.

179
 No. B-189-2013
17
Rollo, p. 10.
Under Section 3 of Executive Order No. 140, series of 2013, the Customs Policy Research Office ("the
CPRO") shall be composed of its organic personnel, augmented and reinforced by personnel from the
Department of Finance and Bureau of Customs as well [as] those detailed or seconded from other agencies.
DISSENTING OPINION Pursuant to the foregoing, the following personnel are detailed from the Bureau of Customs to [Customs
Policy Research Office] under the Department of Finance:ChanRoblesvirtualLawlibrary
LEONEN, J.: FULL NAME
POSITION TITLE AND SALARY GRADE
(Surname, First Name)
Respectfully, I dissent. 1. GATCHALIAN, ROGEL CRUZ Collector of Customs VI (26)
2. SO, CARLOS TAN Collector of Customs VI (26)
The Civil Service Commission has exclusive jurisdiction over questions regarding personnel actions 3. DELA CUESTA, EDUARD PALAFOX Collector of Customs VI (26)
affecting civil service employees.3 It is the sole arbiter that decides controversies regarding the civil service 4. BELMONTE, RICARDO RACIMO Collector of Customs VI (26)
at first instance.4 Courts should not directly assume jurisdiction based on allegations of unconstitutionality
5. MOLINA, ADELINA SANTOS ESTRELLA Collector of Customs VI (26)
and invalidity of government regulations when the question, in essence, involves a personnel action.
6. SILVESTRE, RONNIE CRUZ Collector of Customs VI (26)
This is a Petition for certiorari and prohibition with very urgent prayer for the immediate issuance of a 7. MANDANGAN, MACABANTUG DIMAPUNTUG Collector of Customs V (25)
temporary restraining order and/or writ of preliminary mandatory injunction 5 filed by the Department of 8. BAUZON, PR1SCILLA DE VERA Collector of Customs V (25)
Finance and the Bureau of Customs before this court, assailing the Manila Regional Trial Court's 9. CRUZ, IMELDA DE JESUS Collector of Customs V (25)
Order6dated October 1, 2013 issued by Executive Judge Marino M. Dela Cruz, Jr., the Order 7 dated October 10. TOGONON, MA. SONIA IRINEA CALUYO Collector of Customs V (25)
4, 2013 issued by Presiding Judge Felicitas O. Laron-Cacanindin, and all other subsequent Orders 11. SANDAG L1LIBETH SUMBILLA Collector of Customs V (25)
preventing the implementation of Customs Personnel Order No. B-1 89-2013.8 The Department of Finance
12. VENTURA, RAYMOND P. Collector of Customs V (25)
and Bureau of Customs also pray for the dismissal of the Petition for declaratory relief filed by private
respondents before the Regional Trial Court of Manila. 9cralawrednad 13. ROQUE, TERESITA SIOSON Collector of Customs V (25)
14. TORRES, MA. LIZA SEBASTIAN Collector of Customs V (25)
On September 2, 2013, President Benigno Aquino III issued Executive Order No. 140 10 creating the 15. MARTIN, MARITESS THEODOSSIS Collector of Customs V (25)
Customs Policy Research Office in the Department of Finance.11 The Customs Policy Research Office shall 16. ALCARAZ, ARNEL CRUZ Collector of Customs V (25)
review the Bureau of Customs' administration policies, rules, and procedures, and provide recommendations 17. ALCID, TOMAS LADERA Collector of Customs V (25)
for their improvement.12 Section 3 of Executive Order No. 140 provides for the composition of the Customs 18. MANGAOANQ MA. LOURDES VILLAMAR Collector of Customs V (25)
Policy Research Office:cralawlawlibrary
19. ERPE, FRANCIS AGUSTIN YANCHA Collector of Customs V (25)
SECTION 3. Personnel and Staffing Complement. The [Customs Policy Research Office] shall be
composed of its organic personnel, as approved by the Department of Budget and Management (DBM) upon 20. VILLAGARCIA, ROGELIO VELACRUZ Collector of Customs V (25)
recommendation of the [Department of Finance] Secretary, augmented and reinforced by [Department of 21. ZAMORANOS, MARIETTA DANTE Collector of Customs V (25)
Finance] and [Bureau of Customs] personnel as well as those detailed or seconded from other agencies, 22. TAN, JUAN NAT1VIDAD Collector of Customs V (25)
whether attached to the [Department of Finance] or not. In addition, the [Customs Policy Research Office], 23. TALUSAN, CARMELITA MANAHAN Collector of Customs V (25)
upon approval of the [Department of Finance] Secretary, may hire or engage technical consultants to 24. CARREON, AREFILES HAMOY Collector of Customs V (25)
provide necessary support in the performance of its mandate. 13 25. PACARDO, RUSTUM LANUEVO Collector of Customs V (25)
Executive Order No. 140 was published on September 17, 2013 in Manila Bulletin and Philippine 26. VALDEZ, ROMALINO GABRIEL Collector of Customs V (25)
Star.14Section 9 of Executive Order No. 140 provides:cralawlawlibrary
27. PABLO, TALEK J. Collector of Customs V (25)
SECTION 9. Effectivity. This Order shall take effect immediately upon publication in two (2) newspapers
of general circulation.15
On September 17, 2013, or on the same day of publication of Executive Order No. 140, Bureau of Customs All orders, circulars, memoranda, issuances contrary to or inconsistent herewith are hereby revoked and/or
Commissioner Rozzano Rufino B. Biazon issued Customs Personnel Order No. B-189-2013,16with the modified, and all concerned shall be guided accordingly.
approval of Department of Finance Secretary Cesar V. Purisima. 17 Customs Personnel Order No. B-189-
2013 detailed 27 Bureau of Customs personnel to the Customs Policy Research Office under the Department This Order shall be effective immediaitely and valid until sooner revoked.
of Finance.18 Thus:
September 17, 2013 For strict compliance.

CUSTOMS PERSONNEL ORDER

180
 (signed)
ROZZANO RUFINO B. BIAZON
Commissioner of Customs
APPROVED:ChanRoblesvirtualLawlibrary
(signed)
CESAR V. PURISIMA
Secretary
Department of Finance
Date:________19
Only 1220 of the affected employees complied with the directive in Customs Personnel Order No. B-189-
2013 and reported to the Customs Policy Research Office after its effectivity on September 17,
2014.21cralawrednad
The other 1522 affected employees refused to comply with the Order23 and instead filed on September 30,
2013 a Petition24 for declaratory relief with an application for a temporary restraining order and/or a writ of
preliminary injunction before the Regional Trial Court of Manila. 25cralawredcralawrednad
The 15 employees assailed the validity of Customs Personnel Order No. B-189-2013.26 They argued that
Customs Personnel Order No. B-189-2013 violated (a) Section 70327 of Republic Act No. 1937 or the Tariff
and Customs Code;28 (b) their right to security of tenure as career service officers defined under Book V,
Title I, Subtitle A, Chapter 2, Section 7 of Executive Order No. 292; 29 and (c) Section 3 of Executive Order
No. 140.30 They further argued that Customs Personnel Order No. B-189-2013 was invalid for having been
issued prior to the effectivity of Executive Order No. 140.31 They relied on Article 232 of the Civil Code that
provides that laws become effective 15 days after complete publication. 33cralawrednad
On October 1, 2013, Executive Judge Marino M. Dela Cruz, Jr. granted a 72-hour temporary restraining
order to stop the implementation of Customs Personnel Order No. B-189-2013.34 The case was then raffled
to Branch 17 presided by Judge Felicitas O. Laron-Cacanindin (Judge Laron-Cacanindin).35cralawrednad
On October 4, 2013,36 the Department of Finance and the Bureau of Customs filed a Motion to
Dismiss.37They argued that the Regional Trial Court had no jurisdiction over the employees' Petition for
declaratory relief and that the requisites for the filing of a Petition for declaratory relief were
lacking.38cralawrednad
In the Order dated October 4, 2013, Judge Laron-Cacanindin extended the temporary restraining order to 20
days after finding that Customs Personnel Order No. B-189-2013 had "violate[d] the rules on detail because
it failed to provide the duration of the detail."39 In the same Order, Judge Laron-Cacanindin stated that the
Order was without prejudice to further findings of the court after trial on the merits of the main case for
declaratory relief.40cralawrednad
In the Order41 dated October 21, 2013, Judge Laron-Cacanindin denied the employees' application for a writ
of preliminary injunction.42 The denial of their application for a writ of preliminary injunction prompted six
(6) of the employees who filed the Petition to report to the Customs Policy Research Office.43 The returning
employees reasoned that they reported for work so they would not be charged with
insubordination.44cralawrednad
On October 21, 2013, the Department of Finance and Bureau of Customs filed this Petition for certiorari and
181
prohibition.45cralawrednad
This court required the 15 employees to file a Comment on the Petition. 46 After filing the Comment,47the
Department of Finance and Bureau of Customs were ordered to file a Reply. 48cralawrednad
In their Petition for certiorari, the Department of Finance and Bureau of Customs argued that the Civil
Service Commission, not the Regional Trial Court, had jurisdiction over the subject matter of this case and
that the 15 employees failed to exhaust all available administrative remedies before filing their Petition for
declaratory relief.49 According to the Department of Finance and Bureau of Customs, Customs Personnel
Order No. B-189-2013 was a personnel action, and questions involving personnel actions in the civil service
should be lodged before the Civil Service Commission.50cralawrednad
Further, the Department of Finance and Bureau of Customs argued that some of the requirements for filing a
Petition for declaratory relief were absent.51 First, a declaratory relief is available only when the government
issuance being questioned is a national law or an ordinance of general application, 52 Since Customs
Personnel Order No. B-189-2013 was an internal personnel order whose application was limited within the
Bureau of Customs, it cannot be a subject of a Petition for declaratory relief.53 Second, the declaratory relief
was no longer available because Customs Personnel Order No. B-189-2013 had been breached prior to the
filing of the Petition.54 The 15 employees allegedly committed a breach when they failed to report to the
Customs Policy Research Office upon the effectivity of Customs Personnel Order No. B-189-2013 on
September 17, 2013.55 Third, a declaratory relief was not available to the 15 employees because they had an
adequate remedy with the Civil Service Commission.56cralawrednad
Regarding the duration of the detail, the Department of Finance and Bureau of Customs argued that the
detail was not indefinite and that pursuant to Civil Service Commission Resolution No. 021181 57 or the
Policies on Detail, the detail shall only last for at most, one (1) year. 58cralawrednad
In their Comment dated January 8, 2014, the 15 employees countered that the Regional Trial Court had
jurisdiction as the main issue was the validity and constitutionality of Customs Personnel Order No. B-189-
2013.59 The resolution of this issue required the exercise of judicial review, which was beyond the
competence of the Civil Service Commission.60cralawrednad
Since the 15 employees' Petition for declaratory relief alleges that Customs Personnel Order No. B-189-
2013 is unconstitutional and invalid, those allegations should suffice for the Regional Trial Court to assume
jurisdiction.61cralawrednad
According to the 15 employees, Customs Personnel Order No. B-189-2013 is unconstitutional for violating
their right to security of tenure.62 Their detail to the Customs Policy and Research Office amounts to
constructive dismissal63 as they are now "mere researchers[.]"64cralawrednad
The 15 employees argue that all the requisites for the filing of a Petition for declaratory relief are
present.65 They claim that Customs Personnel Order No. B-189-2013 is a government regulation, affecting
their rights, duties, rank, and status.66 Hence, Customs Personnel Order No. B-189-2013 is a proper subject
of a Petition for declaratory relief.67 They also argue that Customs Personnel Order No. B-189-2013 is void,
producing no effect.68 According to them, a void or unconstitutional law or issuance cannot be a source of an
obligation so it cannot be breached.69cralawrednad
This case should consider the following issues:ChanRoblesvirtualLawlibrary
First, whether the Regional Trial Court has jurisdiction over private respondents' Petition for declaratory
relief;
Second, whether all the requisites for the filing of a Petition for declaratory relief are present; and
Finally, whether Customs Personnel Order No. B-189-2013 is void because of its indefinite term.
I.
The Constitution confers jurisdiction over the Civil Service Commission for cases involving the civil
service. Article IX(B), Section 1(1) of the Constitution provides:cralawlawlibrary
SECTION 1.(1) The Civil Service shall be administered by the Civil Service Commissioncomposed of a
Chairman and two Commissioners who shall be natural-born citizens of the Philippines and, at the time of
their appointment, at least thirty-five years of age, with proven capacity for public administration, and must
not have been candidates for any elective position in the elections immediately preceding their appointment.
(Emphasis supplied)
As part of the Civil Service Commission's mandate to administer the civil service, Article IX(B), Section 3
of the Constitution provides:cralawlawlibrary
SECTION 3. The Civil Service Commission, as the central personnel agency of the Government, shall
establish a career service and adopt measures to promote morale, efficiency, integrity, responsiveness,
progressiveness, and courtesy in the civil service. It shall strengthen the merit and rewards system, integrate
all human resources development programs for all levels and ranks, and institutionalize a management
climate conducive to public accountability. It shall submit to the President and the Congress an annual report
on its personnel programs. (Emphasis supplied)
The Constitution gives the Civil Service Commission quasi-judicial powers through Article IX(A), Sections
6 and 7, which provide:cralawlawlibrary
SECTION 6. Each Commission en banc may promulgate its own rules concerning pleadings and practice
before it or before any of its offices. Such rules, however, shall not diminish, increase, or modify substantive
rights.
SECTION 7. Each Commission shall decide by a majority vote of all its Members any case or matter
brought before it within sixty days from the date of its submission for decision or resolution. A case or
matter is deemed submitted for decision or resolution upon the filing of the last pleading, brief, or
memorandum required by the rules of the Commission or by the Commission itself. Unless otherwise
provided by this Constitution or by law, any decision, order, or ruling of each Commission may be brought
to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy thereof.
(Emphasis supplied)
As the "central personnel agency of the Government,"70 Book V, Title I, Subtitle A, Chapter 3, Section
12(11) of Executive Order No. 292 or the Administrative Code of 1987 provides:cralawlawlibrary
SECTION 12. Powers and Functions. — The [Civil Service] Commission shall have the following powers
and functions:ChanRoblesvirtualLawlibrary
....
(11)Hear and decide administrative cases instituted by or brought before it directly or on appeal, including
contested appointments, and review decisions and actions of its offices and of the agencies attached to
it. Officials and employees who fail to comply with such decisions, orders, or rulings shall be liable for
contempt of the Commission. Its decisions, orders, or rulings shall be final and executory. Such
decisions, orders, or rulings may be brought to the Supreme Court on certiorari by the aggrieved party
within thirty (30) days from receipt of a copy thereof[.] (Emphasis supplied)
182
Further, for the implementation of Book V, Title I, Subtitle A, Chapter 3, Section 12(11) of Executive Order
No. 292,71 Sections 5(B)(3), 6(B)(3), and 7(B)(2) of Civil Service Commission Memorandum Circular No.
19-99 or the Revised Uniform Rules on Administrative Cases in the Civil Service lay down the different
offices of the civil service where complaints involving personnel actions should be filed.
Hence:cralawlawlibrary
SECTION 5. Jurisdiction of the Civil Service Commission Proper.72 — The Civil Service Commission
Proper shall have jurisdiction over the following cases:cralawlawlibrary
....
B. Non-Disciplinary
....
3. Protests against the appointment, or other personnel actions, involving third level officials;73 and
....
SECTION 6. Jurisdiction of Civil Service Regional Offices. — The Civil Service Commission Regional
Offices shall have jurisdiction over the following cases:cralawlawlibrary
....
B. Non-Disciplinary
....
3. Decisions of national agencies and local government units within their geographical boundaries
relative to personnel actions and non-disciplinary cases brought before it on appeal; and
....
SECTION 7. Jurisdiction of Heads of Agencies. — Heads of Departments, agencies, provinces, cities,
municipalities and other instrumentalities shall have original concurrent jurisdiction, with the
Commission,74 over their respective officers and employees.chanrobleslaw
....
B. Non-Disciplinary
2. Complaints on personnel actions and other non-disciplinary actions of their respective personnel.
(Emphasis supplied)
As the "central personnel agency of the Government"75 with quasi-judicial powers76 and as the body tasked
to administer the civil service,77 the Civil Service Commission is the "sole arbiter of controversies relating to
the civil service[,]"78 including personnel actions, as this court has ruled. 79cralawrednad
The material allegations in the Complaint or Petition and the character of the relief sought determine which
court has jurisdiction.80 In private respondents' 44 paragraphs in their Petition for declaratory relief filed
before the Regional Trial Court, they alleged:cralawlawlibrary
8. On 17 September 2013, without waiting for [Executive Order] No. 140's effectivity on 2 October 2013,
the [Bureau of Customs] issued [Customs Personnel Order] No. B-189-2013, signed by [Bureau of
Customs] Commissioner Rozzano Rufino B. Biazon and approved by [Department of Finance] Secretary,
Cesar V. Purisima on even date. [Customs Personnel Order] No. B-189-2013 states:cralawlawlibrary
Under Section 3 of Executive Order No. 140, series of 2013, the Customs Policy Research Office (the
"CPRO") shall be composed of its organic personnel, augmented and reinforced by personnel from the
Department of Finance and Bureau of Customs as well as those (sic) detailed or seconded from other
agencies. Pursuant to the foregoing, the following personnel are detailed from the Bureau of Customs to [the
Customs Policy Research Office] under the Department of Finance:ChanRoblesvirtualLawlibrary
....
9. Thus, [private respondents'] original and permanent appointments in plantilla positions as Collectors of
Customs VI and V were effectively and constructively revoked even before the effectivity of [Executive
Order] No. 140 creating the [Customs Policy Research Office].
They are all "detailed" to the [Customs Policy Research Office] without any appointment papers providing
for their specific functions, status, salary grades, ranks, and designation. By virtue of the assailed issuance,
[private respondents'] were all removed from their respective permanent positions as Collectors of Customs
to form a supposed "research body."
10. The Department of Budget and Management (DBM), pursuant to [Executive Order] No. 140 has not
even approved the composition of the organic personnel of the [Customs Policy Research Office]. Neither
has the [Department of Finance] appeared to. have made the requisite recommendation for that purpose, as
mandated by [Executive Order] No. 140.
11. While they have not been officially notified thereof, [private respondents] were reliably informed of the
issuance of [Customs Personnel Order] No. B-189-2013 and [petitioners'] attempt to unlawfully
"detail" them to the [Customs Policy Research Office].
....
13. While the [Bureau of Customs] Commissioner's authority to reorganize is recognized, it is neither
absolute nor unbridled. The exercise thereof should not violate the law and the 1987 Constitution. The
Constitution clearly mandates that "no officer or employee of the civil service shall be removed or
suspended except for cause provided by law."
14. Section 703 of [Republic Act] No. 1937, as amended, provides that:cralawlawlibrary
Assignment of Customs Officers and Employees to other duties. - The Commissioner of Customs may, with
the approval of the Secretary of Finance, assign any employee of the Bureau of Customs to any port, service,
division or office within the Bureau or assign him duties as the best interest of the service may require, in
accordance with the staffing pattern or organizational set-up as may be prescribed by the Commissioner of
Customs with the approval of the Secretary of Finance: Provided, that such assignment shall not affect the
tenure of office of the employees nor result in the change of status, demotion in rank and/or deduction of
salary.
15. Section 2 of [Republic Act] No. 6656 [or An Act to Protect the Security of Tenure of Civil Service
Officers and Employees in the Implementation of Government Reorganization] further provides that due
notice and hearing are required to remove a public officer or employee pursuant to a bona
fide reorganization, viz:cralawlawlibrary
No officer or employee in the career service shall be removed except for a valid cause and after due notice
and hearing. A valid cause for removalexists when, pursuant to a bona fide reorganization, a position has
been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to
meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law.
16. Thus, while the necessity and indispensability of reorganization when public interest demands may be
justified, civil service employees, much more career service officers with permanent appointments like
[private respondents], cannot be removed, suspended, or demoted from office except for cause provided by
law.
183
....
18. In this case, [Customs Personnel Order] No. B-l89-2013 allegedly "detailed" all 15[private
respondents], together with 12 other Collectors of Customs, to an advisory capacity of a policy coordinating
body (CPRO) under the guise of reorganization, thus effectively rendering vacant the 27 positions of
collector of customs throughout the country.
19. Section 8, Rule VII of Civil Service Commission (CSC) Resolution No. 91-1631, otherwise known as
the "Omnibus Civil Service Rules and Regulations," provides that a "detail" is "the movement of an
employee from one department or agency to another which is temporary in nature, which does not involve a
reduction in rank, status or salary and does not require the issuance of another appointment."
20. The patent nullity of [Customs Personnel Order] No. B-189-2013 is readily apparent since Section 703
of [the Tariff and Customs Code] merely authorizes the [Bureau of Customs] Commissioner to assign or
move [Bureau of Customs] personnel only within the Bureau. Since the [Customs Policy Research Office] is
a newly created "office" outside of the [Bureau of Customs], the [Bureau of Customs] Commissioner's
issuance of [Customs Personnel Order] No. B-189-2013 which "details" [private respondents] to the
[Customs Policy Research Office] is clearly an ultra vires act, and is therefore invalid. In fact, the [Bureau of
Customs] Commissioner's own admission proves this ultra vires and invalid issuance, thus:cralawlawlibrary
"It is more than a reshuffle because [private respondents] have actually been transferred to the [Department
of Finance], out of the Bureau of Customs" Biazon said in an ANC interview, confirming news first reported
by the Philippine Daily Inquirer. "Instead of just reassignment [to] another port, they're basically reassigned
to another office."
"After their transfer out of the [Bureau of Customs], the next-in-rank collectors or division heads are taking
over as officers-in-charge of the different ports," he said.
21. There is no bona fide reorganization that took place. [Private respondents'] mass"detail" to the [Customs
Policy Research Office] was without any clear or definite direction as to their career status and functions. As
a consequence, [private respondents] were intentionally and effectively placed on a "floating status."
22. Furthermore, [Executive Order] No. 140 clearly provides that the [Customs Policy Research Office]
shall be composed of its organic personnel, and that said policy research body - after the organization of its
own organic personnel - shall merely be augmented and reinforced by Department of Finance and Bureau of
Customs personnel. Despite the absence of any organic personnel, much less approval from the Department
of Budget and Management or even a recommendation from the [Department of Finance], [private
respondents] have, in speed haste, already been ordered to be "detailed" by the [Bureau of Customs] to the
[Customs Policy Research Office], and thus, effectively removed from their current respective permanent
positions.
23. The landmark case of Dario v. Mison, et al., where the Supreme Court voided the personnel
reorganization within the [Bureau of Customs], is highly instructive in this case, thus:cralawlawlibrary
Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith.
....
24. By no stretch of the imagination can the issuance of [Customs Personnel Order] No. B-189-2013 be said
to have been carried out in good faith. The undue haste in issuing [Customs Personnel Order] No. B-189-
2013 clearly shows that respondents are attempting to beat the deadline on the COMELEC election ban
on personnel movement from 28 September 2013 to 28 October 2013 due to the forthcoming Barangay
Elections. It cannot be denied that [Executive Order] No. 140, which was signed by the President on 2
September 2013, has yet to take effect on 2 October 2013, which is 15 days after its publication in two (2)
newspapers of general circulation. On 17 September 2013, however, the [Bureau of Customs] already issued
[Customs Personnel Order] No. B-189-2013, which is based on [Executive Order] No. 140, and attempted to
serve copies thereof to [respondents] on 26 to 27 September 2013 supposedly just in time before the
COMELEC election ban on personnel movement takes effect on 28 September 2013.
25. More importantly, [Executive Order] No. 140 mandates that the transfer of [Bureau of Customs]
personnel should merely augment or reinforce the organic personnel of the [Customs Policy Research
Office]. Obviously, without any organic personnel, there is still nothing to augment or reinforce. . . . Hence,
[private respondents'] "detail" to the [Customs Policy Research Office] absent any compliance with the
requirements under [Executive Order] No. 140, was surely carried out in bad faith, and was meant
to illegally remove [private respondents] from their respective permanent positions, in blatant violation of
the law and the Constitution.
26. It should also be stressed that [private respondents] were appointed as Collectors of Customs with
Position Titles VI and V, with specific functions, duties, titles, and ranks clearly provided for in their
respective appointment papers. In contrast, their supposed "detail" to the [Customs Policy Research Office]
under [Customs Personnel Order] No. B-189-2013 does not even provide for a definite period of duty, their
titles, new functions, or ranks.
27. Moreover, under CSC Memorandum Circular No. 06-05, otherwise known as the "Guidelines on
Designation" it is clear that:cralawlawlibrary
....
B. Designees can only be designated to positions within the level they are currently occupying. However,
Division Chiefs may be designated to perform the duties of third level positions
First level personnel cannot be designated to perform the duties of second level positions.
....
29. The basis of [private respondents'] reassignment or the exigency necessary to remove them from their
positions is likewise inexistent. Such blanket "detail" relinquishes [private respondents'] permanent positions
as Collectors of Customs without due process and is contrary to their Constitutional right to security of
tenure. Clearly, the disparity between the positions of a Collector of Customs and a mere researcher is
blatant. Therefore, the transfer from the former to the latter unmistakeably denotes demotion....
....
30. In the case of Pastor v. City of Pasig, the Supreme Court held that a reassignment or even detail which is
indefinite and which results in a reduction of rank and status is effectively a constructive dismissal from the
service. . . .
....
31. The principles on constructive dismissal clearly find analogous application to [private respondents]. By
definition, constructive dismissal is a quitting because continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank or a diminution of pay. The test of constructive
dismissal is whether a reasonable person in the employee's position would have felt compelled to give up his
position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not.
184
Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in
favor of employees in order to protect their rights and interests from the coercive acts of the employer. Thus,
the Supreme Court has ruled that the management prerogative to transfer an employee "cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker."
32. Evidently, [private respondents'] "detail" to the [Customs Policy Research Office] operated as a blanket
and forced relinquishment of their permanent positions as Collectors of Customs in violation of their right to
security of tenure. In view thereof, it behooves upon this Honorable Court to correct such abuse of powers
and retain [private respondents] to their rightful ranks.
....
35. ... in accordance with the Supreme Court's ruling in Tañada v. Tuvera, laws and executive issuances
shall take effect after fifteen (15) days following the completion of their publication in the Official Gazette,
or in a newspaper of general circulation.
36. In this case, [Executive Order] No. 140 was published in the 17 September 2013 issue of the broadsheet
newspaper, Manila Bulletin. Thus, following the above legal standards, it is clear that [Executive Order] No.
140 has yet to take legal effect on 2 October 2013. In other words, the [Bureau of Customs'] issuance of
[Customs Personnel Order] No. B-189-2013 on 17 September 2013 simply, has no legal basis, and is
therefore premature and patently invalid. To deprive [private respondents] of their permanent positions as
Collectors of Customs and to "detail" all 15 of them indefinitely as members of a research body on the basis
of an invalid [Bureau of Customs] and [Department of Finance] order are not only illegal but also
unconstitutional for being violative of [private respondents'] right to security of tenure.
37. An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it
creates no office; it is, in legal contemplation, inoperative, as if it had not been passed. . . . For these reasons,
[Customs Personnel Order] No. B-189-2013 should be nullified and set aside, and its enforcement enjoined.
38. . . . The consequence [of implementing Customs Personnel Order No. B-189-2013] that is also readily
obvious is the chaos entailed in port operations, the collection of much needed Government revenues and
public service as [private respondents] perform functions either as District Collectors of all the 17 Collection
Districts in the country, or as Deputy Collectors for administration, assessment and operation in those
different ports.
....
41. It cannot be overemphasized that the issuance of [Customs Personnel Order] No. B-189-2013 is illegal,
and blatantly violates existing law and the Constitution. As above mentioned, respondents intend to have
[Customs Personnel Order] No. B-189-2013 immediately effective. Thus, there is a manifest urgency for
this Honorable Court to immediately restrain [petitioners] from implementing [Customs Personnel Order]
No. B-189-2013 upon receipt of this petition and before the matter can be heard on notice. Otherwise, grave
injustice and irreparable injury would be suffered by [private respondents], in that:cralawlawlibrary
(a) [Executive Order] No. 140, on which [Customs Personnel Order] No. B-189-2013 is based, has yet to
take effect upon publication in two (2) newspapers of general circulation. [Executive Order] No. 140 was
published in the 17 September 2013 issue of the Manila Bulletin, hence, it will only take effect on 2
October 2013. [Customs Personnel Order] No. B-189-2013 cannot be given any effectivity as it is invalid
for being blatantly premature and without legal basis;
(b)[Customs Personnel Order] No. B-189-2013 violates [Executive Order] No. 140, as the latter mandates
 that the [Department of Finance], with the approval of the [Department of Budget and Management], has
to recommend the composition of the organic personnel of the [Customs Policy Research Office]. No
such recommendation by the [Department of Finance], much less the approval of the [Department of
Budget and Management], has been made. In fact, [Executive Order] No. 140 provides that the transfer of
[Bureau of Customs] personnel should merely augment or reinforce the organic personnel of the
[Customs Policy Research Office]. Obviously, without any organic personnel, there is still nothing to
augment or reinforce. The [Customs Policy Research Office] is thus in limbo, as there is yet no organic
personnel in place;
(c) [Customs Personnel Order] No. B-189-2013 is also contrary to Section 703 of [Republic Act] No. 1937,
as amended, which provides that "(t)he Commissioner of Customs may, with the approval of the
Secretary of Finance, assign any employee of the Bureau of Customs to any port, service, division or
office within the Bureau or assign him duties as the best interest of the service may require." Even
Commissioner Biazon, in an interview with [the ABS-CBN News Channel] admitted that "it is more than
a reshuffle because they have actually been transferred to the [Department of Finance], out of the Bureau
of Customs." The Commissioner of Customs thus committed an illegal and ultra vires act in "detailing"
[private respondents] to the [Customs Policy Research Office], an office admittedly outside the [Bureau
of Customs]; and
(d)[private respondents'] "detail" to the [Customs Policy Research Office] is [petitioners'] scheme to
constructively dismiss and demote [private respondents]. [Customs Personnel Order] No. B- 189-2013
operates as a blanket and forced relinquishment of [private respondents'] permanent positions as
Collectors of Customs in violation of their constitutional right to security of tenure. [Private respondents]
are all "detailed" to the [Customs Policy Research Office] without any appointment papers providing for
their specific functions, status, salary grades, ranks, and designation, thereby intentionally and effectively
placing them on "floating status."
(e) [Private respondents] would be unduly displaced from their permanent positions with the appointment
and/or designation by the [Bureau of Customs] of new Collectors of Customs. 81 (Emphasis supplied,
citations omitted)
An examination of the text of the Petition for declaratory relief readily shows that private respondents
originally questioned a personnel action. They essentially questioned their detail to the Customs Policy and
Research Office.
Book V, Title I, Subtitle A, Chapter 5, Section 26 of Executive Order No. 292 defines a personnel
action:cralawlawlibrary
SECTION 26. Personnel Actions. — . . .
As used in this Title, any action denoting the movement or progress of personnel in the civil service shall be
known as personnel action. Such action shall include appointment through certification, promotion, transfer,
reinstatement, re-employment, detail, reassignment, demotion, and separation. (Emphasis supplied)
The assailed Customs Personnel Order No. B-189-2013 is a personnel action because it details 27
employees from the Bureau of Customs to the Customs Policy Research Office. It is a movement of
personnel in the civil service.
Cases involving personnel actions are within the exclusive jurisdiction of the Civil Service Commission and
not within the trial courts' jurisdiction.82cralawrednad
The issue is not novel.
In Olanda v. Bugayong,83 respondent Leonardo G. Bugayong (Bugayong), as President of the Philippine
Merchant Marine Academy, relieved petitioner Menelieto A. Olanda (Olanda) from his post as the Dean of
185
the College of Marine Engineering of the Philippine Merchant Marine Academy84 and imposed a three (3)-
month suspension85 on the latter for allegedly "misusing classified information."86 Olanda filed before the
Regional Trial Court of Iba, Zambales a Petition for "quo warranto, mandamus, and prohibition with prayer
for the issuance of a writ of preliminary injunction and damages, claiming that there was no valid cause to
deprive him of his position[.]"87cralawrednad
This court ruled that the trial court had no jurisdiction. 88 Hence:cralawlawlibrary
Disciplinary cases and cases involving "personnel actions" affecting employees in the civil service including
"appointment through certification, promotion, transfer, reinstatement, reemployment, detail, reassignment,
demotion and separation" are within the exclusivejurisdiction of the Civil Service Commission which is the
sole arbiter of controversies relating to the civil service.
....
It was thus error for the trial court, which does not have jurisdiction, to, in the first, [sic] place take
cognizance of the petition of petitioner assailing his relief as Dean and his designation to another position.
This leaves it unnecessary to dwell on the issues herein raised by petitioner.
WHEREFORE, the petition is, upon the ground of lack of jurisdiction of the trial court, hereby DENIED.
SO ORDERED.89 (Emphasis supplied, citation omitted)
In Casimina v. Judge Legaspi,90 petitioner Pablo B. Casimina (Casimina), General Manager of the
Philippine Fisheries Development Authority, issued Special Order No. 82, which reassigned private
respondent Emmanuel T. Illera (Illera), Port Manager of the Iloilo Fishing Port Complex, from Iloilo to the
central office in Quezon City.91 After the denial of his request for reconsideration,92 Illera filed for
injunction with a prayer for temporary restraining order and a writ of preliminary injunction against
Casimina before the Regional Trial Court of Iloilo "to restrain [Casimina] from transferring him to the
central office in Quezon City."93cralawrednad
Casimina filed an Omnibus Motion to dismiss the Complaint on the ground of, among others, lack of
jurisdiction.94 This court ruled that the trial court has no jurisdiction over the Petition.95 "[T]his case falls
within the jurisdiction of the Civil Service Commission (CSC) because it involves the movement of
government personnel to promote order and efficiency in public service." 96cralawrednad
In Mantala v. Salvador,97 Dr. Julia P. Regino (Regino) filed a formal protest before the Committee on
Evaluation and Protest of the Department of Health questioning the appointment of Dr. Mariquita J. Mantala
(Dr. Mantala).98 The Committee on Evaluation and Protest upheld Dr. Mantala's appointment.99Upon appeal
and reconsideration, the Civil Service Commission also upheld Dr. Mantala's appointment. 100The Resolution
of the Civil Service Commission became final and executory. 101 Regino then filed an action for quo
warranto and mandamus before the Regional Trial Court in Quezon City.102 The trial court annulled and set
aside Dr. Mantala's appointment and directed the Secretary of Health to withdraw Dr. Mantala's appointment
and to issue another for Regino.103 Dr. Mantala then filed a Petition for Review on certiorari before this
court.104 This court granted the Petition and annulled the Decision of the trial court: 105
Disciplinary cases, and cases involving "personnel actions" affecting employees in the civil service—
including "appointment through certification, promotion, transfer, reinstatement, reemployment, detail,
reassignment, demotion and separation," and, of course, employment status and qualification standards—
are within the exclusive jurisdiction of the Civil Service Commission. The Constitution declares the
Commission to be "the central personnel agency of the Government," having power and authority to
administer the civil service; to promulgate its own rules concerning pleadings and practice before it or
before any of its offices; and to render decision in "any case or matter brought before it within sixty days
from the date of its submission for decision or resolution," which decision, or order or ruling "may be
brought to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy
thereof."
....
It was thus error, because beyond its competence, for the respondent Trial Court to take cognizance of the
quo warranto and mandamus action instituted by Dr. Regino which was in essence a protest against the
appointment of Dr. Mantala.106 (Emphasis supplied, citations omitted)
In all these cases, this court upheld the jurisdiction of the Civil Service Commission over complaints
involving the movement of personnel in the civil service.
II.
The doctrine of primary administrative jurisdiction precludes trial courts from resolving a controversy
involving a question that is within the a exclusive jurisdiction of an administrative tribunal. 107 The doctrine
disallows courts "to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is
initially lodged with an administrative body of special competence." 108cralawrednad
109
In Pambujan Sur United Mine Workers v. Samar Mining Company, Inc., the plaintiff Pambujan Sur
United Mine Workers filed a Complaint before the Court of First Instance (now Regional Trial Court)
against the Samar Mining Company, Inc. (Samar Mining) alleging breach of their closed-shop
agreement.110 Samar Mining filed a Motion to Dismiss arguing that the regular courts had no jurisdiction
over the subject matter of the Complaint.111 Samar Mining argued that the Court of Industrial Relations (now
National Labor Relations Commission) had jurisdiction over cases involving conditions of
employment.112 The Court of First Instance granted the Motion to Dismiss.113cralawrednad
Upon appeal, this court applied the "exclusion theory,"114 i.e., "where jurisdiction is conferred in express
terms upon one court, and not upon another [and where] it has been held that it is the intention that the
jurisdiction conferred shall be exclusive"115 and upheld the exclusive jurisdiction of the Court of Industrial
Relations (now National Labor Relations Commission).116 Hence:cralawlawlibrary
But judicial wisdom in this particular matter would seem to favor adherence to the exclusion theory, what
with the litigant's ordinary duty to exhaust administrative remedies and the "doctrine of primary
administrative jurisdiction," sense-making and expedient,
"That the courts cannot or will not determine a controversy involving a question which is within the
jurisdiction of an administrative tribunal prior to the decision of that question by the administrative tribunal,
where the question demands the exercise of sound administrative discretion requiring the special knowledge,
experience, and services of the administrative tribunal to determine technical and intricate matters of fact,
and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered."
(42 Am. Jut., 698.)117
This court also made a similar ruling in Javier v. Court of Appeals.118 In Javier, Normito Javier (Normito)
was "employed by private respondent Jebsens Maritime, Inc. as a boatswain[.]" 119 Normito, however, died at
sea.120 Upon learning of her husband's death, Lolita Javier (Lolita) went to the office of Jebsens Maritime,
Inc. and the latter "promised to give the corresponding death benefits[.]" 121 After Jebsens Maritime, Inc. had
failed to pay the promised death benefits, Lolita filed a Complaint before the Regional Trial Court of Makati
for a sum of money for herself and on behalf of her six (6) minor children against Jebsens Maritime, Inc.
and its shipmaster.122cralawrednad
This court ruled that under Section 3(d)123 of Executive Order No. 247 or the Reorganization Act of the
186
Philippine Overseas Employment Administration, it was the Philippine Overseas Employment
Administration that had original and exclusive jurisdiction over Lolita's Complaint and that the trial court
had no jurisdiction over the subject matter of her Complaint.124 Hence, under the doctrine of primary
administrative jurisdiction, the trial court cannot resolve the controversy. 125cralawred This court ordered the
Regional Trial Court to dismiss the case for lack of jurisdiction.126cralawrednad
In Catipon, Jr. v. Japson,127 respondent Jerome Japson (Japson), "a former Senior Member Services
Representative of [the] [Social Security System,] Bangued, filed a letter-complaint [before] the Civil Service
Commission-[Cordillera Administrative Region] Regional Director[.]"128 He alleged that petitioner Macario
U. Catipon, Jr. (Catipon) made deliberate false entries in his application to take the Civil Service
Professional Examination.129 The Civil Service Commission-Cordillera Administrative Region Regional
Director found Catipon guilty of conduct prejudicial to the best interest of the service. 130cralawrednad
Catipon appealed to the Court of Appeals, which dismissed the appeal. 131 The Court of Appeals held that
instead of filing the appeal before the Court of Appeals, Catipon should have appealed to the Civil Service
Commission, based on Sections 5(A)(1),132 43,133 and 49134 of the Civil Service Commission Uniform Rules
on Administrative Cases.135cralawrednad
This court affirmed the Decision of the Court of Appeals136 and held:cralawlawlibrary
The [Court of Appeals] is further justified in refusing to take cognizance of the petition for review, as "[t]he
doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a
controversy the jurisdiction over which is initially lodged with an administrative body of special
competence." When petitioner's recourse lies in an appeal to the Commission Proper in accordance with the
procedure prescribed in [Revised Uniform Rules on Administrative Cases in the Civil Service], the [Court of
Appeals] may not be faulted for refusing to acknowledge petitioner before it. 137 (Emphasis supplied)
Hence, considering the exclusive jurisdiction of the Civil Service Commission to hear and decide
administrative cases, including those involving personnel actions, as granted by the Constitution, the
Regional Trial Court cannot assume jurisdiction based on the doctrine of primary administrative jurisdiction.
In sustaining the trial court's assumption of jurisdiction over the Petition for declaratory relief, the ponencia
held that the case falls under an exception to the doctrine of exhaustion of administrative remedies. 138 The
ponencia states:cralawlawlibrary
In this case, respondents allege that [Customs Personnel Order No. B-189-2013] is contrary to law and
unconstitutional. Respondents assail [Customs Personnel Order No. B-189-2013] as patently illegal,
arbitrary, and oppressive. This case clearly falls within the exceptions where exhaustion of administrative
remedies need not be resorted to by respondents. 139
Private respondents, citing Kilusang Bayan sa Paglilingkod ng mga Magtitinda ng Bagong Pamilihang
Bayan ng Muntinlupa, Inc. (KBMBPM) v. Dominguez,140 likewise argue that exceptions to the doctrine of
exhaustion of administrative remedies apply.141 Hence:cralawlawlibrary
Moreover, the doctrine of exhaustion of administrative remedies also yields to other exceptions, such as
when the question involved is purely legal, as in the instant case, or where the questioned act is patently
illegal, arbitrary or oppressive.142
The doctrine of exhaustion of administrative remedies does not apply and, consequently, its exceptions.
The doctrine of primary administrative jurisdiction is different from the doctrine of exhaustion of
administrative remedies.
Under the doctrine of primary administrative jurisdiction, when an administrative agency is granted primary
jurisdiction over the subject matter, the courts "cannot or will not determine a controversy involving a
question which is within the jurisdiction of an administrative tribunal prior to the decision of that question
by the administrative tribunal[.]"143 The doctrine of primary administrative jurisdiction presupposes that the
administrative agency has jurisdiction over the subject matter while the court does not. The Complaint or
Petition, therefore, cannot be filed before the court. As the issue is jurisdictional, there should be no
exception to the doctrine of primary administrative jurisdiction. When the complaint or petition is filed
before a court with no subject matter jurisdiction, the court has no other option but to dismiss the
case.144cralawrednad
On the other hand, under the doctrine of exhaustion of administrative remedies, before a party may seek
intervention from the court, he or she should have already exhausted all the remedies in the administrative
level.145 If there is still a remedy available within the administrative machinery, "then such remedy should be
exhausted first before [the] court's judicial power can be sought." 146 The doctrine of exhaustion of
administrative remedies presupposes that both the courts and the administrative agency have concurrent
jurisdiction. This is because non-observance of the doctrine of exhaustion of administrative remedies does
not affect the court's jurisdiction.147 In Soto v. Jareno,148 this court ruled:cralawlawlibrary
Failure to observe the doctrine of exhaustion of administrative remedies does not affect the jurisdiction of
the court. We have repeatedly stressed this in a long line of decisions. The only effect of non-compliance
with this rule is that it will deprive the complainant of a cause of action, which is a ground for a motion to
dismiss. If not invoked at the proper time, this ground is deemed waived and the court can then take
cognizance of the case and try it.149 (Emphasis supplied)
Hence, the doctrine of exhaustion of administrative remedies presupposes that the court has jurisdiction over
the subject matter of the complaint or petition. Otherwise, it can never have the power to take cognizance of
the case as contemplated by Soto.
While both the court and the administrative agency have jurisdiction over the subject matter, the general rule
is that the courts, because of comity, practicality, and convenience, will not interfere with the administrative
process until the process comes to an end.150 This is because availing administrative remedies entails lesser
expenses and results in a speedier resolution of controversies.151 On the other hand, since the court and the
administrative agency have concurrent jurisdiction, exceptions may be warranted by the
circumstances,152 and the court may choose to assume jurisdiction over the controversy.
Hence, when jurisdiction is exclusively granted to an administrative agency, the doctrine of exhaustion of
administrative remedies does not apply. Here, considering that the Civil Service Commission is granted
exclusive jurisdiction over cases involving personnel actions, the doctrine of primary administrative
jurisdiction, not the doctrine of exhaustion of administrative remedies, applies.
The exceptions to the doctrine of exhaustion of administrative remedies likewise do not apply because the
Regional Trial Court has no jurisdiction to resolve the dispute in the first place. In order for the exceptions
to apply, the court to which the petition was prematurely filed should have jurisdiction; otherwise, the orders
of the court would be null and void for lack of jurisdiction. Decisions or orders rendered by tribunals and
agencies that do not have subject matter jurisdiction are null and void. 153Hence, the exceptions to the
doctrine of exhaustion of administrative remedies should not be applicable since the Regional Trial Court,
the court to which the Petition for declaratory relief was filed, lacks subject matter jurisdiction, and any
order or decision rendered by it would be null and void.
Kilusang Bayan sa Paglilingkod ng mga Magtitinda ng Bagong Pamilihang Bayan ng Muntinlupa, Inc.
(KBMBPM) cited by private respondents finds no application here. In KBMBPM, petitioners questioned the
takeover by the Department of Agriculture of the management of petitioner KBMBPM, a service
cooperative organized by and composed of vendors of the New Muntinlupa Public Market.154 There is no
187
personnel action involved in KBMBPM. Hence, private respondents' reliance on the case is misplaced.
The ponencia held that "[w]hen respondents raised the issue of validity and constitutionality of [Customs
Personnel Order No. B-189-2013], the issue took the case beyond the scope of the [Civil Service
Commission's] jurisdiction because the matter is no longer limited to personnel action. Thus, the [Regional
Trial Court] did not abuse its discretion in taking cognizance of the action."155cralawrednad
The constitutional issues alleged in the Petition for declaratory relief do not suffice for the Regional Trial
Court to assume jurisdiction.
The Civil Service Commission cannot be ousted from its jurisdiction "by the simple expediency of
appending an allegedly constitutional or legal dimension to an issue" 156 that clearly involves a personnel
action.157cralawrednad
In Corsiga v. Judge Defensor,158 petitioner Eduardo Corsiga (Corsiga), "then Regional Irrigation Manager of
the [National Irrigation Administration], Region VI, issued Regional Office Memorandum (ROM) No. 52,
reassigning private respondent [Romeo Ortizo (Ortizo)] to [the] Aganan-Sta. Barbara River Irrigation
System[.]"159 Ortizo filed before the "Regional Trial Court of Iloilo City a complaint for prohibition and
injunction, with prayer for issuance of [a] Temporary Restraining Order and/or Writ of Preliminary
Injunction."160 He argued that the transfer or assignment without his consent is a violation of
his constitutional right to security of tenure.161 Corsiga moved to dismiss the Petition for lack of
jurisdiction.162cralawrednad
This court ruled that the Regional Trial Court had no jurisdiction over Ortizo's
Complaint.163 Hence:cralawlawlibrary
It is the intent of the Civil Service Law, in requiring the establishment of a grievance procedure in Rule XII,
Section 6 of the same rules, that decisions of lower level officials be appealed to the agency head, then to the
Civil Service Commission. Decisions of the Civil Service Commission, in turn, may be elevated to the Court
of Appeals. Under this set up, the trial court does not have jurisdiction over personnel actions and, thus,
committed an error in taking jurisdiction over Civil Case No. 22462. The trial court should have dismissed
the case on motion of petitioner and let private respondent question RMO[sic] No. 52 before the NIA
Administrator, and then the Civil Service Commission. As held in Mantala vs. Salvador, cases involving
personnel actions, reassignment included, affecting civil service employees, are within the exclusive
jurisdiction of the Civil Service Commission.164 (Emphasis supplied, citations omitted)
Despite allegations of Regional Office Memorandum No. 52's constitutional infirmities, this court still
upheld the exclusive jurisdiction of the Civil Service Commission over cases involving personnel actions.
In Department of Agrarian Reform v. Trinidad Valley Realty & Development Corporation,165 Trinidad
Valley Realty & Development Corporation and the other respondents (Trinidad Valley Realty &
Development Corporation, et al.) are registered owners of a parcel of land in Negros Oriental. 166 The
Department of Agrarian Reform placed a substantial portion of the land under the coverage of the
Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657. 167 Administrative Order No. 10,
Series of 1989, Administrative Orders No. 12, Series of 1989, No. 9, Series of 1990, and No. 2, Series of
1996, Administrative Order No. 10, Series of 1990, Joint DAR-LRA Memorandum Circular No. 20, Series
of 1997, and Executive Order No. 405, among others, (collectively, Orders) were then
issued.168cralawrednad
Private respondents Trinidad Valley Realty & Development Corporation, et al. filed before the Regional
Trial Court a Petition for declaration of unconstitutionality through certiorari, prohibition and mandamus
against the Land Registration Authority, the Department of Agrarian Reform, and the beneficiaries under the
Comprehensive Agrarian Reform Program questioning the Orders.169 This was later amended to an ordinary
action of annulment of land titles.170 In its Answer, the Department of Agrarian Reform asserted that
"jurisdiction over all agrarian reform matters is exclusively vested in the [Department of Agrarian
Reform,]"171 not in the regular courts. This court ruled that the Regional Trial Court had no jurisdiction. 172
The Court likewise ruled in the similar case of [Department of Agrarian Reform] v. Cuencathat "[a]ll
controversies on the implementation of the Comprehensive Agrarian Reform Program (CARP) fall under the
jurisdiction of the Department of Agrarian Reform (DAR), even though they raise questions that are also
legal or constitutional in nature." In said case, it was noted that the main thrust of the allegations in the
Complaint was the propriety of the Notice of Coverage and "not x x x the 'pure question of law' spawned by
the alleged unconstitutionality of EO 405 — but x x x the annulment of the DAR's Notice of Coverage." The
Court thus held that:cralawlawlibrary
To be sure, the issuance of the Notice of Coverage constitutes the first necessary step towards the
acquisition of private land under the CARP. Plainly then, the propriety of the Notice relates to the
implementation of the CARP, which is under the quasi-judicial jurisdiction of the DAR. Thus, the DAR
could not be ousted from its authority by the simple expediency of appending an allegedly constitutional
or legal dimension to an issue that is clearly agrarian.
The legal recourse undertaken by Trinidad Valley Realty and Development Corporation, et al. is on all-fours
with the remedy adopted by the private respondents in Cuenca. In this case, Trinidad Valley Realty and
Development Corporation, et al. cloaked the issue as a constitutional question — assailing the
constitutionality of administrative issuances promulgated to implement the agrarian reform law — in order
to annul the titles issued therein. In Cuenca, private respondents assailed the constitutionality of EO 45 in
order to annul the Notice of Coverage issued therein. The only difference is that in Cuenca, private
respondents directly filed with the RTC their complaint to obtain the aforesaid reliefs while in this case,
Trinidad Valley Realty and Development Corporation, et al. filed their original petition for certiorari with
the RTC after the protest of Trinidad Valley Realty and Development Corporation against the coverage of
its landholding under CARP was dismissed by the DAR Regional Director and such dismissal was affirmed
by DAR OIC Secretary Jose Mari B. Ponce. But in both cases, it is evident that the constitutional angle was
an attempt to exclude the cases from the ambit of the jurisdictional prescriptions under RA
6657.173 (Emphasis supplied, citations omitted)
Invocations of issues of validity and constitutionality of Customs Personnel Order No. B-189-2013 will not
suffice for the courts to assume jurisdiction, if the order sought to be declared invalid is a personnel action.
Since the questioned order is a personnel action, the exclusive jurisdiction of the Civil Service Commission
as the sole arbiter of controversies relating to the civil service must be upheld.
In any case, detail of government personnel to other offices does not involve and violate the employees'
security of tenure in the absence of any grave abuse of discretion or improper motive or
purpose.174cralawrednad
Hence, the Regional Trial Court has no jurisdiction over private respondents' Petition for declaratory relief.
IV.
Private respondents rely on Commissioner of Customs, et al. v. Hypermix Feeds Corporation.175 They argue
that based on Hypermix, "[t]he determination of whether a specific rule or set of rules issued by an
administrative agency contravenes the law or the [Constitution is within the jurisdiction of the regular
courts."176 They add that the "Constitution vests the power of judicial review or the power to declare a law,
treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation
in the courts, including the regional trial courts."177cralawrednad
188
In Hypermix, Hypermix Feeds Corporation filed a Petition for declaratory relief before the Regional Trial
Court, with the Petition challenging the validity and constitutionality of Customs Memorandum Order
(CMO) 27-2003.178 CMO 27-2003 classified wheat according to (1) importer or consignee; (2) country of
origin; and (3) port of discharge, and imposed different tariff rates depending on such classification. 179This
court concluded that "a petition for declaratory relief is the right remedy given the circumstances of the
case."180Hypermix cannot be applied because the circumstances in that case differ from the circumstances
here as Hypermix does not involve a personnel action.
V.
A petition for declaratory relief may prosper only if there is no breach or violation yet of the assailed
government regulation, and adequate relief is not available through other means or other forms of action or
proceeding.
Rule 63, Section 1 of the Rules of Court provides:cralawlawlibrary
SECTION 1. Who may file petition. - Any person interested under a deed, will, contract or other written
instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or any other
governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional
Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or
duties, thereunder. (Emphasis supplied)
In Republic v. Roque,181 this court enumerated the requisites for a petition for declaratory relief to
prosper:cralawlawlibrary
Case law states that the following are the requisites for an action for declaratory relief: first, the subject
matter of the controversy must be a deed, will, contract or other written instrument, statute, executive order
or regulation, or ordinance; second, the terms of said documents and the validity thereof are doubtful and
require judicial construction; third, there must have been no breach of the documents in question; fourth,
there must be an actual justiciable controversy or the "ripening seeds" of one between persons whose
interests are adverse; fifth, the issue must be ripe for judicial determination; and sixth, adequate relief is not
available through other means or other forms of action or proceeding. 182 (Emphasis in the original, citation
omitted)
The third and sixth requisites are absent. The Complaint before the lower court did not simply ask for a
declaration of a hypothetical breach. Adequate relief through the Civil Service Commission was also
available.
Executive Order No. 140 was published on September 17, 2013. According to Section 9, Executive Order
No. 140 shall take effect immediately. On September 17, 2013, Bureau of Customs Commissioner Rozzano
Rufmo B. Biazon issued Customs Personnel Order No. B-189-2013. On September 30, 2013, private
respondents filed their Petition for declaratory relief. There was no denial by private respondents that they
did not report for work upon Custom Personnel Order No B-189-2013's effectivity.183 Private respondents
Arnel C. Alcaraz, Ma. Lourdes V. Mangaoang, Romalino G. Valdez, Lilibeth S. Sandag, Ma. Liza S. Torres,
and Raymond P. Ventura only reported for work after the trial court's denial of their application for a writ of
preliminary injunction.184cralawrednad
By not reporting for work upon the issuance of Customs Personnel Order No. B-189-2013 on September 17,
2015, private respondents committed a breach of the Order. Since they committed the breach prior to the
filing of their Petition for declaratory relief, the petition is no longer available.
In Martelino, et al. v. National Home Mortgage Finance Corporation, et al.,185 petitioners (Martelino, et al.)
obtained housing loans from respondents National Home Mortgage Finance Corporation and Home
Development Mutual Fund.186 National Home Mortgage Finance Corporation and Home Development
Mutual Fund directly released the proceeds of the housing loans to the subdivision developer, Shelter
Philippines, Inc. (Shelter).187cralawrednad
Shelter did not complete the subdivision pursuant to its subdivision plan. 188 Martelino, et al. then filed a
Petition for declaratory relief to determine whether they can suspend payment to National Home Mortgage
Finance Corporation and Home Development Mutual Fund because of Shelter's failure to complete the
subdivision and whether interests and penalties should also be suspended. 189cralawrednad
This court found that at the time of the filing of their Petition for declaratory relief, Martelino, et al. already
suspended payment of their amortizations to National Home Mortgage Finance Corporation and Home
Development Mutual Fund.190 Hence, this court concluded that the Regional Trial Court cannot assume
jurisdiction over the Petition for declaratory relief.191 Hence:cralawlawlibrary
Indeed, under Section 1, Rule 63, a person must file a petition for declaratory relief before breach or
violation of a deed, will, contract, other written instrument, statute, executive order, regulation, ordinance or
any other governmental regulation. In this case, the petitioners had stated in their petition that respondents
assessed them interest and penalties on their outstanding loans, initiated foreclosure proceedings against
petitioner Rafael Martelino as evidenced by the notice of extra-judicial sale and threatened to foreclose the
mortgages of the other petitioners, all in disregard of their right to suspend payment to Shelter for its failure
to complete the subdivision. Said statements clearly mean one thing: petitioners had already suspended
paying their amortization payments. Unfortunately, their actual suspension of payments defeated the
purpose of the action to secure an authoritative declaration of their supposed right to suspend payment, for
their guidance. Thus, the RTC could no longer assume jurisdiction over the action for declaratory
relief because its subject initially unspecified, now identified as P.D. No. 957 and relied upon — correctly or
otherwise — by petitioners, and assumed by the RTC to be Rep. Act No. 8501, was breached before filing
the action. As we said in Tambunting, Jr. v. Sumabat:cralawlawlibrary
. . . The purpose of the action [for declaratory relief] is to secure an authoritative statement of the rights and
obligations of the parties under a statute, deed, contract, etc. for their guidance in its enforcement or
compliance and not to settle issues arising from its alleged breach. It may be entertained only before the
breach or violation of the statute, deed, contract, etc. to which it refers. Where the law or contract has
already been contravened prior to the filing of an action for declaratory relief, the court can no longer
assume jurisdiction over the action.... Under such circumstances, inasmuch as a cause of action has already
accrued in favor of one or the other party, there is nothing more for the court to explain or clarify short of a
judgment or final order.192 (Emphasis supplied, citations omitted)
In Aquino v. Municipality of Malay, Aklan,193 petitioner Crisostomo B. Aquino (Aquino) is "the president
and chief executive officer of Boracay Island West Cove Management Philippines, Inc. (Boracay West
Cove)."194 The Office of the Mayor of Malay, Aklan issued Executive Order No. 10, Series of 2011,
ordering the closure and demolition of a hotel owned by Boracay West Cove. 195 On June 10, 2011,
Executive Order No. 10 was implemented partially.196cralawrednad
To stop the implementation of Executive Order No. 10, Aquino filed a Petition for certiorari with prayer for
injunctive relief before the Court of Appeals.197 The Court of Appeals dismissed the Petition on the ground
that the correct remedy was for Aquino "to file a petition for declaratory relief with the Regional Trial
Court."198cralawrednad
This court disagreed with the Court of Appeals and stated:cralawlawlibrary
An action for declaratory relief presupposes that there has been no actual breach of the instruments involved
or of the rights arising thereunder. Since the purpose of an action for declaratory relief is to secure an
authoritative statement of the rights and obligations of the parties under a statute, deed, or contract for their
guidance in the enforcement thereof, or compliance therewith, and not to settle issues arising from an
189
alleged breach thereof, it may be entertained before the breach or violation of the statute, deed or contract to
which it refers. A petition for declaratory relief gives a practical remedy for ending controversies that have
not reached the state where another relief is immediately available; and supplies the need for a form of
action that will set controversies at rest before they lead to a repudiation of obligations, an invasion of rights,
and a commission of wrongs.
In the case at bar, the petition for declaratory relief became unavailable by [Executive Order No. 10's]
enforcement and implementation. The closure and demolition of the hotel rendered futile any possible
guidelines that may be issued by the trial court for carrying out the directives in the challenged [Executive
Order No. 10]. Indubitably, the CA erred when it ruled that declaratory relief is the proper remedy given
such a situation.199(Emphasis supplied, citation omitted)
In City of Lapu-Lapu v. Philippine Economic Zone Authority,200 the City of Lapu-Lapu and the Province of
Bataan demanded from the Philippine Economic Zone Authority payment of real property taxes. 201 The
Philippine Economic Zone Authority filed a Petition for declaratory relief before the Regional Trial Court,
"praying that the trial court declare it exempt from payment of real property taxes."202 This court ruled that
the Regional Trial Court had no jurisdiction to decide Philippine Economic Zone Authority's Petition for
declaratory relief.203 This court explained:cralawlawlibrary
We rule that the [Philippine Economic Zone Authority] erred in availing itself of a petition for declaratory
relief against the City. The City had already issued demand letters and real property tax assessment against
the [Philippine Economic Zone Authority], in violation of the [Philippine Economic Zone Authority's]
alleged tax-exempt status under its charter.The Special Economic Zone Act of 1995, the subject matter of
[Philippine Economic Zone Authority's] petition for declaratory relief, had already been breached. The trial
court, therefore, had no jurisdiction over the petition for declaratory relief.
There are several aspects of jurisdiction. Jurisdiction over the subject matter is "the power to hear and
determine cases of the general class to which the proceedings in question belong." It is conferred by law,
which may either be the Constitution or a statute. Jurisdiction over the subject matter means "the nature of
the cause of action and the relief sought." Thus, the cause of action and character of the relief sought as
alleged in the complaint are examined to determine whether a court had jurisdiction over the subject matter.
Any decision rendered by a court without jurisdiction over the subject matter of the action is
void.204 (Emphasis supplied, citations omitted)
Further, Tambunting, Jr. v. Spouses Sumabat205 declared that when a court assumed jurisdiction over a
Petition for declaratory relief when there was already a breach of the subject instrument or government
regulation, the orders made by that court would be null and void for want of
jurisdiction.206 Hence:cralawlawlibrary
In other words, a court has no more jurisdiction over an action for declaratory relief if its subject, i.e., the
statute, deed, contract, etc., has already been infringed or transgressed before the institution of the action.
Under such circumstances, inasmuch as a cause of action has already accrued in favor of one or the other
party, there is nothing more for the court to explain or clarify short of a judgment or final order.
Here, an infraction of the mortgage terms had already taken place before the filing of Civil Case No. C-
7496. Thus, the CFI lacked jurisdiction when it took cognizance of the case in 1979. And in the absence of
jurisdiction, its decision was void and without legal effect. As this Court held in Arevalo v.
Benedicto:cralawlawlibrary
Furthermore, the want of jurisdiction by a court over the subject-matter renders its judgment void and a
mere nullity, and considering that a void judgment is in legal effect no judgment, by which no rights are
divested, from which no rights can be obtained, which neither binds nor bars any one, and under which all
acts performed and all claims flowing out of are void, and considering further, that the decision, for want of
jurisdiction of the court, is not a decision in contemplation of law, and, hence, can never become executory,
it follows that such a void judgment cannot constitute a bar to another case by reason of res
judicata.207 (Emphasis supplied, citations omitted)
This was reiterated in Malana, et al. v. Tappa, et al.208 where this court declared:cralawlawlibrary
Where the law or contract has already been contravened prior to the filing of an action for declaratory relief,
the courts can no longer assume jurisdiction over the action. In other words, a court has no more jurisdiction
over an action for declaratory relief if its subject has already been infringed or transgressed before the
institution of the action.209
Private respondents argue that Customs Personnel Order No. B-189-2013 is void, producing no effect.
Hence, "there is actually no breach, real or imaginary, to speak of in this case." 210cralawrednad
Subscribing to petitioners' theory will render ineffective the phrase before breach or violation thereof found
in Section 1 of Rule 63 of the Rules of Court when a petitioner questions the validity of a written instrument
or governmental regulation. By arguing that the instrument or regulation questioned is void at the onset, a
petitioner may file any time a petition for declaratory relief with no regard to whether he or she violated the
"void" instrument or regulation.
Private respondents' belated compliance with Customs Personnel Order No. B-189-2013 cannot cure the
defect of want of jurisdiction. In Gomez v. Palomar, etc., et al.,211 this court declared:cralawlawlibrary
The prime specification of an action for declaratory relief is that it must be brought "before breach or
violation" of the statute has been committed. Rule 64, section 1 so provides. Section 6 of the same rule,
which allows the court to treat an action for declaratory relief as an ordinary action, applies only if the
breach or violation occurs after the filing of the action but before the termination thereof.
Hence, if, as the trial court itself admitted, there had been a breach of the statute before the filing of this
action, then indeed the remedy of declaratory relief cannot be availed of much less can the suit be converted
into an ordinary action.212 (Emphasis supplied, citation omitted)
Considering that there was already a breach of Customs Personnel Order No. B-189-2013 when private
respondents filed their Petition for declaratory relief, the Regional Trial Court can no longer act on the
Petition for want of jurisdiction.
For a Petition for declaratory relief to prosper, there should be no other adequate relief available to
petitioners.213 "If adequate relief is available through another form of action or proceeding, the other action
must be preferred over an action for declaratory relief."214cralawrednad
In Ferrer, Jr., et al. v. Mayor Roco, Jr., et al.,215 this court affirmed the dismissal of a Petition for
declaratory relief where the doctrine of primary administrative jurisdiction applied because it meant that
there was another adequate remedy available to petitioners.216cralawrednad
Here, private respondents' correct remedy was to file a Complaint or Petition before the Civil Service
Commission to assail their detail to the Customs Policy Research Office. Since they have another adequate
remedy available to them, their Petition for declaratory relief must fail.
All told, a Petition for declaratory relief was not an available remedy for private respondents. It was,
therefore, error for the Regional Trial Court to assume jurisdiction over private respondents' Petition for
declaratory relief. The Orders of the Regional Trial Court dated October 1, 2013, October 4, 2013, and
October 21, 2013 are declared void for want of jurisdiction. All other Orders of the Regional Trial Court
pursuant to private respondents' Petition for declaratory relief are also void for lack of jurisdiction.
The Regional Trial Court should be directed to dismiss private respondents' Petition for declaratory relief.
190
VI.
Customs Personnel Order No. B-189-2013 provides that it "shall be effective immediately and valid until
sooner revoked."217cralawrednad
Civil Service Commission Resolution No. 021181 entitled Policies on Detail and dated September 13, 2002
"govern[s] the detail of employees in all agencies of the government."218 Section 2 of Policies on Detail
provides:cralawlawlibrary
Section 2. Duration of the Detail - the detail shall be allowed only for a maximum period of one year.
Details beyond one year may be allowed provided it is with the consent of the detailed employee. The
extension or renewal of the period of the detail shall be within the authority of the mother agency.
If the employee believes that there is no justification for the detail, he/she may appeal his/her case to the
proper Civil Service Commission Regional Office. Pending appeal, the detail shall be executory unless
otherwise ordered by said regional office. Decision of said regional office may be further appealed to the
Commission en banc.219 (Emphasis supplied)
Customs Personnel Order No. B-189-2013 's provision stating that "[t]his Order shall be effective
immediately and valid until sooner revoked" appears contrary to Section 2 of Resolution No. 02-1181.
Pursuant, however, to Section 2 of Civil Service Commission Resolution No. 02-1181, Customs Personnel
Order No. B-189-2013 should be read as valid only for a period of one (1) year. Consistency in executive
issuances is of utmost importance.220 As much as possible, it is the duty of the courts to harmonize and
reconcile them.221cralawrednad
In Philippine International Trading Corporation v. Presiding Judge Angeles,222 this court
ruled:cralawlawlibrary
Thus, there is no real inconsistency between LOI 444 and EO 133. There is, admittedly, a rearranging of the
administrative functions among the administrative bodies affected by the edict, but not an abolition of
executive power. Consistency in statutes as in executive issuances, is of prime importance, and, in the
absence of a showing to the contrary, all laws are presumed to be consistent with each other. Where it is
possible to do so, it is the duty of courts, in the construction of statutes, to harmonize and reconcile them,
and to adopt a construction of a statutory provision which harmonizes and reconciles it with other statutory
provisions. The fact that a later enactment may relate to the same subject matter as that of an earlier statute
is not of itself sufficient to cause an implied repeal of the latter, since the law may be cumulative or a
continuation of the old one.223 (Emphasis supplied, citations omitted)
Similarly, this court should also uphold as much as possible the validity of Customs Personnel Order No. B-
189-2013 as a valid exercise of executive power to conform to the Policies on Detail.
"Every inten[t] of the law should lean towards its validity, not its invalidity."224 Hence, the duration of
Customs Personnel Order No. B-189-2013, being independent and severable from the order of detail itself,
should be the only provision declared void.
Since there is no record that private respondents consented to be detailed for more than one (1) year from
September 17, 2013, Customs Personnel Order No. B-189-2013, while effective for the duration of one (1)
year from enactment, already ceased to take effect.
The ponencia ruled that Customs Personnel Order No. B-189-2013 violates Section 3 of Executive Order
No. 140 because at the time of its issuance, the Customs Policy Research Office had no organic personnel
yet.225cralawred The ponencia also ruled that the Department of Finance Secretary had not yet issued rules
and regulations for the Customs Policy Research Office. 226cralawrednad
There is nothing in Executive Order No. 140 that requires that the organic personnel of the Customs Policy
Research Office must first be organized and that rules must first be issued by the Department of Finance
Secretary before the Bureau of Customs can start forming its team that will augment and reinforce the
organic personnel of the Customs Policy Research Office. Courts should avoid as much as possible any
construction invalidating administrative issuances.227 Unless there is a clear violation of Executive Order
No. 140, Customs Personnel Order No. B-189-2013 should remain valid.

ACCORDINGLY, the Petition should be GRANTED. Private respondents' Petition for declaratory relief
filed before the Regional Trial Court should be DISMISSED for lack of jurisdiction.

191
 EN BANC
July 25, 2017
G.R. No. 228628
REP. REYNALDO V. UMALI, in his capacity as Chairman of the House of Representatives
Committee on Justice and Ex Officio Member of the JBC, Petitioner
vs.
THE JUDICIAL AND BAR COUNCIL, chaired by THE HON. MARIA LOURDES P.A. SERENO,
Chief Justice and Ex Officio Chairperson, Respondent
DECISION
VELASCO, JR., J.:
Stare decisis et non quieta movere. This principle of adherence to precedents has not lost its luster and
continues to guide the bench in keeping with the need to maintain stability in the law. 1
This Petition for Certiorari and Mandamus under Rule 65 of the Rules of Court filed directly with this Court
by herein petitioner Rep. Reynaldo V. Umali, current Chair of the House of Representatives Committee on
Justice, impugns the present-day practice of six-month rotational representation of Congress in the Judicial
and Bar Council (JBC) for it unfairly deprives both Houses of Congress of their full participation in the said
body. The aforementioned practice was adopted by the JBC in light of the ruling in Chavez v. Judicial and
Bar Council.2
As an overview, in Chavez, the constitutionality of the practice of having two representatives from both
houses of Congress with one vote each in the JBC, thus, increasing its membership from seven to eight, was
challenged. With that, this Court examined the constitutional provision that states the composition of the
JBC, that is, Section 8(1), Article VIII of the 1987 Constitution, which reads:
SECTION 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court
composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of the
Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, a retired Member
of the Supreme Court, and a representative of the private sector. (Emphasis supplied.)
Following a painstaking analysis, this Court, in a Decision dated July 17, 2012, declared the said practice of
having two representatives from Congress with one vote each in the JBC unconstitutional. This Court
enunciated that the use of the singular letter "a" preceding "representative of the Congress" in the
aforequoted provision is unequivocal and leaves no room for any other construction or interpretation. The
same is indicative of the Framers' intent that Congress may designate only one representative to the JBC.
Had it been otherwise, they could have, in no uncertain terms, so provided. This Court further articulated
that in the context of JBC representation, the term "Congress" must be taken to mean the entire legislative
department as no liaison between the two houses exists in the workings of the JBC. There is no mechanism
required between the Senate and the House of Representatives in the screening and nomination of judicial
officers. Moreover, this Court, quoting the keen observation of Retired Supreme Court Associate Justice
192
Consuelo Ynares-Santiago, who is also a JBC Consultant, stated that the ex officio members of the JBC
consist of representatives from the three main branches of government, to wit: the Chief Justice of the
Supreme Court representing the judiciary, the Secretary of Justice representing the executive, and a
representative of the Congress representing the legislature. It can be deduced therefrom that the
unmistakable tenor of Section 8(1), Article VIII of the 1987 Constitution was to treat each ex officio member
as representing one co-equal branch of government having equal say in the choice of judicial nominees.
Now, to allow the legislature to have more than one representative in the JBC would negate the principle of
equality among these three branches of the government, which is enshrined in the Constitution. 3
The subsequent motion for reconsideration thereof was denied in a Resolution dated April 16, 2013, where
this Court reiterated that Section 8(1), Article VIII of the 1987 Constitution providing for "a representative
of the Congress" in the JBC is clear and unambiguous and does not need any further interpretation. Besides,
this Court is not convinced that the Framers simply failed to adjust the aforesaid constitutional provision, by
sheer inadvertence, to their decision to shift to a bicameral form of legislature. Even granting that there was,
indeed, such omission, this Court cannot supply the same. Following the rule of casus omissus, that is, a
case omitted is to be held as intentionally omitted, this Court cannot under its power of interpretation supply
the omission even if the same may have resulted from inadvertence or it was not foreseen or contemplated
for to do so would amount to judicial legislation. Ergo, this Court has neither power nor authority to add
another member in the JBC simply by judicial construction. 4
In light of these Decision and Resolution, both Houses of Congress agreed on a six-month rotational
representation in the JBC, wherein the House of Representatives will represent Congress from January to
June and the Senate from July to December.5This is now the current practice in the JBC. It is by reason of
this arrangement that the votes cast by the petitioner for the selection of nominees for the vacancies of then
retiring Supreme Court Associate Justices Jose P. Perez (Perez) and Arturo Brion (Brion) were not counted
by the JBC during its En Banc deliberations held last December 2 and 9, 2016. Instead, the petitioner's votes
were simply placed in an envelope and sealed subject to any further disposition as this Court may direct in a
proper proceeding.6 This is the root of the present controversy that prompted the petitioner to file the instant
Petition for Certiorari and Mandamus based on the following grounds:
I.
THE WRIT OF CERTIORARI IS PROPER TO ENJOIN THE JBC TO CORRECT ITS UNWARRANTED
DENIAL OF THE VOTES REGISTERED BY [HEREIN PETITIONER] DURING THE EN BANC
DELIBERATIONS ON DECEMBER 2 AND 9, 2016 BECAUSE THE DECISION IN
THE CHAVEZ CASE IS DEFECTIVE/FLA WED.
II.
THE WRIT OF MANDAMUS IS PROPER TO MANDATE THE JBC TO ACCEPT/COUNT SAID
VOTES CAST BY [PETITIONER] BECAUSE THE RECONSTITUTION OF THE JBC IS
DEFECTIVE/FLA WED AND UNCONSTITUTIONAL.
III.
THE PRESENT PRACTICE OF THE JBC IN ALLOWING ONLY ONE REPRESENTATIVE FROM
THE SENATE OR THE HOUSE OF [REPRESENTATIVES] TO PARTICIPATE AND VOTE ON A [6-
MONTH] ROTATION BASIS IS IMPRACTICABLE, ABSURD AND UNCONSTITUTIONAL,
CREATES AN [INSTITUTIONAL] IMBALANCE BETWEEN THE TWO INDEPENDENT CHAMBERS
OF CONGRESS, AND INSTITUTES AN INHERENT AND CONTINUING CONSTITUTIONAL
DEFECT IN THE PROCEEDINGS OF THE JBC THAT ADVERSELY AFFECTS APPOINTMENTS TO
THE JUDICIAL DEPARTMENT, INCLUDING AND PARTICULARLY [THIS COURT].
IV.
THE 1987 CONSTITUTION CLEARLY REQUIRES PARTICIPATION AND VOTING BY
REPRESENTATIVES FROM THE SENATE AND THE HOUSE OF REPRESENTATIVES IN JBC
PROCEEDINGS AND ALL APPOINTMENTS TO THE JUDICIAL DEPARTMENT, INCLUDING AND
PARTICULARLY [TIDS COURT].
A. THE BICAMERAL NATURE OF THE LEGISLATIVE DEPARTMENT WAS BELATEDLY
DECIDED UNDER THE 1987 CONSTITUTION, BUT MUST BE DEEMED AS INCORPORATED AND
MODIFYING THE JBC STRUCTURE UNDER SECTION 8(1)[,] ARTICLE VIII OF THE [1987]
CONSTITUTION, TO GIVE FULL MEANING TO THE INTENT OF ITS FRAMERS.
B. THERE WAS A CLEAR OVERSIGHT AND TECHNICAL OMISSION INVOLVING SECTIONS
8(1)[,] ARTICLE VIII OF THE [1987] CONSTITUTION THAT SHOULD BE RECTIFIED BY [TIDS
COURT].
C. THE FULL REPRESENTATION OF CONGRESS IN THE JBC IS POSSIBLE ONLY WITH
PARTICIPATING AND VOTING FROM REPRESENTATIVES FROM THE TWO INDEPENDENT
CHAMBERS, OTHERWISE THE JBC PROCEEDINGS ARE UNCONSTITUTIONAL.
D. THE PRESENCE OF THE SENATE AND [THE] HOUSE OF REPRESENTATIVES MEMBERS IN
THE JBC UPHOLDS THE CO-EQUAL REPRESENTATION IN THE COUNCIL OF THE THREE
MAIN BRANCHES OF GOVERNMENT.7
As instructed by this Court,8 both Houses of Congress, through the Manifestation of the Office of the
Solicitor General (OSG), which acts as the People's Tribune in this case, and the JBC commented on the
Petition.
The OSG wants this Court to revisit Chavez for its alleged unexecutability arising from constitutional
constraints. It holds that the current practice of alternate representation was only arrived at because of time
constraints and difficulty in securing the agreement of both Houses of Congress. 9 And, since the
Constitution itself did not clearly state who is the Congress' representative in the JBC, the provision,
therefore, regarding the latter's composition must be harmonized to give effect to the current bicameral
system.10 With this in view, the OSG believes that it is only proper for both Houses of Congress to be given
equal representation in the JBC as neither House can bind the other for there can be no single member of
either House who can fully represent the entire legislature for to do so would definitely result in absurdity. 11
Further, the OSG avers that Chavez's strict interpretation of Section 8(1), Article VIII of the 1987
Constitution violates the very essence of bicameralism and sets aside the inherent dichotomy between the
two Houses of Congress.12 To note, a JBC member's votes are reflective of the position and the interest such
193
member wants to uphold, such that when the representatives from each House of Congress vote for a certain
judicial nominee, they carry the interests and views of the group they represent. Thus, when only one would
represent both Houses of Congress in the JBC, the vote would not be representative of the interests
embodied by the Congress as a whole.13
In the same way, the OSG contends that the bicameral nature of the legislature strictly adheres to the distinct
and separate personality of both Houses of Congress; thus, no member of Congress can represent the entire
Congress. Besides, the phrase "a representative of the Congress" in Section 8(1), Article VIII of the 1987
Constitution is qualified by the phrase "ex officio members." The ex officio nature of the position derives its
authority from the principal office. It, thus, follows that each house of Congress must be represented in the
JBC.14
Also, the OSG states that the constitutional intent in creating the JBC is to ensure community representation
from the different sectors of society, as well as from the three branches of government, and to eliminate
partisan politics in the selection of members of the judiciary. The focus, therefore, is more on proper
representation rather than qualitative limitation. It even insists that when the Framers deliberated on Section
8(1 ), Article VIII of the 1987 Constitution, they were still thinking of a unicameral legislature, thereby,
giving Congress only one representative to the JBC. However, with the shift from unicameralism to
bicameralism, "a representative of the Congress" in the JBC should now be understood to mean one
representative from each House of Congress. For had it been the intention of the Framers for the JBC to be
composed only of seven members, they would have specified the numbers just like in the other
constitutional provisions. As such, the membership in the JBC should not be limited to seven members.
More so, an eventual deadlock in the voting would not pose any problem since the voting in the JBC is not
through a "yes" or a "no" vote.15
As its final argument, the OSG maintains that while Congress' participation in the JBC may be non-
legislative, still, the involvement of both Houses of Congress in its every proceeding is indispensable, as
each House represents different constituencies and would necessarily bring a unique perspective to the
recommendation process of the JBC.16
For its part, the JBC vehemently pleads that the present Petition be dismissed as its adopted rotational
scheme and the necessary consequences thereof are not the proper subjects of a certiorari and even a
mandamus petition for the same do not involve an exercise of judicial, quasi-judicial or ministerial
functions. Apart from that, it committed no grave abuse of discretion in refusing to recognize, accept and
count the petitioner's votes during its En Banc deliberations last December 2 and 9, 2016 for it merely acted
in accordance with the Constitution and with the ruling in Chavez. More so, there is no showing that the
petitioner has no plain, speedy and adequate remedy other than this Petition for nowhere herein did he assert
that he exerted all efforts to have his concern addressed by Congress, such as asking the latter to repudiate
the rotational arrangement. Thus, for the petitioner's failure to exhaust all remedies available to him in
Congress, he deprived the latter of an opportunity to address the matter. Also, the practice and acquiescence
of both Houses of Congress to such an arrangement operates as an estoppel against any member thereof to
deny its validity. As regards a writ of mandamus, it cannot be issued to compel the JBC to count the
petitioner's votes for it will not lie to control the performance of a discretionary act.17
The JBC further enunciates that the petitioner has no locus standi to institute this Petition in his capacity as
Chairman of the House of Representatives Committee on Justice and Ex Officio Member of the JBC without
the requisite resolution from both Houses of Congress authorizing him to sue as a member thereof, which
absence is a fatal defect rendering this Petition dismissible.18
In the same vein, the JBC asseverates that this Petition should also be dismissed as the allegations herein are
mere rehash of the arguments and dissents in Chavez, which have already been exhaustively litigated and
settled therein by this Court, more in particular, the interpretation of Section 8(1), Article VIII of the 1987
Constitution, hence, barred by the doctrine of stare decisis. Similarly, there exists no substantial reason or
even supervening event or material change of circumstances that warrants Chavez's reversal.19
The JBC likewise insists that it was the intent of the Framers of the Constitution for the JBC to have only
seven members. The reason for that was laid down in Chavez, that is, to provide a solution should there be a
stalemate in the voting. As to the alleged oversight and technical omission of the Framers in changing the
provision on the JBC to reflect the bicameral nature of Congress, these are flimsy excuses to override the
clear provision of the Constitution and to disturb settled jurisprudence. As explained in Chavez, Congress'
membership in the JBC was not in the interest of a certain constituency but in reverence to it as a major
branch of government.20
Last of all, the JBC holds that should this Petition be granted, there would be an imbalance in favor of
Congress with respect to the representation in the JBC of the three main and co-equal branches of the
government. For the unmistakable tenor of Section 8(1), Article VIII of the 1987 Constitution was to treat
each ex officio member as representing one co-equal branch of government. And, even assuming that the
current six-month rotational scheme in the JBC created an imbalance between the two Houses of Congress,
it is not within the power of this Court or the JBC to remedy such imbalance. For the remedy lies in the
amendment of this constitutional provision.21
Given the foregoing arguments, the issues ought to be addressed by this Court can be summed up into: (1)
whether the petitioner has locus standi to file this Petition even without the requisite resolution from both
Houses of Congress permitting him to do so; (2) whether the petitioner's direct resort to this Court via a
Petition for Certiorari and Mandamus is the plain, speedy and adequate remedy available to him to assail
the JBC's adoption of the rotational representation leading to the non-counting of his votes in its En Banc
deliberations last December 2 and 9, 2016; (3) whether the JBC acted with grave abuse of discretion in
adopting the six-month rotational scheme of both Houses of Congress resulting in the non-counting of the
petitioner's votes in its En Banc deliberations last December 2 and 9, 2016; (4) whether the JBC can be
compelled through mandamus to count the petitioner's votes in its En Banc deliberations last December 2
and 9, 2016; and (4) whether this Court's ruling in Chavez applies as stare decisis to the present case.
Before delving into the above-stated issues, this Court would like to note that this Petition was primarily
filed because of the non-counting of the petitioner's votes in the JBC En Banc deliberations last December 2
and 9, 2016 held for the purpose of determining, among others, who will be the possible successors of the
then retiring Associate Justices of the Supreme Court Perez and Brion, whose retirements were set on
December 14 and 29, 2016, respectively. The list of nominees will then be forwarded to the President as the
appointing authority. With the appointments of Associate Justices Samuel R. Martires (Martires) and Noel
G. Tijam (Tijam) on March 2 and 8, 2017, respectively, this Petition has now been rendered moot insofar as
the petitioner's prayers to (1) reverse and set aside the JBC En Banc deliberations last December 2 and 9,
2016; and (2) direct the JBC to count his votes therein as its ex officio member,22 are concerned.
As a rule, courts do not entertain moot questions. An issue becomes moot and academic when it ceases to
present a justiciable controversy so that a declaration on the issue would be of no practical use or value. This
notwithstanding, the Court in a number of cases held that the moot and academic principle is not a magical
formula that can automatically dissuade the courts from resolving a case. Courts will still decide cases
otherwise, moot and academic if: (1) there is a grave violation of the Constitution; (2) the exceptional
194
character of the situation and the paramount public interest is involved; (3) when the constitutional issue
raised requires formulation of controlling principles to guide the bench, the bar, and the public; and (4) the
case is capable of repetition yet evading review.23Considering that all the arguments herein once again boil
down to the proper interpretation of Section 8(1), Article VIII of the 1987 Constitution on congressional
representation in the JBC, this Court deems it proper to proceed on deciding this Petition despite its
mootness to settle the matter once and for all.
Having said that, this Court shall now resolve the issues in seriatim.
On petitioner's locus standi. The petitioner brings this suit in his capacity as the current Chairman of the
House of Representatives Committee on Justice and Ex Officio Member of the JBC. His legal standing was
challenged by the JBC for lack of an enabling resolution for that purpose coming from both Houses of
Congress.
Locus standi or legal standing is defined as a personal and substantial interest in a case such that the party
has sustained or will sustain direct injury as a result of the challenged governmental act. It requires a
personal stake in the outcome of the controversy as to assure the concrete adverseness which sharpens the
presentation of issues upon which the court so largely depends for illumination of difficult constitutional
questions.24 With that definition, therefore, a party will be allowed to litigate only when he can demonstrate
that (1) he has personally suffered some actual or threatened injury because of the allegedly illegal conduct
of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be
redressed by the remedy being sought.25Otherwise, he/she would not be allowed to litigate. Nonetheless, in a
long line of cases, concerned citizens, taxpayers and legislators when specific requirements have been met
have been given standing by this Court. This was succinctly explained in Francisco, Jr. v. The House of
Representatives, thus:
When suing as a citizen, the interest of the petitioner assailing the constitutionality of a statute must be direct
and personal. He must be able to show, not only that the law or any government act is invalid, but also that
he sustained or is in imminent danger of sustaining some direct injury as a result of its enforcement, and not
merely that he suffers thereby in some indefinite way. It must appear that the person complaining has been
or is about to be denied some right or privilege to which he is lawfully entitled or that he is about to be
subjected to some burdens or penalties by reason of the statute or act complained of. In fine, when the
proceeding involves the assertion of a public right, the mere fact that he is a citizen satisfies the requirement
of personal interest.
In the case of a taxpayer, he is allowed to sue where there is a claim that public funds are illegally disbursed,
or that public money is being deflected to any improper purpose, or that there is a wastage of public funds
through the enforcement of an invalid or unconstitutional law. Before he can invoke the power of judicial
review, however, he must specifically prove that he has sufficient interest in preventing the illegal
expenditure of money raised by taxation and that he would sustain a direct injury as a result of the
enforcement of the questioned statute or contract. It is not sufficient that he has merely a general interest
common to all members of the public.
xxxx
As for a legislator, he is allowed to sue to question the validity of any official action which he claims
infringes his prerogatives as a legislator. Indeed, a member of the House of Representatives has standing to
maintain inviolate the prerogatives, powers and privileges vested by the Constitution in his
office.26 (Emphasis and underscoring supplied.)
The legal standing of each member of Congress was also upheld in Philippine Constitution Association v.
Enriquez,27 where this Court pronounced that:
The legal standing of the Senate, as an institution, was recognized in Gonzales v. Macaraig, Jr. (citation
omitted). In said case, 23 Senators, comprising the entire membership of the Upper House of Congress, filed
a petition to nullify the presidential veto of Section 55 of the GAA of 1989. The filing of the suit was
authorized by Senate Resolution No. 381, adopted on February 2, 1989, and which reads as follows:
Authorizing and Directing the Committee on Finance to Bring in the Name of the Senate of the Philippines
the Proper Suit with the Supreme Court of the Philippines contesting the Constitutionality of the Veto by the
President of Special and General Provisions, particularly Section 55, of the General Appropriation Bill of
1989 (H.B. No. 19186) and For Other Purposes.
In the United States, the legal standing of a House of Congress to sue has been recognized (citation omitted).
While the petition in G.R. No. 113174 was filed by 16 Senators, including the Senate President and the
Chairman of the Committee on Finance, the suit was not authorized by the Senate itself. Likewise, the
petitions in G.R. Nos. 113766 and 113888 were filed without an enabling resolution for the purpose.
Therefore, the question of the legal standing of petitioners in the three cases becomes a preliminary issue
before this Court can inquire into the validity of the presidential veto and the conditions for the
implementation of some items in the GAA of 1994.
We rule that a member of the Senate, and of the House of Representatives for that matter, has the legal
standing to question the validity of a presidential veto or a condition imposed on an item in an appropriation
bill.
Where the veto is claimed to have been made without or in excess of the authority vested on the President
by the Constitution, the issue of an impermissible intrusion of the Executive into the domain of the
Legislature arises (citation omitted).
To the extent the powers of Congress are impaired, so is the power of each member thereof, since his office
confers a right to participate in the exercise of the powers of that institution (citation omitted).
An act of the Executive which injures the institution of Congress causes a derivative but nonetheless
substantial injury, which can be questioned by a member of Congress (citation omitted). In such a case, any
member of Congress can have a resort to the courts.
Former Chief Justice Enrique M. Fernando, as Amicus Curiae, noted:
This is, then, the clearest case of the Senate as a whole or individual Senators as such having a substantial
interest in the question at issue. It could likewise be said that there was the requisite injury to their rights as
Senators. It would then be futile to raise any locus standi issue. Any intrusion into the domain appertaining
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to the Senate is to be resisted. Similarly, if the situation were reversed, and it is the Executive Branch that
could allege a transgression, its officials could likewise file the corresponding action. What cannot be denied
is that a Senator has standing to maintain inviolate the prerogatives, powers and privileges vested by the
Constitution in his office (citation omitted).28 (Emphases and underscoring supplied.)
It is clear therefrom that each member of Congress has a legal standing to sue even without an enabling
resolution for that purpose so long as the questioned acts invade the powers, prerogatives and privileges of
Congress. Otherwise stated, whenever the acts affect the powers, prerogatives and privileges of Congress,
anyone of its members may validly bring an action to challenge the same to safeguard and maintain the
sanctity thereof.
With the foregoing, this Court sustains the petitioner's legal standing as Member of the House of
Representatives and as the Chairman of its Committee on Justice to assail the alternate representation of
Congress in the JBC, which arrangement led to the non-counting of his votes in its En Banc deliberations
last December 2 and 9, 2016, as it allegedly affects adversely Congress' prerogative to be fully represented
before the said body.
On petitioner's direct resort to this Court via certiorari petition. The JBC questions the propriety of the
petitioner's direct resort to this Court via the present Petition to assail its adoption of the rotational
representation of Congress resulting in the non-counting of his votes in its En Banc deliberations last
December 2 and 9, 2016. The JBC insists that the said scheme was a creation of Congress itself; as such, the
petitioner's plain, speedy and adequate remedy is to appeal to Congress to repudiate the same. Direct resort
to this Court should not be allowed if there is a remedy available to the petitioner before Congress.
Generally, the writ of certiorari can only be availed of in the absence of an appeal or any plain, speedy and
adequate remedy in the ordinary course of law. In Bordomeo v. Court of Appeals, however, this Court
clarified that it is inadequacy that must usually determine the propriety of certiorari and not the mere
absence of all other remedies and the danger of failure of justice without the writ. A remedy is considered
plain, speedy and adequate if it will promptly relieve the petitioner from the injurious effects of the
judgment, order, or resolution of the lower court or agency.29
In the same way, as a matter of policy, direct resort to this Court will not be entertained unless the redress
desired cannot be obtained in the appropriate lower courts, and exceptional and compelling circumstances,
such as in cases involving national interest and those of serious implications, justify the availment of the
extraordinary remedy of the writ of certiorari, calling for the exercise of its primary jurisdiction.30 In The
Diocese of Bacolod v. Commission on Elections,31 and again in Maza v. Turla,32this Court took pains in
enumerating the circumstances that would warrant a direct resort to this Court, to wit: (1) when there are
genuine issues of constitutionality that must be addressed at the most immediate time; (2) when the issues
involved are of transcendental importance; (3) cases of first impression as no jurisprudence yet exists that
will guide the lower courts on this matter; (4) the constitutional issues raised are better decided by this court;
(5) the time element presented in this case cannot be ignored; (6) the filed petition reviews the act of a
constitutional organ; (7) petitioners rightly claim that they had no other plain, speedy, and adequate remedy
in the ordinary course of law; and (8) the petition includes questions that are dictated by public welfare and
the advancement of public policy, or demanded by the broader interest of justice, or the orders complained
of were found to be patent nullities, or the appeal was considered as clearly an inappropriate remedy. 33
Here, while this Court agrees with the JBC that the petitioner's preliminary remedy to question the rotational
arrangement of Congress is to ask the latter to repudiate the same, this, however, cannot be considered plain,
speedy and adequate. This Court is, thus, inclined to sustain the petitioner's direct resort to this Court not
only because it is the plain, speedy and adequate remedy available to him but also by reason of the
constitutional issues involved herein and the urgency of the matter. As correctly pointed out by the OSG, the
Constitution mandates that any vacancy to the office of an Associate Justice of the Supreme Court must be
filled up within the 90-day period from its occurrence. Therefore, the JBC must submit the list of nominees
prior to the start of that period. As the nominations covered by the questioned December 2016 JBC En Banc
deliberations were intended for vacancies created by then Associate Justices Perez and Brion, who
respectively retired last December 14 and 29, 2016, hence, any resort to Congress during that time would
already be inadequate since the JBC list of nominees would be submitted any moment to the Office of the
President for the appointment of the next Associate Justices of the Supreme Court. Since time is of the
essence, the petitioner's direct resort to this Court is warranted.
On the alleged grave abuse of discretion of the JBC in adopting the rotational representation of Congress
correctible by certiorari. The petitioner ascribed grave abuse of discretion on the part of the JBC in its
adoption of the rotational scheme, which led to the non-counting of his votes in its En Banc deliberations
last December 2 and 9, 2016, as it deprives Congress of its full representation therein. The JBC, on the
other hand, believes otherwise for it merely acted in accordance with the mandate of the Constitution and
with the ruling in Chavez. Also, such rotational scheme was a creation of Congress, which it merely
adopted.
Certiorari and Prohibition under Rule 65 of the present Rules of Court are the two special civil actions used
for determining and correcting grave abuse of discretion amounting to lack or excess of jurisdiction. The
sole office of the writ of certiorari is the correction of errors of jurisdiction, which necessarily includes the
commission of grave abuse of discretion amounting to lack of jurisdiction. 34 The burden is on the petitioner
to prove that the respondent tribunal committed not merely a reversible error but also a grave abuse of
discretion amounting to lack or excess of jurisdiction. Showing mere abuse of discretion is not enough, for
the abuse must be shown to be grave. Grave abuse of discretion means either that the judicial or quasi-
judicial power was exercised in an arbitrary or despotic manner by reason of passion or personal hostility, or
that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to perform the duty
enjoined or to act in contemplation of law, such as when such judge, tribunal or board exercising judicial or
quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction. 35
But, the remedies of certiorari and prohibition are necessarily broader in scope and reach before this Court
as the writs may be issued to correct errors of jurisdiction committed not only by a tribunal, corporation,
board or officer exercising judicial, quasi-judicial or ministerial functions but also to set right, undo and
restrain any act of grave abuse of discretion amounting to lack or excess of jurisdiction by any branch or
instrumentality of the Government, even if the latter does not exercise judicial, quasi-judicial or ministerial
functions. Thus, they are appropriate remedies to raise constitutional issues and to review and/or prohibit or
nullify the acts of legislative and executive officials.36
Here, it is beyond question that the JBC does not fall within the scope of a tribunal, board, or officer
exercising judicial or quasi-judicial functions.1âwphi1 Neither did it act in any judicial or quasi-judicial
capacity nor did it assume any performance of judicial or quasi-judicial prerogative in adopting the
rotational scheme of Congress, which was the reason for not counting the votes of the petitioner in its En
Banc deliberations last December 2 and 9, 2016. But, despite this, its act is still not beyond this Court's
reach as the same is correctible by certiorari if it is tainted with grave abuse of discretion even if it is not
196
exercising judicial and quasi-judicial functions. Now, did the JBC abuse its discretion in adopting the six-
month rotational arrangement and in not counting the votes of the petitioner? This Court answers in the
negative. As correctly pointed out by the JBC, in adopting the said arrangement, it merely acted pursuant to
the Constitution and the Chavez ruling, which both require only one representative from Congress in the
JBC. It cannot, therefore, be faulted for simply complying with the Constitution and jurisprudence.
Moreover, said arrangement was crafted by both Houses of Congress and the JBC merely adopted the same.
By no stretch of imagination can it be regarded as grave abuse of discretion on the part of the JBC.
With the foregoing, despite this Court's previous declaration that certiorari is the plain, speedy and adequate
remedy available to petitioner, still the same cannot prosper for the petitioner's failure to prove that the JBC
acted with grave abuse of discretion in adopting the rotational scheme.
On the propriety of mandamus. It is essential to the issuance of a writ of mandamus that the applicant has a
clear legal right to the thing demanded and it must be the imperative duty of the respondent to perform the
act required. The burden is on the petitioner to show that there is such a clear legal right to the performance
of the act, and a corresponding compelling duty on the part of the respondent to perform the act. As an
extraordinary writ, it lies only to compel an officer to perform a ministerial duty, not a discretionary
one.37 A clear line demarcates a discretionary act from a ministerial one. A purely ministerial act is one
which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the
mandate of legal authority, without regard to or the exercise of his own judgment upon the propriety or
impropriety of the act done.38 On the other hand, if the law imposes a duty upon a public officer and gives
him the right to decide how or when the duty shall be performed, such duty is discretionary and not
ministerial. The duty is ministerial only when the discharge of the same requires neither the exercise of
official discretion or judgment.39 Clearly, the use of discretion and the performance of a ministerial act are
mutually exclusive. Further, the writ of mandamus does not issue to control or review the exercise of
discretion or to compel a course of conduct.40
In the case at bench, the counting of votes in the selection of the nominees to the judiciary may only be
considered a ministerial duty of the JBC if such votes were cast by its rightful members and not by someone,
like the petitioner, who is not considered a member during the En Banc deliberations last December 2 and 9,
2016. For during the questioned period, the lawful representative of Congress to the JBC is a member of the
Senate and not of the House of Representatives as per their agreed rotational scheme. Considering that a
member of the Senate already cast his vote therein, the JBC has the full discretion not to count the votes of
the petitioner for it is mandated by both the Constitution and jurisprudence to maintain that Congress will
only have one representative in the JBC. As the act of the JBC involves a discretionary one, accordingly,
mandamus will not lie.
On the application of Chavez as stare decisis in this case. The petitioner strongly maintains
that Chavez must be revisited and reversed due to its unexecutability. But the JBC insists that the arguments
herein are mere rehash of those in Chavez, hence, already barred by the doctrine of stare decisis. Also, there
is no cogent reason for Chavez's reversal.
This Court takes another glance at the arguments in Chavez and compares them with the present arguments
of the petitioner. A careful perusal, however, reveals that, although the petitioner questioned the JBC's
adoption of the six-month rotational representation of Congress leading to the non-counting of his votes in
its En Banc deliberations last December 2 and 9, 2016, the supporting arguments hereof still boil down to
the proper interpretation of Section 8(1), Article VIII of the 1987 Constitution. Hence, being mere rehash of
the arguments in Chavez, the application of the doctrine of stare decisis in this case is inevitable. More so,
the petitioner failed to present strong and compelling reason not to rule this case in the same way that this
Court ruled Chavez.
As stated in the beginning of this ponencia, stare decisis et non quieta movere is a doctrine which means to
adhere to precedents and not to unsettle things which are established. This is embodied in Article 8 of the
Civil Code of the Philippines which provides, thus:
ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal
system of the Philippines.
The doctrine enjoins adherence to judicial precedents and requires courts in a country to follow the rule
established in a decision of the Supreme Court thereof. That decision becomes a judicial precedent to be
followed in subsequent cases by all courts in the land. The doctrine is based on the principle that once a
question of law bas been examined and decided, it should be deemed settled and closed to further argument.
The same is grounded on the necessity for securing certainty and stability of judicial decisions, thus, time
and again, the court has held that it is a very desirable and necessary judicial practice that when a court bas
laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply
it to all future cases in which the facts are substantially the same. It simply means that for the sake of
certainty, a conclusion reached in one case should be applied to those that follow if the facts are
substantially the same, even though the parties may be different. It proceeds from the first principle of
justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus,
where the same questions relating to the same event have been put forward by the parties similarly situated
as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any
attempt to relitigate the same issue. The doctrine has assumed such value in our judicial system that the
Court has ruled that " [a]bandonment thereof must be based only on strong and compelling reasons,
otherwise, the becoming virtue of predictability which is expected from this Court would be immeasurably
affected and the public's confidence in the stability of the solemn pronouncements diminished." Verily, only
upon showing that circumstances attendant in a particular case override the great benefits derived by our
judicial system from the doctrine of stare decisis, can the courts be justified in setting aside the same.41
Here, the facts are exactly the same as in Chavez, where this Court has already settled the issue of
interpretation of Section 8(1), Article VIII of the 1987 Constitution. Truly, such ruling may not be
unanimous, but it is undoubtedly a reflection of the wisdom of the majority of members of this Court on that
matter. Chavez cannot simply be regarded as an erroneous application of the questioned constitutional
provision for it merely applies the clear mandate of the law, that is, Congress is entitled to only one
representative in the JBC in the same way that its co-equal branches are.
As this Court declared in Chavez, Section 8(1), Article VIII of the 1987 Constitution is clear, categorical and
unambiguous. Thus, it needs no further construction or interpretation. Time and time again, it has been
repeatedly declared by this Court that where the law speaks in clear and categorical language, there is no
room for interpretation, only application.42 The wordings of Section 8(1), Article VIII of the 1987
Constitution are to be considered as indicative of the final intent of its Framers, that is, for Congress as a
whole to only have one representative to sit in the JBC. This Court, therefore, cannot simply make an
assumption that the Framers merely by oversight failed to take into account the bicameral nature of
Congress in drafting the same. As further laid down in Chavez, the Framers were not keen on adjusting the
provision on congressional representation in the JBC as it was not in the exercise of its primary function,
which is to legislate. Notably, the JBC was created to support the executive power to appoint, and Congress,
as one whole body, was merely assigned a contributory non-legislative function. No parallelism can be
197
drawn between the representative of Congress in the JBC and the exercise by Congress of its legislative
powers under Article VI and constituent powers under Article XVII of the Constitution. Congress, in
relation to the executive and judicial branches of government, is constitutionally treated as another co-equal
branch in the matter of its JBC representation.43
This Court cannot succumb to the argument that Congress, being composed of two distinct and separate
chambers, cannot represent each other in the JBC. Again, as this Court explained in Chavez, such an
argument is misplaced because in the JBC, any member of Congress, whether from the Senate or the House
of Representatives, is constitutionally empowered to represent the entire Congress. It may be a constricted
constitutional authority, but it is not an absurdity. To broaden the scope of congressional representation in
the JBC is tantamount to the inclusion of a subject matter which was not included in the provision as
enacted. True to its constitutional mandate, the Court cannot craft and tailor constitutional provisions in
order to accommodate all situations no matter how ideal or reasonable the proposed solution may sound. To
the exercise of this intrusion, the Court declines. 44
While it is true that Section 8(1), Article VIII of the 1987 Constitution did not explicitly state that the JBC
shall be composed of seven members, however, the same is implied in the enumeration of who will be the
members thereof. And though it is unnecessary for the JBC composition to be an odd number as no tie-
breaker is needed in the preparation of a shortlist since judicial nominees are not decided by a "yes" or "no"
vote, still, JBC's membership cannot be increased from seven to eight for it will be a clear violation of the
aforesaid constitutional provision. To add another member in the JBC or to increase the representative of
Congress to the JBC, the remedy is not judicial but constitutional amendment.
In sum, this Court will not overthrow Chavez for it is in accord with the constitutional mandate of giving
Congress "a representative" in the JBC. In the same manner, the adoption of the rotational scheme will not
in any way deprive Congress of its full participation in the JBC for such an arrangement is also in line with
that constitutional mandate.
WHEREFORE, premises considered, the instant Petition for Certiorari and Mandamus is
hereby DISMISSED for lack of merit.
SO ORDERED.
DISSENTING OPINION
LEONEN, J.:
This Court is once again tasked to re-examine our interpretation of Article VIII, Section 8(1) of the
Constitution, previously the subject of this Court's review in Chavez v. Judicial and Bar Council.1 In the
aftermath of Chavez, we see the absurd and unworkable effects of having only one (1) representative of
Congress within the Judicial and Bar Council.
Chavez v. Judicial and Bar Counciz2sanctioned what was clearly unintended by the Constitution: the
periodic disempowerment of one (1) legislative chamber. In doing so, it weakens Congress itself as a
bicameral constitutional department. The subtraction of the critical one (1) vote that determines who gets
into the shortlist is achieved by periodically disempowering one (1) chamber. From the time Chavez was
promulgated, significant facts have come to light that justifies the abandonment of that precedent.
We must do so in this case.
This is a Petition for mandamus and certiorari filed by Representative Reynaldo V. Umali (Representative
Umali), current Chair of the House of Representatives Committee on Justice, questioning the six (6)-month
rotational representation arrangement of Congress adopted by the Judicial and Bar Council pursuant
to Chavez v. Judicial and Bar Council,3 which was decided with finality on April 16, 2013. Petitioner claims
that the current arrangement unfairly deprives both chambers of Congress of its full participation in the
Judicial and Bar Council.
An understanding of the process of appointment to the judiciary, especially in its historical context, is
important to situate this Court's proper interpretation of the current provisions of the Constitution.
Before the creation of the Judicial and Bar Council, the power to nominate and appoint members of the
judiciary was vested in the executive and legislative branches.
Title X, Article 80 of the Malolos Constitution provides:
TITLE X
The Judicial Power
Article 80. The Chief Justice of the Supreme Court and the Solicitor-General shall be chosen by the National
Assembly in concurrence with the President of the Republic and the Secretaries of the Government, and
shall be absolutely independent of the Legislative and Executive Powers.
The 1935 Constitution similarly states:
ARTICLE VIII
Judicial Department
Section 5. The Members of the Supreme Court and all judges of inferior courts shall be appointed by the
President with the consent of the Commission on Appointments.
The promulgation of the 1973 Constitution, however, vested the chief executive with both executive and
legislative powers. Vetting and appointing of members to the judiciary became the sole prerogative of the
President:
ARTICLE X
The Judiciary
Section 4. The Members of the Supreme Court and judges of inferior courts shall be appointed by the
President.
Hoping to unshackle the Republic from the abuses of power during Martial Law but at the same time
wanting to insulate the process of judicial appointments from partisan politics, the 1986 Constitutional
Commission, through Commissioner Roberto Concepcion, proposed the creation of an independent body
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that would vet potential appointees to the judiciary.4 This body would be represented by the different
stakeholders of the legal sectorand would have the mandate of preparing the list of potential judicial
appointees to be submitted to the President. The proposal became what is now the Judicial and Bar Council.
Article VIII, Section 8 of the Constitution now provides:
ARTICLE VIII
Judicial Department
....
Section 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court
composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of the
Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, a retired Member
of the Supreme Court, and a representative of the private sector.
(2) The regular members of the Council shall be appointed by the President for a term of four years with the
consent of the Commission on Appointments. Of the Members first appointed, the representative of the
Integrated Bar shall serve for four years, the professor of law for three years, the retired Justice for two
years, and the representative of the private sector for one year.
(3) The Clerk of the Supreme Court shall be the Secretary ex officio of the Council and shall keep a record
of its proceedings.
(4) The regular Members of the Council shall receive such emoluments as may be determined by the
Supreme Court. The Supreme Court shall provide in its annual budget the appropriations for the Council.
(5) The Council shall have the principal function of recommending appointees to the Judiciary. It may
exercise such other functions and duties as the Supreme Court may assign to it.
Based on their understanding of the provision stating that one (1) of its ex officio members would
be "a representative of Congress," both the House of Representatives and Senate sent representatives to the
Council. Representative Rogaciano A. Mercado sat as ex officio member from December 10, 1987 to
February 23, 1989 while Senator Wigberto E. Tañada sat as ex officio member from March 2, 1988 to May
21, 1990.5 In a previous case, however, this Court stated that membership in the Council would be altered
only in 1994, stating that before then, the House of Representatives and the Senate would alternate its
representation:
[F]rom the moment of the creation of the JBC, [Congress] designated one representative to sit in the JBC to
act as one of the ex officio members. Perhaps in order to give equal opportunity to both houses to sit in the
exclusive body, the House of Representatives and the Senate would send alternate representatives to the
JBC. In other words, Congress had only one (1) representative.
In 1994, the composition of the JBC was substantially altered. Instead of having only seven (7) members, an
eighth (8th) member was added to the JBC as two (2) representatives from Congress began sitting in the
JBC--one from the House of Representatives and one from the Senate, with each having one-half (1/2) of a
vote. Then, curiously, the JBC En Banc, in separate meetings held in 2000 and 2001, decided to allow the
representatives from the Senate and the House of Representatives one full vote each.6
The practice of giving each member of Congress one (1) full vote was questioned in 2012 in Chavez v.
Judicial and Bar Council.7
This Court, voting 7-2,8 stated that the Constitution intended for the Judicial and Bar Council to only have
seven (7) members; thus, only one (1) representative from Congress must sit as an ex officio member. The
dispositive portion of the Decision reads:
WHEREFORE, the petition is GRANTED. The current numerical composition of the Judicial and Bar
Council is declared UNCONSTITUTIONAL. The Judicial and Bar Council is hereby enjoined to
reconstitute itself so that only one (1) member of Congress will sit as a representative in its proceedings, in
accordance with Section 8 (1), Article VIII of the 1987 Constitution.
This disposition is immediately executory.
SO ORDERED.
Upon Motion for Reconsideration, this Court, voting 10-3,9 reiterated that "[i]n the [Judicial and Bar
Council], any member of Congress, whether from the Senate or the House of Representatives, is
constitutionally empowered to represent the entire Congress."10
The Minutes of the July 29, 2013 Judicial and Bar Council En Banc meeting reflect their actions after the
case was promulgated. Representative Niel C. Tupas, Jr. (Representative Tupas) informed the Council that
pursuant to Chavez, the House of Representatives and Senate agreed that their representation would be on a
six (6)-month rotational basis, with Senator Aquilino "Koko" Pimentel III (Senator Pimentel) representing
Congress from July 1 to December 31, 2013.11 The Minutes state:
[Congressman Tupas] said that in view of the decision of the Supreme Court in April this year, the Speaker
of the House of Representatives and the Senate President authorized him and Senator Pimentel, Chairperson
of the Committee on Justice of the Senate to discuss the matter of representation to the JBC. They decided
that the representation would be on a rotation basis. For the first six (6) months, Senator Pimentel would be
the one to represent both Houses of Congress; and for the next six (6) months, it would be he. In the absence
of Senator Pimentel, Congressman Tupas will automatically attend the meetings, and vice versa. He
cautioned that since it is quite difficult for both Houses to come up with an agreement, it would not be good
to assume that whenever the Senate President or the Speaker of the House writes the JBC, it is the decision
of Congress. It should be a communication from both Houses. He then requested that he be furnished with
copies of all notices from the JBC even during the term of Senator Pimentel.
Chief Justice Sereno clarified that she received the Letter of Senate President Drilon stating, among other
things, that the Speaker of the House and the Senate President agreed that Senator Pimentel would be the
one to represent Congress until December 31, 2013, but that in his absence it would be Congressman Tupas.
She assured both Congressman Tupas and Senator Pimentel that they will both receive copies of all notices
and information that are being circulated among the JBC Members. She thanked Congressman Tupas for
199
personally informing the Council of the agreement between the two Houses of Congress, thus giving a
higher level of comfort than it had already given.
Congressman Tupas mentioned that he was not aware that the Senate President sent a letter. His assumption
is that the information would come from both Houses, not just from the Senate. He thus came to the meeting
to personally inform the JBC of the agreement. He thanked the Chief Justice and asked for permission to
leave.
Senator Pimentel likewise requested that he also be furnished with copies of all documents during the
rotation of Congressman Tupas. He then requested for a three-minute break, as he had some matters to
discuss with the Congressman before leaving.12
There was no showing of the presence of any resolution from any of the legislative chambers that authorized
or ratified the practice.
From then on, it became the practice of the House of Representatives to represent Congress in the Judicial
and Bar Council from January to June and for the Senate to represent Congress from July to December.13
The present controversy arose from the En Banc deliberations of the Judicial and Bar Council on December
2 and December 9, 2016, for the selection of nominees for the vacancies of retiring Supreme Court
Associate Justices Arturo D. Brion and Jose P. Perez. On both occasions, Representative Umali 14 cast his
votes. His votes, however, were not counted due to the present rotational representation arrangement. The
votes were instead placed in an envelope and sealed, "subject to any further disposition as the Supreme
Court may direct in a proper proceeding."15
Representative Umali filed this present Petition16 praying that:
a. The JBC's denial of petitioner Umali's vote as ex-officio member during the En Banc sessions on
December 2 and 9, 2016, be reversed and set aside;
b. The JBC be directed to count the votes of petitioner Umali as ex-officio member during the en bane
sessions on December 2 and 9, 2016;
c. The current six-month rotational representation of Congress by the Senate and the House of
Representatives in the JBC be declared unconstitutional; and
d. The JBC be directed to revert back to its prior representational arrangement where two representatives
from Congress are recognized and allowed to vote, or the status quo ante, prior to the Chavez ruling, and in
accordance with such specific guidelines that the Supreme Court will promulgate to ensure full and proper
representation and voting by both members from the Senate and the House of Representatives, and
thereafter to recognize, accept and count the votes cast by the petitioner Umali in all proceedings of the
JBC.17
The Judicial and Bar Council was directed to file its comment to the Petition.1âwphi1 On February 6, 2017,
the Office of the Solicitor General submitted a Manifestation (in lieu of Comment)18 entering its appearance
for "[t]he Congress of the Republic of the Philippines, represented by the Senate and the House of
Representatives"19 and "[acting] as the People's Tribune."20
On February 10, 2017, the Judicial and Bar Council Executive Chair 21 and its regular members22 filed its
Comment23on behalf of the Council.
Petitioner argues that Chavez v. Judicial and Bar Councit24did not define the manner by which the Judicial
and Bar Council should be reconstituted and that no formal resolution was issued by the Council to resolve
the issue. The Council instead adopted Representative Tupas' manifestation that the Senate and House of
Representatives agreed on a six (6)-month rotational representation.25
Petitioner points out that Representative Tupas had cautioned the Council that decisions of Congress should
be a communication of both houses. He argues that neither Representative Tupas' manifestation nor then
Senate President Franklin Drilon's (then Senate President Drilon) letter conferring Senator Pimentel 's
representation constitute a plenary act of both Houses of Congress so the present rotational representation
cannot be adopted by the Council.26
Petitioner asserts that allowing only one (1) representative of Congress on the Council is "impractical,
absurd and unconstitutional".27 He explains that the bicameral nature of Congress results in both houses
having different powers, functions, and decision-making processes. Thus, any communication, action, or
resolution from either house should not be interpreted as binding on the whole Congress. He points out that
other than this Court's interpretation of Article VIII, Section 8(1), 28 there is also no provision in the
Constitution that expressly mandates a single representation of Congress to any political or adjudicating
body.29 The genuine and full representation of Congress expresses the voice of the electorate to the Judicial
and Bar Council.30
Petitioner contends that the distinction between both houses is recognized under the Constitution. He claims
that denying the House of Representatives' continuous representation in the Council would be denying it of
its duty to screen and vote for the candidates for the eight (8) Associate Justices of the Supreme Court who
will compulsorily retire from 2017 to 2019.31 The Senate would also be deprived of its duty to screen and
vote for the two (2) vacant positions in the Supreme Court in 2022. 32 He cites as basis the vote for the
vacancies left by Associate Justices Perez and Brion that was scheduled in December, which deprived
petitioner of his chance to vote.33
Petitioner asserts that the bicameral nature of Congress requires both houses to observe inter-parliamentary
courtesies and were meant to represent different constituencies. Because of the shift from National
Assembly to a bicameral Congress, Article VIII, Section 8(1) of the Constitution should be interpreted to
allow representatives from both chambers to fully participate and vote in the Judicial and Bar Council. 34 He
maintains that Article VIII, Section 8(1) was not plain and was unambiguous because from 2001 until the
promulgation of Chavez, the Judicial and Bar Council allowed both the House of Representatives and the
Senate to be given one (1) full vote each.35 He insists that a verba legis interpretation of Article III, Section
8(1) would deny Congress of its representation since neither chamber on its own can represent the entirety
of Congress.36
Petitioner claims that allowing both the House of Representatives and the Senate to represent Congress in
the Council upholds the co-equal representation of the three (3) branches of the government. He explains
that under the present composition, there are actually three (3) representatives from the judicial branch (the
200
Chief Justice, a retired Justice of the Supreme Court, and a member of the Integrated Bar of the Philippines)
and three (3) representatives of the executive branch (Secretary of Justice, the professor of law, and the
representative of the private sector who are all presidential appointees).37 Thus, he claims that continuing the
present practice results in the legislative department having a disproportionate representation in the
constitutional body and diminishes the integrity of the House of Representatives, which represents the
people.38
For these reasons, petitioner argues that the Judicial and Bar Council committed grave abuse of discretion
that could be remedied through a writ of certiorari.39 He adds that a writ of mandamus would also be proper
to compel the Judicial and Bar Council to accept and recognize the votes he cast in the December 2 and 9,
2016 En Banc sessions.40
Unlike in Chavez v. Judicial and Bar Council,41both the House of Representatives and the Senate were able
to comment on the petition, through a Manifestation42 and Consolidated Manifestation43 by the Office of the
Solicitor General.
The Office of the Solicitor General, for Congress, argues that Chavez should be revisited due to its
"unexecutability ... arising from constitutional constraints."44 It explains that the current practice "was
arrived at in view of time constraints and difficulty in securing the agreement of both Houses."45 It likewise
points out that since the Constitution did not identify who should represent Congress in the Judicial and Bar
Council, the provision must be harmonized to take into account the current bicameral system. 46
The Office of the Solicitor General contends that the current rotational arrangement sets aside the inherent
dichotomy between the two (2) Houses of Congress and violates the essence of bicameralism. 47 It explains
that when the representatives of the Senate or the House of Representatives vote for a certain judicial
nominee, they carry the interests and views of the group they represent. If there is only one (1) member of
Congress in the Council, this vote would not be representative of the interests represented by Congress as a
whole.48
The Office of the Solicitor General maintains that no member of Congress can represent all of Congress,
which is why Congress has always sent two (2) representatives to the Council. 49 It points out that the phrase
"a representative of Congress" in Article VIII, Section 8(1) is qualified by the phrase "ex-
officio members" signifying that the member in an ex-officio capacity must be qualified to represent the
entirety of Congress.50
The Office of the Solicitor General asserts that the intent of the Judicial and Bar Council's composition is for
the representation to be collegial and to eliminate partisan politics in the selection of members of the
judiciary; thus, "the focus is more on proper representation rather than quantitative limitation." 51 It asserts
that when the framers deliberated on Article VIII, Section 8(1), they were still of the belief that legislature
would be unicameral.52 If they had intended for the Council to only have seven (7) members, it would have
specified the number, as it did in other provisions of the Constitution. 53 It contends that a deadlock in the
voting is not enough justification to undermine the bicameral nature of the legislature since voting in the
Council is not decided by a "yes" or "no" vote.54
The Office of the Solicitor General likewise holds that while the function of the Judicial and Bar Council
may be non-legislative, the involvement of both Houses of Congress is indispensable since each represents
different constituencies and would necessarily bring a unique perspective to the Council's recommendation
process.55 It cites statistics from June 2016 to present showing that a large number of appointments were
made to the lower courts at a time when the House of Representatives, which represents sectors or local
districts, was not able to participate in the voting process.56
The Office of the Solicitor General also cites Aguinaldo v. Judicial and Bar Council57to argue that in the
review of the Judicial and Bar Council's rules, it should also include a review of the rule on Congress'
representation on the Council.58
Respondent Judicial and Bar Council, on the other hand, attests that the Petition should be dismissed since
the rotational scheme adopted by Congress is not the proper subject of a petition for certiorari or
mandamus. It contends that the controversy does not involve the Council's exercise of judicial, quasi-
judicial, or ministerial functions.59 It maintains that there was also no grave abuse of discretion when it
refused to count petitioner's votes since this act was authorized by the Constitution and Chavez v. Judicial
and Bar Council.60It argues that the Council's performance of its duties is discretionary; thus, mandamus
cannot be issued to control the performance of a discretionary act. 61
Respondent counters that the Petition is not the plain, speedy, and adequate remedy since petitioner did not
show that he exerted all efforts to have his concern addressed by Congress. It points out that it was
Congress, not the Council, which adopted the rotational scheme. 62 Chavez declared that the representation of
Congress in the Council would be for Congress to determine; thus, petitioner should have first asked
Congress to repudiate the rotational scheme agreement.63 Respondent insists that the practice and
acquiescence of Congress to this arrangement operates as an estoppel against any member of Congress to
deny the validity of this agreement.64 It also points out that petitioner has no locus standi to file this Petition
in his capacity as Chair of the House of Representatives Committee on Justice absent any resolution by the
Senate and the House of Representatives authorizing him to do so. 65
Respondent likewise prays for the dismissal of the Petition on the ground that petitioner's allegations are
mere rehashes of the arguments and dissents in Chavez and are, thus, barred by the doctrine of stare
decisis.66It insists that any issue on the interpretation of Article VIII, Section 8(1) has already been settled
in Chavez.67
Respondent reiterates the ruling in Chavez and argues that the framers of the Constitution intended for the
Council to only have seven (7) members to provide a solution when there is a stalemate in the voting. 68 It
insists that Chavez has also settled the alleged "oversight and technical omission" argued by petitioner when
it stated that the membership of Congress to the Council was not in the interest of a certain constituency but
in reverence to it as the third branch of the government.69
Respondent argues that the grant of the Petition would create an imbalance since Article VIII treats each ex
officio member as representing one (1) co-equal branch of the govemment.70 It maintains that even assuming
that there is an imbalance, it is not for this Court or the Council to remedy the imbalance since the remedy
lies in the amendment of the constitutional provision.71
The case presents several procedural and substantive issues. Procedurally, this Court is asked to
determine first, whether petitioner has the locus standi to file the Petition in the absence of a resolution of
both Houses of Congress authorizing him for that purpose; second, whether the Petition is the plain, speedy,
and adequate remedy for addressing the issue of the rotational representation arrangement;
201
and third, whether the doctrine of stare decisis operates as a bar for petitioner to question the ruling
in Chavez v. Judicial and Bar Council.
On the substantive issues, this Court is likewise asked to determine, first, whether the current six (6)-month
rotational representation arrangement deprives Congress of its full participation in the deliberations in the
Judicial and Bar Council; second, whether the Judicial and Bar Council committed grave abuse of discretion
in adopting a six (6)-month rotational representation arrangement absent a plenary action by both Houses of
Congress; and finally, whether the Judicial and Bar Council can be compelled, by writ of mandamus, to
count petitioner's votes in the En Banc sessions of December 2 and 9, 2016.
I
Every case brought to this Court must be filed by the party having the standing to file the case. The
definition of legal standing is settled:
Locus standi is defined as "a right of appearance in a court of justice on a given question." In private suits,
standing is governed by the "real-parties-in interest" rule as contained in Section 2, Rule 3 of the 1997 Rules
of Civil Procedure, as amended. It provides that "every action must be prosecuted or defended in the name
of the real party in interest." Accordingly, the "real-party-in interest" is "the party who stands to be benefited
or injured by the judgment in the suit or the party entitled to the avails of the suit." Succinctly put, the
plaintiff's standing is based on his own right to the relief sought.72
Respondent contends that petitioner has no standing to file this case absent a resolution from the House of
Representatives authorizing him to do so.73 It anchors its argument on Philippine Constitutional Association
v. Enriquez,74where this Court stated:
While the petition in G.R. No. 113174 was filed by 16 Senators, including the Senate President and the
Chairman of the Committee on Finance, the suit was not authorized by the Senate itself. Likewise, the
petitions in G.R. Nos. 113766 and 113888 were filed without an enabling resolution for the purpose. 75
Respondent, however, failed to read the entirety of the quoted portion. In Philippine Constitutional
Association, the procedural issue on standing was whether Senators could question a presidential veto on an
appropriations bill despite the absence of a Senate resolution authorizing them to file the case. This Court, in
addressing the issue, first acknowledged that previous decisions have required Senators to first submit a
Senate resolution authorizing the filing of the case. Nevertheless, this Court ruled that members of Congress
have standing to question any action that impairs the Congress' powers and privileges, regardless of whether
there was a prior Congressional resolution:
The legal standing of the Senate, as an institution, was recognized in Gonzales v. Macaraig, Jr . ... In said
case, 23 Senators, comprising the entire membership of the Upper House of Congress, filed a petition to
nullify the presidential veto of Section 55 of the GAA of 1989. The filing of the suit was authorized by
Senate Resolution No. 381, adopted on February 2, 1989, and which reads as follows:
Authorizing and Directing the Committee on Finance to Bring in the Name of the Senate of the Philippines
the Proper Suit with the Supreme Court of the Philippines contesting the Constitutionality of the Veto by the
President of Special and General Provisions, particularly Section 55, of the General Appropriation Bill of
1989 (H.B. No. 19186) and For Other Purposes.
In the United States, the legal standing of a House of Congress to sue has been recognized ...
While the petition in G.R. No. 113174 was filed by 16 Senators, including the Senate President and the
Chairman of the Committee on Finance, the suit was not authorized by the Senate itself. Likewise, the
petitions in G.R. Nos. 113766 and 113888 were filed without an enabling resolution for the purpose.
....
We rule that a member of the Senate, and of the House of Representatives for that matter, has the legal
standing to question the validity of a presidential veto or a condition imposed on an item in an appropriation
bill.
Where the veto is claimed to have been made without or in excess of the authority vested on the President
by the Constitution, the issue of an impermissible intrusion of the Executive into the domain of the
Legislature arises ...
To the extent the powers of Congress are impaired, so is the power of each member thereof, since his office
confers a right to participate in the exercise of the powers of that institution ...
An act of the Executive which injures the institution of Congress causes a derivative but nonetheless
substantial injury, which can be questioned by a member of Congress ... In such a case, any member of
Congress can have a resort to the courts.
Former Chief Justice Enrique M. Fernando, as Amicus Curiae, noted[:]
This is, then, the clearest case of the Senate as a whole or individual Senators as such having substantial
interest in the question at issue. It could likewise be said that there was requisite injury to their rights as
Senators. It would then be futile to raise any locus standi issue. Any intrusion into the domain appertaining
to the Senate is to be resisted. Similarly, if the situation were reversed, and it is the Executive Branch that
could allege a transgression, its officials could likewise file the corresponding action. What cannot be denied
is that a Senator has standing to maintain inviolate the prerogatives, powers and privileges vested by the
Constitution in his office.76 (Emphasis supplied; Citations omitted.)
Every member of Congress has standing to question acts which affect the powers, prerogatives, and
privileges of Congress. In Pimentel v. Executive secretary:77
As regards Senator Pimentel, it has been held that "to the extent the powers of Congress are impaired, so is
the power of each member thereof, since his office confers a right to participate in the exercise of the powers
of that institution." Thus, legislators have the standing to maintain inviolate the prerogatives, powers and
privileges vested by the Constitution in their office and are allowed to sue to question the validity of any
official action which they claim infringes their prerogatives as legislators. The petition at bar invokes the
power of the Senate to grant or withhold its concurrence to a treaty entered into by the executive branch, in
this case, the Rome Statute. The petition seeks to order the executive branch to transmit the copy of the
202
treaty to the Senate to allow it to exercise such authority. Senator Pimentel, as member of the institution,
certainly has the legal standing to assert such authority of the Senate. 78(Emphasis supplied, citations
omitted)
Here, petitioner, as a member of Congress and the Chair of the House Committee on Justice, alleges that the
rotational representation arrangement adopted by respondent Judicial and Bar Council impairs the
prerogative of Congress to have full representation within the Council. Petitioner need not have the required
House resolution to file his Petition.
In any case, parties are vested by this Court with legal standing when constitutional challenges have become
justiciable, consistent with this Court's role in the constitutional order. While the parties must first establish
their right to appear before us on a given question of law, they must, more importantly, present concrete
cases and controversies. In this instance, the continuing problematic application of Chavez vests petitioner,
as the current representative of the House to the Judicial and Bar Council, with sufficient standing to raise
this issue before us.
The Office of the Solicitor General, however, may have been confused when it filed its Manifestation (in
Lieu of Comment). It stated before this Court that the Manifestation is filed by "[t]he Congress of the
Republic of the Philippines, represented by the Senate and the House of Representatives, through the Office
of the Solicitor General (OSG) who in this case acts as the People's Tribune." 79
It is unclear whether the Office of the Solicitor General intends to represent Congress or to act as the
People's Tribune.
The Office of the Solicitor General's mandate is to "represent the Government of the Philippines, its
agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation or
matter requiring the services of a lawyer."80
Thus, as a general rule, the Office of the Solicitor General represents the Philippine government in all legal
proceedings. The rule has exceptions, such as when it takes an adverse position and acts as the "People's
Tribune." In Pimentel v. Commission on Elections:81
True, the Solicitor General is mandated to represent the Government, its agencies and instrumentalities and
its officials and agents in any litigation, proceeding, investigation or matter requiring the services of a
lawyer. However, the Solicitor General may, as it has in instances take a position adverse and contrary to
that of the Government on the reasoning that it is incumbent upon him to present to the court what he
considers would legally uphold the best interest of the government although it may run counter to a client's
position.
....
As we commented on the role of the Solicitor General in cases pending before this Court:
This Court does not expect the Solicitor General to waver in the performance of his duty. As a matter of
fact, the Court appreciates the participation of the Solicitor General in many proceedings and his continued
fealty to his assigned task. He should not therefore desist from appearing before this Court even in those
cases he finds his opinion inconsistent with the Government or any of its agents he is expected to represent.
The Court must be advised of his position just as well.82 (Emphasis supplied, citations omitted)
Gonzales v. Chavez83further explains:
Indeed, in the final analysis, it is the Filipino people as a collectivity that constitutes the Republic of the
Philippines. Thus, the distinguished client of the OSG is the people themselves of which the individual
lawyers in said office are a part.
....
Moreover, endowed with a broad perspective that spans the legal interests of virtually the entire government
officialdom, the OSG may be expected to transcend the parochial concerns of a particular client agency and
instead, promote and protect the public weal. Given such objectivity, it can discern, metaphorically
speaking, the panoply that is the forest and not just the individual trees. Not merely will it strive for a legal
victory circumscribed by the narrow interests of the client office or official, but as well, the vast concerns of
the sovereign which it is committed to serve.84
The Office of the Solicitor General is not prohibited from taking a position adverse from that of the Judicial
and Bar Council. Its representation would be on behalf of the Filipino people, instead of a particular
government instrumentality.
Its representation in this case, however, is contradictory. It intends to represent Congress, a government
instrumentality, and act as the People's Tribune; that is, it will be taking a position contrary to that of a
government instrumentality. Obviously, the Office of the Solicitor General cannot represent both at the same
time.
Nevertheless, considering that the Office of the Solicitor General manifested that it would not be
representing the Judicial and Bar Council as mandated and will instead be taking an adverse position, this
Court will presume that it intends to act as the People's Tribune.
In future cases, however, the Office of the Solicitor General should be more cautious in entering its
appearance to this Court as the People's Tribune to prevent further confusion as to its standing.
II
Respondent claims that the Petition is not the plain, speedy, and adequate remedy for questioning the
rotational representation arrangement adopted by Congress.85
A petition for certiorari under Rule 65 of the Rules of Court primarily requires that there must be no appeal,
or any other plain, speedy, and adequate remedy available before filing the petition:
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, or any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper
203
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.
The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject
thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of
non-forum shopping as provided in the third paragraph of section 3, Rule 46. (Emphasis supplied)
Citing the rule on exhaustion of administrative remedies, respondentcontends that the Petition is not the
plain, speedy, and adequate remedy since petitioner should have first asked Congress to repudiate the
rotational representation agreement.86
This rule, however, applies to administrative agencies, not to Congress. Respondent fails to cite any
provision of law or Congressional rule that requires petitioner to have his concern addressed by Congress
before filing a petition with this Court.
There is also a time element to be considered that would allow the direct resort to this
Court.1âwphi1 In Diocese of Bacolod v. Commission on Elections,87 we stated that "a direct resort to this
court is allowed when there are genuine issues of constitutionality that must be addressed at the most
immediate time."88 We further recognized that "[e]xigency in certain situations would qualify as an
exception for direct resort to this [C]ourt."89
Under the Constitution, the President only has 90 days from the vacancy to appoint members of the Supreme
Court. Thus, the Judicial and Bar Council must be able to submit its list of nominees before the running of
the period.
Article VIII
Judicial Department
....
Section 4. (1) The Supreme Court shall be composed of a Chief Justice and fourteen Associate Justices. It
may sit en bane or in its discretion, in divisions of three, five, or seven Members. Any vacancy shall be
filled within ninety days from the occurrence thereof.
This 90-day period is mandatory. Failure to comply is considered a culpable violation of the Constitution.
In De Castro v. Judicial and Bar Council:90
[T]he usage in Section 4 (1), Article VIII of the word shall-an imperative, operating to impose a duty that
may be enforced-should not be disregarded. Thereby, Sections 4 (1) imposes on the President the imperative
duty to make an appointment of a Member of the Supreme Court within 90 days from the occurrence of the
vacancy. The failure by the President to do so will be a clear disobedience to the Constitution. 91 (Emphasis
in the original, citation omitted)
Admittedly, petitioner's prayer to have his vote counted in the December 2 and 9, 2016 En Banc Meetings
has already become moot with the appointments of Associate Justice Samuel R. Martires and Associate
Justice Noel G. Tijam.92 Nevertheless:
Th[is] Court will decide cases, otherwise moot, if: first, there is a grave violation of the
Constitution; second, the exceptional character of the situation and the paramount public interest is
involved; third, when the constitutional issue raised requires formulation of controlling principles to guide
the bench, the bar, and the public; and fourth, the case is capable of repetition yet evading review.93 (Citation
omitted)
An erroneous interpretation of a constitutional provision would be considered a grave violation of the
Constitution. Judicial appointments are likewise of paramount public interest. This case will also settle, once
and for all, the issue on the interpretation of Article VIII, Section 8(1).
This issue will once again arise considering that two (2) more justices are set to retire this year.94 There is,
thus, a limited amount of time for petitioner to question the lists of nominees submitted by respondent to the
Office of the President. A direct resort to this Court would be warranted under the circumstances.
III
Respondent argues that this Petition is barred by the doctrine of stare decisis95considering that the
interpretation of Article VIII, Section 8(1) has already been settled in Chavez v. Judicial and Bar Council.96
The principle of stare decisis is derived from the Latin maxim "stare decisis, et non quieta movere"; that is,
"it is best to adhere to decisions and not to disturb questions put at rest." 97 Its function is to ensure certainty
and stability in the legal system. 98 Ruling by precedent is meant to assure the public of the court's
objectivity.99 Stare decisis provides the public with a reasonable expectation that courts will rule in a certain
manner given a similar set of facts.
Courts, however, are cautioned against "blind adherence to precedents." 100 Decisions of this Court
previously found to have been valid may become impractical, contrary to law, or even unconstitutional. It
then becomes the duty of this Court to abandon that decision:
The principle of stare decisis does not mean blind adherence to precedents. The doctrine or rule laid down,
which has been followed for years, no matter how sound it may be, if found to be contrary to law, must be
abandoned. The principle of stare decisis does not and should not apply when there is conflict between the
precedent and the law. The duty of this Court is to forsake and abandon any doctrine or rule found to be in
violation of the law in force.101
102
Similarly, in De Castro v. Judicial and Bar Council:
The Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the
Court, especially with a new membership, is not obliged to follow blindly a particular decision that it
determines, after re-examination, to call for a rectification. The adherence to precedents is strict and rigid in
a common-law setting like the United Kingdom, where judges make law as binding as an Act of Parliament.
But ours is not a common-law system; hence, judicial precedents are not always strictly and rigidly
204
followed. A judicial pronouncement in an earlier decision may be followed as a precedent in a subsequent
case only when its reasoning and justification are relevant, and the court in the latter case accepts such
reasoning and justification to be applicable to the case. The application of the precedent is for the sake of
convenience and stability.103 (Citations omitted)
Whenever this Court renders its decisions, the intended effects of those decisions to future cases are taken
into consideration. The changing membership of the bench likewise contributes to the evolution of this
Court's stand on certain issues and cases. Ruling by precedent, thus, requires more than a mechanical
application:
[T]he use of precedents is never mechanical.
Some assumptions normally creep into the facts established for past cases. These assumptions may later on
prove to be inaccurate or to be accurate only for a given historical period. Sometimes, the effects assumed
by justices who decide past cases do not necessarily happen. Assumed effects are given primacy whenever
the spirit or intent of the law is considered in the interpretation of a legal provision. Some aspect of the facts
or the context of these facts would not have been fully considered. It is also possible that doctrines in other
aspects of the law related to a precedent may have also evolved.
In such cases, the use of precedents will unduly burden the parties or produce absurd or unworkable
outcomes. Precedents will not be useful to achieve the purposes for which the law would have been
passed.104 (Citations omitted)
There is also a need to abandon decisions "when this Court discerns, after full deliberation, that a continuing
error in the interpretation of the spirit and intent of a constitutional provision exists." 105 Assuring the public
of stability in the law and certainty of court actions is important. It is, however, more important for this
Court to be right. Thus, it becomes imperative for this Court to re-examine previous decisions to avoid
continuing its error:
The rule of stare decisis is entitled to respect. Stability in the law .. . is desirable. But idolatrous reverence
for precedent, simply as precedent, no longer rules. More important than anything else is that the court
should be right. And particularly is it not wise to subordinate legal reason to case law and by so doing
perpetuate error when it is brought to mind that the views now expressed conform in principle to the original
decision and that since the first decision to the contrary was sent forth there has existed a respectable
opinion of non-conformity in the court. Indeed, on at least one occasion has the court broken away from the
revamped doctrine, while even in the last case in point the court was as evenly divided as it was possible to
be and still reach a decision.106
Chavez v. Judicial and Bar Council was not a unanimous decision of this Court. Vigorous dissents
accompanied not only the main decision but also the resolution on the motion for reconsideration. This
Petition precisely assails Chavez's outcome and its effect on the diminished representation of Congress in
the vetting process of judicial nominees. Rather than dismiss this case on the basis of stare decisis, it would
be more prudent for this Court to revisit Chavez in order to settle the issue.
IV
The doctrine of Chavez v. Judicial and Bar Council107must be abandoned and revised.
Under the Constitution, Congress is bicameral in nature. It consists of two (2) chambers: the Senate and the
House of Representatives. Article VI, Section 1 provides:
ARTICLE VI
The Legislative Department
Section 1. The legislative power shall be vested in the Congress of the Philippines which shall consist of a
Senate and a House of Representatives, except to the extent reserved to the people by the provision on
initiative and referendum. (Emphasis supplied)
The Constitution considers both chambers as separate and distinct from each other. The manner of elections,
terms of office, and organization of each chamber is provided for under separate provisions of the
Constitution.
Senators are "elected at large by the qualified voters of the Philippines." 108 Members of the House of
Representatives are elected by their respective 1egis1ative districts109 or through the party-1ist
system.110 The differing nature of its elections affects the scope of its representation. Senators represent a
national constituency while the House of Representatives represents only a particular legislative district or
marginalized and underrepresented sector.
A Senator's term of office is for six (6) years111 while the term of office of a Member of the House of
Representatives is for three (3) years.112
Each chamber chooses its own officers.113 Each chamber promulgates its own rules of procedure.114 Each
chamber maintains separate Journals.115 Each chamber keeps separate Records of its proceedings. 116 Each
chamber disciplines its own members.117 Each chamber even maintains separate addresses.118 There is no
mechanism that would allow the two (2) chambers to represent the other:
There is no presiding officer for the Congress of the Philippines, but there is a Senate President and a
Speaker of the House of Representatives. There is no single journal for the Congress of the Philippines, but
there is a journal for the Senate and a journal for the House of Representatives. There is no record of
proceedings for the entire Congress of the Philippines, but there is a Record of proceedings for the Senate
and a Record of proceedings for the House of Representatives. The Congress of the Philippines does not
discipline its members. It is the Senate that promulgates its own rules and disciplines its members. Likewise,
it is the House that promulgates its own rules and disciplines its members.
No Senator reports to the Congress of the Philippines. Rather, he or she reports to the Senate. No Member of
the House of Representatives reports to the Congress of the Philippines. Rather, he or she reports to the
House of Representatives.
Congress, therefore, is the Senate and the House of Representatives. Congress does not exist separate from
the Senate and the House of Representatives.
205
Any Senator acting ex officio or as a representative of the Senate must get directions from the Senate. By
constitutional design, he or she cannot get instructions from the House of Representatives. If a Senator
represents the Congress rather than simply the Senate, then he or she must be open to amend or modify the
instructions given to him or her by the Senate if the House of Representatives' instructions are different. Yet,
the Constitution vests disciplinary power only on the Senate for any Senator.
The same argument applies to a Member of the House of Representatives.
No Senator may carry instructions from the House of Representatives. No Member of the House of
Representatives may carry instructions from the Senate. Neither Senator nor Member of the House of
Representatives may therefore represent Congress as a whole.119
Thus, there is no Member of Congress that can represent all of Congress. Congress is represented by both
the Senate and the House of Representatives. The Constitution itself provides for only one (1) instance when
both chambers must vote jointly:
ARTICLE VII
Executive Department
....
Section 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and
whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence,
invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period
not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any
part thereof under martial law. Within forty-eight hours from the proclamation of martial law or the
suspension of the privilege of the writ of habeas corpus, the President shall submit a report in person or in
writing to the Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in
regular or special session, may revoke such proclamation or suspension, which revocation shall not be set
aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend
such proclamation or suspension for a period to be determined by the Congress, if the invasion or rebellion
shall persist and public safety requires it. (Emphasis supplied)
In Chavez v. Judicial and Bar Council, 120 this Court, however, ruled that Congress is only entitled to one
(1) seat in the Judicial and Bar Council, pursuant to its interpretation of Article VIII, Section 8(1) of the
Constitution. Article VIII, Section 8(1) provides:
ARTICLE VIII
Judicial Department
....
Section 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court
composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of the
Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, a retired Member
of the Supreme Court, and a representative of the private sector. (Emphasis supplied)
A verba legis interpretation of Article VIII, Section 8(1) of the Constitution leads to an ambiguity and The chronology of events shows that the provision on the composition of the Judicial and Bar Council had
disregards the bicameral nature of Congress. Chavez presumes that one (1) member of Congress can vote on been passed at a time when the framers were still of the belief that there was to be a unicameral legislature.
behalf of the entire Congress. Thus, Section 8(1) provides for only "a representative" instead of "representatives."

It is a basic rule of statutory construction that constitutional provisions must be harmonized so that all words However, Section 8(1) must also be interpreted according to the understanding of the people who ratified it.
are operative. Thus, in Civil Liberties union v. Executive secretary:121
Historically, both the Senate and the House of Representatives sent their members to sit in the Judicial and
It is a well-established rule in constitutional construction that no one provision of the Constitution is to be Bar Council:131
separated from all the others, to be considered alone, but that all the provisions bearing upon a particular
subject are to be brought into view and to be so interpreted as to effectuate the great purposes of the Ex Officio Members Representing the Senate, Congress:
instrument. Sections bearing on a particular subject should be considered and interpreted together as to
effectuate the whole purpose of the Constitution and one section is not to be allowed to defeat another, if by WIGBERTO E. TANADA 2 March 1988 to 21 May 1990 30 September 1992 to 3
any reasonable construction, the two can be made to stand together. +RAULS. ROCO March 1993
ALBERTO G. ROMULO 14 April 1993 to 1 August 1995 2 August 1995 to 31
In other words, the court must harmonize them, if practicable, and must lean in favor of a construction +MARCELO B. FERNAN December 1996
which will render every word operative, rather than one which may make the words idle and
nugatory.122 (Emphasis provided, citations omitted) +RAULS. ROCO 1 January 1997 to 30 July 1998 31 July 1998 to 31
+RENATO L. CAYETANO January 2000 1 February 2000 to 29 November 2000
AQUILINO Q. PIMENTEL, JR.
Civil Liberties Union also instructs us that constitutional interpretation should depend on the understanding
of the people adopting it, rather than how the framers interpreted it: +MIRIAM D. SANTIAGO 10 January 2001to14 February 2001
+RENATO L. CAYETANO 16 May 2001 to 28 August 2001 29 August 2001 to
While it is permissible in this jurisdiction to consult the debates and proceedings of the constitutional
FRANCIS N.PANGILINAN August 2004 23 August 2004 to 30 June 2007 6 August
convention in order to arrive at the reason and purpose of the resulting Constitution, resort thereto may be
2007 to 23 November 2008
had only when other guides fail as said proceedings are powerless to vary the terms of the Constitution when
the meaning is clear. Debates in the constitutional convention "are of value as showing the views of the FRANCIS JOSEPH G. ESCUDERO 24 November 2008 to 30 June 2013
individual members, and as indicating the reasons for their votes, but they give us no light as to the views of
the large majority who did not talk, much less of the mass of our fellow citizens whose votes at the polls AQUILINO MARTIN DL. 23 July 2013 to 31 December 2013
gave that instrument the force of fundamental law. We think it safer to construe the constitution from what PIMENTEL III
appears upon its face." The proper interpretation therefore depends more on how it was understood by the
people adopting it than in the framer[s '} understanding thereof123(Emphasis provided, citations omitted) 1 July2014 to 31 December 2014
1 July 2015 to 31 December 2015
Resort to the records of the Constitutional Commission to discern the framers' intent must always be with
the understanding of its context and its contemporary consequences.124 Records show that Article VIII, LEILAM. DE LIMA 26 July 2016 to 19 September 2016
Section 8(1) was approved by the Constitutional Commission on July 19, 1986. 125 On July 21, 1986, the RICHARD J. GORDON 19 September 2016 to date
Commission voted to amend the proposal of a unicameral "National Assembly" to a bicameral
"Congress."126
Ex Officio Members Representing the House of Representatives, Congress:
The change of legislative structure led Commissioner Christian Monsod on July 30, 1986 to remark: +ROGACIANO M. MERCADO 10 December 1987 to 23 February 1989
ISIDRO C. ZARRAGA 31 July 1989 to 12 August 1992
Last week, we voted for a bicameral legislature. Perhaps it is symptomatic of what the thinking of this group
PABLO P. GARCIA 26 August 1992 to 8 March 1995
is, that all the provisions that were being drafted up to that time assumed a unicameral government. 127
ISIDRO C. ZARRAGA 28 June 1995 to 30 June 1998
ALFREDO E. ABUEG 31 July 1998 to 29 November 2000
On October 8, 1986, the Article on the Judiciary was reopened to introduce amendments to the proposed
Sections 3, 7, 10, 11, 13, and 14 only. 128 The entire Article on the Legislature, meanwhile, was approved on +HENRY P. LANOT 14 December 2000 to 30 June 2001
October 9, 1986.129 By October 15, 1986, the Constitution was presented to the President of the
ALLAN PETERS.CAYETANO 8 August 2001 to 3 March 2003
Constitutional Commission, Cecilia Muñoz Palma.130
MARCELINO C. LIBANAN 4 March 2003 to 8 August 2003

206
SIMEON A. DATUMANONG 9 August 2004 to 30 June 2007 Chief Justice Sereno clarified that she received the Letter of the Senate President Drilon stating, among
MATIAS V. DEFENSOR, JR. 8 August 2007 to 30 June 2010 other things, that the Speaker of the House and the Senate President agreed that Senator Pimentel would be
NIEL C. TUPAS, JR. 29 July 2010 to 30 June 2013 the one to represent Congress until December 31, 2013, but that in his absence it would be Congressman
1 January 2014 to 30 June 2014 Tupas. She assured both Congressman Tupas and Senator Pimentel that they will both receive copies of all
1 January 2015 to 30 June 2015 notices and information that are being circulated among the JBC Members. She thanked Congressman
Tupas for personally informing the Council of the agreement between the two Houses of Congress, thus
REYNALDO V. UMALI 3 August 2016 to date giving a higher level of comfort than it had already given.

From the promulgation of the Constitution, Congress already recognized that "a representative of Congress" Congressman Tupas mentioned that he was not aware that the Senate President sent a letter. His
can only mean one (1) representative from each chamber. This interpretation was so prevalent that from assumption is that the information would come from both Houses, not just from the Senate. He thus came to
2001, each member from the Senate and the House of Representatives was given one (1) full vote. 132 This is the meeting to personally inform the JBC of the agreement. He thanked the Chief Justice and asked for
the representation of Congress contemplated in the Constitution. permission to leave.

The current practice of alternate representation not only diminishes Congress' representation. It negates it. 133 Senator Pimentel likewise requested that he also be furnished with copies of all documents during the
rotation of Congressman Tupas. He then requested for a three-minute break, as he had some matters to
discuss with the Congressman before leaving.134 (Emphasis supplied)
When a Senator sits in the Council, he or she can only represent the Senate. Likewise, when a Member of
the House of Representatives sits in the Council, he or she can only represent the House of Representatives.
Congress is not represented at all in this kind of arrangement. There is no office or officer in Congress that can represent both chambers. Representative Tupas recognized
this difficulty and cautioned the Council that it should never presume that one (1) chamber can speak for the
entire Congress. He proved this point when he told the Council that he was unaware of any letter sent by the
The composition of the Judicial and Bar Council is representative of the constituencies and sectors affected Senate President.
by judicial appointments. Hence, practicing lawyers, prosecutors, the legal academe, members of the Bench,
and the private sector are represented in the Council.
Chavez forces one (1) chamber of Congress to arrogate upon itself all the powers, prerogatives, and
privileges of the entire Congress in the Judicial and Bar Council. This is contrary to its bicameral nature.
Members of Congress are the only officials within the Judicial and Bar Council that are elected. The rest of
the officials are appointed by the President. Thus, their membership within the Council is the only genuine
representation of the People. Their input in the possible candidates to the judiciary is as invaluable as that of When members of Congress sit in the Judicial and Bar Council, it may be with the instruction of their
a member of the legal academe or that of the private sector. respective chambers, as Representative Tupas demonstrated in the July 23, 2013 En Banc Meeting. Their
votes may likewise be constrained by resolutions and actions of the Congressional Committees they
represent. They do not just represent themselves. They are "representatives of Congress" "ex officio."135
The antecedents of this case only serve to highlight the absurd results wrought by Chavez. In 2013, then
Representative Tupas approached the Judicial and Bar Council to personally inform it of the agreed
representation between the Senate and the House of Representatives. When told by Chief Justice Sereno that Of the two (2) chambers in Congress, the House of Representatives represent constituencies on a more local
she had already received a letter from then Senate President Drilon informing the Council of the agreed scale. As pointed out by the Office of the Solicitor General, current voting patterns of the Council shows
representation, Representative Tupas replied that he was not aware of the letter: that a large number of appointees were for the lower courts:136
Court/Tribunal Number of Appointees
[Congressman Tupas] said that in view of the decision of the Supreme Court in April this year, the Speaker Supreme Court 1
of the House of Representatives and the Senate President authorized him and Senator Pimentel, Chairperson
of the Committee on Justice of the Senate to discuss the matter of representation to the JBC. They decided Court of Appeals 0
that representation would be on a rotation basis. For the first six (6) months, Senator Pimentel would be the
.one to represent both Houses of Congress; and for the next six (6) months, it would be [him]. In the absence Legal Education Board 1
of Senator Pimentel, Congressman Tupas will automatically attend the meetings, and vice versa. He Sandiganbayan 1
cautioned that since it is quite difficult for both Houses to come up with an agreement, it would not be good
to assume that whenever the Senate President or the Speaker of the House writes the JBC, it is the decision Court of Tax Appeals 1
of Congress. It should be a communication from both Houses. He then requested that he be furnished with
copies of all notices from the JBC even during the term of Senator Pimentel. Ombudsman 0
Lower Courts 38

207
Chavez deprives Congress its opportunity to fully represent its constituencies, whether at the national or at 2. BRUSELAS, Apolinario Jr. D. - 5 votes
the local level.
3. REYES, Jose, Jr. C. - 5 votes
The purported reasons for having only one (1) representative of Congress to the Council are illusory.
4. DIMAAMP AO, Japar B. - 4 votes
Chavez stated that Congress should be represented in the Council by only one (1) member "not because it
was in the interest of a certain constituency, but in reverence to it as a major branch of government."137 5. LAZARO-JAVIER, Amy C. - 4 votes

Within the Council, the Executive is represented by the Secretary of Justice, considered as the alter ego of 6. TIJAM, Noel G. - 4 votes
the President. The Judiciary is represented by the Chief Justice. Congress, however, operates through a
Senate and a House of Representatives. Two (2) separate and distinct chambers cannot be represented by a
7. VENTURA-JIMENO, Rita Linda S. - 4 votes
single individual.

Chavez also implied that the framers intended for the Council's membership to be seven (7), not eight (8). As demonstrated, no tie-breaker was needed in the preparation of the shortlist. Insisting that the composition
of the Council should be an odd number is unnecessary. The Council will still be able to discharge its
functions regardless of whether it is composed of seven (7) or eight (8) members.
Article VIII, Section 8(1), however, does not provide a numerical count for its membership unlike in other
the provisions of the Constitution.138 Increasing the Council's membership to eight (8) would not violate the
V
provisions of the Constitution.

Respondent Judicial and Bar Council, however, did not commit grave abuse of discretion when it adopted
Chavez also insisted that the Council should have an odd-number representation so that one (1) member
could function as a tie-breaker. the six (6)-month rotational representation arrangement.

Grave abuse of discretion is defined as:

Judicial nominees, however, are not decided by a "yes" or "no" vote. The Council submits to the President a
list of at least three (3) potential nominees who garnered a plurality of the votes. Some nominees may even
have the same number of votes, and the Council will still include all of those names in the shortlist. [S]uch capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction ... , or, in other
words, where the power is exercised in an arbitrary or despotic manner by reason of passion or personal
The shortlist dated December 2, 2016 for the vacancy of Associate Justice Perez contained the following hostility, and it 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 or to act at all in contemplation of law. 141 (Citations omitted)
names:139

Respondent Judicial and Bar Council was merely implementing a prior decision of this Court when it
1. REYES, Jose Jr. C. - 7 votes
refused to count petitioner's votes. A relevant portion of the Chavez's fallo states:
2. BRUSELAS, Apolinario Jr. D. - 5 votes
The Judicial and Bar Council is hereby enjoined to reconstitute itself so that only one (1) member of
Congress will sit as a representative in its proceedings, in accordance with Section 8 (1), Article VIII of the
3. DIMAAMPAO, Japar B. - 5 votes 1987 Constitution.142

4. MARTIRES, Samuel R. - 5 votes The method of reconstitution was left to the discretion of the Judicial and Bar Council, in recognition of its
status as an independent constitutional body. The Council, in turn, implemented Chavez by requiring that
5. REYES, Andres Jr. B. - 4 votes Congress provide it with only one (1) representative. In the July 23, 2013 En Banc Meeting, Representative
Tupas relayed the instructions of the House of Representatives. Then Senate President Drilon sent the
The shortlist dated December 9, 2016 for the vacancy of Associate Justice Brion contained the following instructions of the Senate through a letter to the Chief Justice. Both the Senate and the House of
names:140 Representatives did not offer any other type of representation that may have been agreed upon. The Council,
therefore, was merely complying with the directive in Chavez. In De Castro v. Judicial and Bar Council:143
1. CARANDANG, Rosmari D. - 6 votes

208
Judicial decisions assume the same authority as a statute itself and, until authoritatively abandoned,
necessarily become, to the extent that they are applicable, the criteria that must control the actuations, not
only of those called upon to abide by them, but also of those duty-bound to enforce obedience to them.144
These events, however, highlight the inevitable difficulty in implementing Chavez's interpretation of Article
VIII, Section 8(1). There is no one (1) office in Congress that could provide the Council with one (1)
representative. The Council has no authority to order Congress to jointly convene for the determination of its
sole representative. Thus, the Council would only be able to implement what is practicable, that is, whatever
arrangement the Congressional representatives may have agreed upon. Considering that the Congressional
representatives have not yet manifested to the Council that it was considering another type of arrangement,
the Council could not have been faulted for refusing to count petitioner's votes at a time when Senate was
representing Congress in the Council.
The Office of the Solicitor General likewise requests that this Court take up the matter of rotational
representation in the review of the Council's rules in Aguinaldo v. Judicial and Bar Council.145
In Aguinaldo, the new rules and practices of the Judicial and Bar Council were docketed as a separate
administrative matter to be discussed at a future time.146
This case, however, is a matter of constitutional interpretation. There is, thus, no need to direct the Judicial
and Bar Council to review its own rules to allow for the interpretation of this constitutional provision.
VI
The Judicial and Bar Council could have been compelled by a writ of mandamus to count petitioner's votes
in the En Banc sessions of December 2 and 9, 2016.
Mandamus is provided for under Rule 65, Section 3 of the Rules of Court:
Section 3. Petition for Mandamus.- When any tribunal, corporation, board, officer or person unlawfully
neglects the performance of an act which the law specifically enjoins as a duty resulting from an office,
trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which
such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law,
the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty
and praying that judgment be rendered commanding the respondent, immediately or at some other time to be
specified by the court, to do the act required to be done to protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the wrongful acts of the respondent.
Mandamus may issue to compel the performance of a ministerial duty. It cannot be issued to compel the
performance of a discretionary act. In Metro Manila Development Authority v. Concerned Residents of
Manila Bay:147
Generally, the writ of mandamus lies to require the execution of a ministerial duty. A ministerial duty is one
that "requires neither the exercise of official discretion nor judgment." It connotes an act in which nothing is
left to the discretion of the person executing it. It is a "simple, definite duty arising under conditions
admitted or proved to exist and imposed by law." Mandamus is available to compel action, when refused, on
209
matters involving discretion, but not to direct the exercise of judgment or discretion one way or the
other.148 (Citations omitted)
The difference between a discretionary act and a ministerial act is settled:
The distinction between a ministerial and discretionary act is well delineated. A purely ministerial act or
duty is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon
the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him
the right to decide how or when the duty shall be performed, such duty is discretionary and not ministerial.
The duty is ministerial only when the discharge of the same requires neither the exercise of official
discretion or judgment.149 (Citation omitted)
The determination of the qualifications and fitness of judicial applicants is discretionary on the part of the
Judicial and Bar Council.150 A writ of mandamus cannot be issued to compel the council to withdraw a list
originally submitted and to add other nominees that have not previously qualified.151
De Castro v. Judicial and Bar Council,152 however, states that a writ of mandamus may be issued to compel
the Council to comply with its constitutional mandate to submit a list of nominees to the President before the
90-day period to appoint:
The duty of the JBC to submit a list of nominees before the start of the President's mandatory 90-day period
to appoint is ministerial, but its selection of the candidates whose names will be in the list to be submitted to
the President lies within the discretion of the JBC. The object of the petitions for mandamus herein should
only refer to the duty to submit to the President the list of nominees for every vacancy in the Judiciary,
because in order to constitute unlawful neglect of duty, there must be an unjustified delay in performing that
duty. For mandamus to lie against the JBC, therefore, there should be an unexplained delay on its part in
recommending nominees to the Judiciary, that is, in submitting the list to the President. 153 (Citation omitted)
The Judicial and Bar Council has the ministerial duty to count the votes of all its members. Petitioner, as the
Chair of the House of Representatives Committee on Justice, should be considered a regular ex officio
member of the Council, and his votes in the December 2 and 9, 2016 En Banc Meetings should have been
counted. This relief, however, has already become moot in light of the recent appointments to this Court. In
future deliberations, however, the Judicial and Bar Council should have the ministerial duty to separately
count the votes of both Congressional representatives in the Council.
Accordingly, I vote to GRANT the Petition. The doctrine in Chavez v. Judicial and Bar Council154must
be ABANDONED and the Judicial and Bar Council must be DIRECTED to separately count the votes of
both Congressional representatives in the Council in its En Banc deliberations.
 EN BANC
G.R. No. 206987 September 10, 2013
ALLIANCE FOR NATIONALISM AND DEMOCRACY (ANAD), Petitioner,
vs.
COMMISSION ON ELECTIONS, Respondent.
DECISION
PEREZ, J.:
Before the Court is a Petition for Certiorari with Urgent Prayer for the Issuance of a Temporary Restraining
Order and Writ of Mandamus, seeking to compel the Commission on Elections (COMELEC) to canvass the
votes cast for petitioner Alliance for Nationalism and Democracy (ANAD) in the recently held 2013 Party-
List Elections.
On 7 November 2012, the COMELEC En Banc promulgated a Resolution canceling petitioner’s Certificate
of Registration and/or Accreditation on three grounds, to wit: 1
I.
Petitioner ANAD does not belong to, or come within the ambit of, the marginalized and
underrepresented sectors enumerated in Section 5 of R.A. No. 7941 and espoused in the cases of
Ang Bagong Bayani-OFW Labor Party v. Commission on Elections and Ang Ladlad LGBT Party
v. Commission on Elections.
II.
There is no proof showing that nominees Arthur J. Tariman and Julius D. Labandria are actually
nominated by ANAD itself. The Certificate of Nomination, subscribed and sworn to by Mr.
Domingo M.Balang, shows that ANAD submitted only the names of Pastor Montero Alcover, Jr.,
Baltaire Q. Balangauan and Atty. Pedro Leslie B. Salva. It necessarily follows, that having only
three (3) nominees, ANAD failed to comply with the procedural requirements set forth in Section
4, Rule 3 of Resolution No. 9366.
III.
ANAD failed to submit its Statement of Contributions and Expenditures for the 2007 National and Local
Elections as required by Section 14 of Republic Act No. 7166 ("R.A. No. 7166").
ANAD went before this Court challenging the above-mentioned resolution. In Atong Paglaum, Inc. v.
Comelec,2 the Court remanded the case to the COMELEC for re-evaluation in accordance with the
parameters prescribed in the aforesaid decision.
In the assailed Resolution dated 11 May 2013, 3 the COMELEC affirmed the cancellation of petitioner’s
Certificate of Registration and/or Accreditation and disqualified it from participating in the 2013 Elections.
The COMELEC held that while ANAD can be classified as a sectoral party lacking in well-defined political
constituencies, its disqualification still subsists for violation of election laws and regulations, particularly for
its failure to submit at least five nominees, and for its failure to submit its Statement of Contributions and
Expenditures for the 2007 Elections.
Hence, the present petition raising the issues of whether or not the COMELEC gravely abused its discretion
in promulgating the assailed Resolution without the benefit of a summary evidentiary hearing mandated by
the due process clause, and whether or not the COMELEC erred in finding that petitioner submitted only
three nominees and that it failed to submit its Statement of Contributions and Expenditures in the
2007Elections.4
We dismiss the petition.
The only question that may be raised in a petition for certiorari under Section 2, Rule 64 of the Rules of
Court is whether or not the COMELEC acted with grave abuse of discretion amounting to lack or excess of
jurisdiction. For a petition for certiorari to prosper, there must be a clear showing of caprice and arbitrariness
in the exercise of discretion.5
"Grave abuse of discretion," under Rule 65, has a specific meaning. It is the arbitrary or despotic exercise of
power due to passion, prejudice or personal hostility; or the whimsical, arbitrary, or capricious exercise of
210
power that amounts to an evasion or a refusal to perform a positive duty enjoined by law or to act at all in
contemplation of law. For an act to be struck down as having been done with grave abuse of discretion, the
abuse of discretion must be patent and gross.6
ANAD claims that the COMELEC gravely abused its discretion when it promulgated the assailed
Resolution without giving ANAD the benefit of a summary evidentiary hearing, thus violating its right to
due process. It is to be noted, however, that ANAD was already afforded a summary hearing on23 August
2013, during which Mr. Domingo M. Balang, ANAD’s president, authenticated documents and answered
questions from the members of the COMELEC pertinent to ANAD’s qualifications. 7
ANAD, nonetheless, insists that the COMELEC should have called for another summary hearing after this
Court remanded the case to the COMELEC for re-evaluation in accordance with the parameters laid down in
Atong Paglaum, Inc. v. Comelec . This is a superfluity.
ANAD was already given the opportunity to prove its qualifications during the summary hearing of 23
August 2012, during which ANAD submitted documents and other pieces of evidence to establish said
qualifications. In re-evaluating ANAD’s qualifications in accordance with the parameters laid down in
Atong Paglaum, Inc. v. COMELEC , the COMELEC need not have called another summary hearing. The
Comelec could, as in fact it did,8 readily resort to documents and other pieces of evidence previously
submitted by petitioners in re-appraising ANAD’s qualifications. After all, it can be presumed that the
qualifications, or lack thereof, which were established during the summary hearing of 23 August2012
continued until election day and even there after.
As to ANAD’s averment that the COMELEC erred in finding that it violated election laws and regulations,
we hold that the COMELEC, being a specialized agency tasked with the supervision of elections all over the
country, its factual findings, conclusions, rulings and decisions rendered on matters falling within its
competence shall not be interfered with by this Court in the absence of grave abuse of discretion or any
jurisdictional infirmity or error of law.9
As found by the COMELEC, ANAD, for unknown reasons, submitted only three nominees instead of five,
in violation of Sec. 8 of R.A. No. 7941( An Act Providing for the Election of Party-List Representatives
through the Party-List System, and Appropriating Funds Therefor). 10 Such factual finding of the COMELEC
was based on the Certificate of Nomination presented and marked by petitioner during the 22 and 23 August
2012summary hearings.11
Compliance with Section 8 of R.A. No. 7941 is essential as the said provision is a safeguard against
arbitrariness.1âwphi1Section 8 of R.A. No. 7941rids a party-list organization of the prerogative to substitute
and replace its nominees, or even to switch the order of the nominees, after submission of the list to the
COMELEC.
In Lokin, Jr. v. Comelec,12 the Court discussed the importance of Sec.8 of R.A. No. 7941 in this wise:
The prohibition is not arbitrary or capricious; neither is it without reason on the part of lawmakers. The
COMELEC can rightly presume from the submission of the list that the list reflects the true will of the party-
list organization. The COMELEC will not concern itself with whether or not the list contains the real
intended nominees of the party-list organization, but will only determine whether the nominees pass all the
requirements prescribed by the law and whether or not the nominees possess all the qualifications and none
of the disqualifications. Thereafter, the names of the nominees will be published in newspapers of general
circulation. Although the people vote for the party-list organization itself in a party-list system of election,
not for the individual nominees, they still have the right to know who the nominees of any particular party-
list organization are. The publication of the list of the party-list nominees in newspapers of general
circulation serves that right of the people, enabling the voters to make intelligent and informed choices. In
contrast, allowing the party-list organization to change its nominees through withdrawal of their
nominations, or to alter the order of the nominations after the submission of the list of nominees circumvents
the voters’ demand for transparency. The lawmakers’ exclusion of such arbitrary withdrawal has eliminated
the possibility of such circumvention.
Moreover, the COMELEC also noted ANAD’s failure to submit a proper Statement of Contributions and
Expenditures for the 2007 Elections, in violation of COMELEC Resolution No. 9476, viz:
Rule 8, Sec. 3. Form and contents of statements. – The statement required in next preceding section shall be
in writing, subscribed and sworn to by the candidate or by the treasurer of the party. It shall set forth in
detail the following:
a. The amount of contribution, the date of receipt, and the full name, profession, business, taxpayer
identification number (TIN) and exact home and business address of the person or entity from
whom the contribution was received; (See Schedule of Contributions Received, Annex "G")
b. The amount of every expenditure, the date thereof, the full name and exact address of the person
or entity to whom payment was made, and the purpose of the expenditure; (See Schedule of
Expenditures, Annex "H")
A Summary Report of Lawful Expenditure categorized according to the list specified above shall
be submitted by the candidate or party treasurer within thirty (30) days after the day of the election.
The prescribed form for this Summary Report is hereby attached to these Rules as Annex "H-1."
c. Any unpaid obligation, its nature and amount, the full name and exact home and business
address of the person or entity to whom said obligation is owing; and (See Schedule of Unpaid
Obligations, Annex "I")
d. If the candidate or treasurer of the party has received no contribution, made no expenditure, or
has no pending obligation, the statement shall reflect such fact;
e. And such other information that the Commission may require.
The prescribed form for the Statement of Election Contributions and Expenses is attached to these Rules as
Annex "F." The Schedules of Contributions and Expenditures (Annexes "G" and "H", respectively) should
be supported and accompanied by certified true copies of official receipts, invoices and other similar
documents.
An incomplete statement, or a statement that does not contain all the required information and attachments,
or does not conform to the prescribed form, shall be considered as not filed and shall subject the candidate
or party treasurer to the penalties prescribed by law.
As found by the COMELEC, ANAD failed to comply with the above-mentioned requirements as the
exhibits submitted by ANAD consisted mainly of a list of total contributions from other persons, a list of
official receipts and amounts without corresponding receipts, and a list of expenditures based on order slips
and donations without distinction as to whether the amounts listed were advanced subject to reimbursement
or donated.13 This factual finding was neither contested nor rebutted by ANAD.
We herein take the opportunity to reiterate the well-established principle that the rule that factual findings of
administrative bodies will not be disturbed by the courts of justice except when there is absolutely no
evidence or no substantial evidence in support of such findings should be applied with greater force when it
concerns the COMELEC, as the framers of the Constitution intended to place the COMELEC – created and
explicitly made independent by the Constitution itself – on a level higher than statutory administrative
organs. The COMELEC has broad powers to ascertain the true results of the election by means available to
it. For the attainment of that end, it is not strictly bound by the rules of evidence. 14
As empowered by law, the COMELEC may motu proprio cancel, after due notice and hearing, the
registration of any party-list organization if it violates or fails to comply with laws, rules or regulations
relating to elections.15 Thus, we find no grave abuse of discretion on the part of the COMELEC when it
issued the assailed Resolution dated 11 May 2013.
In any event, the official tally results of the COMELEC show that ANAD garnered 200,972 votes.16 As
such, even if petitioner is declared qualified and the votes cast for it are canvassed, statistics show that it will
still fail to qualify for a seat in the House of Representatives.
WHEREFORE, premises considered, the Court Resolves to DISMISS the Petition, finding no grave abuse
of discretion on the part of the Commission on Elections.
SO ORDERED.

211
 SECOND DIVISION
G.R. No. 192685 July 31, 2013
OSCAR R. AMPIL, Petitioner,
vs.
THE HON. OFFICE OF THE OMBUDSMAN, POLICARPIO L. ESPENESIN, Registrar, Register of
Deeds, Pasig City, FRANCIS SERRANO, YVONNE S. YUCHENGCO, and GEMA O.
CHENG, Respondents.
x-----------------------x
G.R. No. 199115
OSCAR R. AMPIL, Petitioner,
vs.
POLICARPIO L. ESPENESIN, Respondent.
DECISION
PEREZ, J.:
No less than the Constitution maps out the wide grant of investigatory powers to the Ombudsman. 1 Hand in
hand with this bestowal, the Ombudsman is mandated to investigate and prosecute, for and in behalf of the
people, criminal and administrative offenses committed by government officers and employees, as well as
private persons in conspiracy with the former.2 There can be no equivocation about this power-and-duty
function of the Ombudsman.
Before us are consolidated petitions separately filed by Oscar R. Ampil (Ampil): (1) one is for certiorari
under Rule 65 of the Rules of Court docketed as G.R. No. 192685; and (2) the other is for review on
certiorari under Rule 45 of the Rules of Court docketed as G.R. No. 199115.
Challenged in the petition for certiorari is the Resolution 3 of the Ombudsman in OMB-C-C-07-0444-J,
dismissing the criminal complaint filed by Ampil against respondents Policarpio L. Espenesin (Espenesin),
Francis Serrano (Serrano), Yvonne S. Yuchengco (Yuchengco) and Gema O. Cheng (Cheng), and the
Order4 denying Ampil’s motion for reconsideration thereof. Ampil’s complaint charged respondents with
Falsification of Public Documents under Article 171(6) of the Revised Penal Code and violation of Sections
3(a) and (e) of Republic Act No. 3019, The Anti-Graft and Corrupt Practices Act, as amended.
The appeal by certiorari, on the other hand, assails the Decision of the Court of Appeals in CA G.R. SP No.
113171, which affirmed the Order dated 13 July 2009 of the Ombudsman in OMB-C-A-07-0474-J on the
administrative aspect of the mentioned criminal complaint for Falsification and violation of Republic Act
No. 3019 against the Registrar of Deeds, respondent Espenesin. Initially, the Ombudsman issued a Decision
dated 30 April 2008, finding Espenesin guilty of Simple Misconduct and meting on Espenesin the penalty of
one (1) month suspension. On motion for reconsideration of Ampil, the Ombudsman favored Espenesin’s
arguments in his Opposition, and recalled the one-month suspension the Ombudsman had imposed on the
latter.
These consolidated cases arose from the following facts.
On 9 November 1995, ASB Realty Corporation (ASB) and Malayan Insurance Company (MICO) entered
into a Joint Project Development Agreement (JPDA) for the construction of a condominium building to be
known as "The Malayan Tower." Under the JPDA, MICO shall provide the real property located at the heart
of the Ortigas Business District, Pasig City, while ASB would construct, and shoulder the cost of
construction and development of the condominium building.
A year thereafter, on 20 November 1996, MICO and ASB entered into another contract, with MICO selling
to ASB the land it was contributing under the JPDA. Under the Contract to Sell, ownership of the land will
vest on ASB only upon full payment of the purchase price.
Sometime in 2000, ASB, as part of the ASB Group of Companies, filed a Petition for Rehabilitation with
Prayer for Suspension of Actions and Proceedings before the Securities and Exchange Commission (SEC).
As a result, the SEC issued a sixty (60) day Suspension Order (a) suspending all actions for claims against
the ASB Group of Companies pending or still to be filed with any court, office, board, body, or tribunal; (b)
212
enjoining the ASB Group of Companies from disposing of their properties in any manner, except in the
ordinary course of business, and from paying their liabilities outstanding as of the date of the filing of the
petition; and (c) appointing Atty. Monico V. Jacob as interim receiver of the ASB Group of
Companies.5 Subsequently, the SEC, over the objections of creditors, approved the Rehabilitation Plan
submitted by the ASB Group of Companies, thus:
PREMISES CONSIDERED, the objections to the rehabilitation plan raised by the creditors are hereby
considered unreasonable.
Accordingly, the Rehabilitation Plan submitted by petitioners is hereby APPROVED, except those
pertaining to Mr. Roxas’ advances, and the ASB-Malayan Towers. Finally, Interim Receiver Mr. Fortunato
Cruz is appointed as Rehabilitation Receiver.6 (Emphasis supplied).
Because of the obvious financial difficulties, ASB was unable to perform its obligations to MICO under the
JPDA and the Contract to Sell. Thus, on 30 April 2002, MICO and ASB executed their Third contract, a
Memorandum of Agreement (MOA),7 allowing MICO to assume the entire responsibility for the
development and completion of The Malayan Tower. At the time of the execution of the MOA, ASB had
already paid MICO ₱427,231,952.32 out of the ₱640,847,928.48 purchase price of the realty.8
The MOA specifies the entitlement of both ASB and MICO to net saleable areas of The Malayan Tower
representing their investments. It provides, in pertinent part:
Section 4. Distribution and Disposition of Units. (a) As a return of its capital investment in the Project, each
party shall be entitled to such portion of all the net saleable area of the Building that their respective
contributions to the Project bear to the actual construction cost. As of the date of the execution hereof, and
on the basis of the total costs incurred to date in relation to the Remaining Construction Costs (as defined in
Section 9(a) hereof), the parties shall respectively be entitled to the following (which entitlement shall be
conditioned on, and subject to, adjustments as provided in sub-paragraph (b) of Section 4 in the event that
the actual remaining cost of construction exceeds the Remaining Construction Cost):
(i) MICO – the net saleable area particularly described in Schedule 2 hereof.
(ii) ASB – the following net saleable area:
(A) the net saleable area which ASB had pre-sold for an aggregate purchase
price of ₱640,085,267.30 as set forth in Schedule 1 (including all paid and
unpaid proceeds of said presales);
(B) the net saleable area particularly described in Schedule 3 hereof which shall
be delivered to ASB upon completion of the Project; and,
(C) provided that the actual remaining construction costs do not exceed the
Remaining Construction Cost, the net saleable area particularly described in
Schedule 4 hereof which shall be delivered to ASB upon completion of the
Project and determination of its actual construction costs. If the actual
remaining construction costs exceed the Remaining Construction Cost, sub-
paragraph (b) of this Section 4 shall apply.
(b) In the event that the actual remaining construction costs exceed the Remaining Construction
Cost as represented and warranted by ASB to MICO under Section 9(a) hereof, and MICO pays
for such excess, the pro-rata sharing in the net saleable area of the Building, as provided in sub-
paragraph (a) of this Section 4 shall be adjusted accordingly. In such event, MICO shall be entitled
to such net saleable area in Schedule 4 that corresponds to the excess of the actual remaining cost
over the Remaining Construction Cost.
(c) To ensure the viability of the Project, the parties agree on a single pricing system, which MICO
shall have the exclusive right to fix and periodically adjust based on prevailing market conditions
in consultation with, but without need of consent of, ASB, for each party’s primary sale or other
disposition of its share in the net saleable area of the Building. In accordance with the immediately
preceding provision, MICO hereby adopts the selling prices set forth in Schedule 5 hereof. Each
party or its officers, employees, agents or representatives shall not sell or otherwise dispose any
 share of said party in the net saleable area of the Building below the prices fixed by MICO in
accordance with this Section 4 (c). MICO shall have the exclusive right to adopt financing and
discounting schemes to enhance marketing and sales of units in the Project and such right of MICO
shall not be restricted or otherwise limited by the foregoing single pricing system provision.
(d) Each party shall bear the profits earned and losses incurred as well as any and all taxes and
other expenses in connection with the allocation or sale of, or other transaction relating to, the units
allotted to each party.9
On 11 March 2005, Condominium Certificates of Title (CCTs) for 38 units 10 and the allotted parking spaces
were issued in the name of ASB. On even date but prior to its release, another set of CCTs covering the
same subject units but with MICO as registered owner thereof, was signed by Espenesin in his capacity as
Registrar of Deeds of Pasig City. Notably, Espenesin had likewise signed the CCTs which were originally
issued in ASB’s name.
On 2 April 2006, counsel for ASB wrote Espenesin calling his attention to the supposed amendment in the
CCTs which he had originally issued in ASB’s name. 11 Counsel for ASB demanded that Espenesin effect in
the second set of CCTs, the registration of the subject units in The Malayan Tower back to ASB’s name.
On 17 May 2006, Espenesin replied and explained, thus:
The registration of the Malayan-ASB Realty transaction, from its inception up to the issuance of titles, were
all handled by respondent Atty. Francis Serrano. He therefore appeared and we have considered him the
legitimate representative of both parties (sic). His representation, we gathered, covers the interest of both
MICO and ASB in as far as the titling of the condominium units are concerned.
Sometime ago Serrano requested that condominium titles over specified units be issued in consonance with
the sharing in the joint venture MOA. Titles were correspondingly issued as per request, some in the name
of MICO and some in the name of ASB. Before its release to the parties, Atty. Serrano came back and
requested that some titles issued in the name of ASB be changed to MICO because allegedly there was error
in the issuance.
Believing it was a simple error and on representation of the person we came to know and considered the
representative of both parties, we erased the name ASB Realty Corporation on those specified titles and
placed instead the name Malayan Insurance Company.
To our mind, the purpose was not to transfer ownership but merely to rectify an error committed in the
issuance of titles. And since they were well within our capacity to do, the titles not having been released yet
to its owner, we did what we believed was a simple act of rectifying a simple mistake.12
After learning of the amendment in the CCTs issued in ASB’s name, Ampil, on 23 January 2007, wrote
respondents Yuchengco and Cheng, President and Chief Financial Officer of MICO, respectively,
introducing himself as an unsecured creditor of ASB Holdings, Inc., one of the corporations forming part of
the ASB Group of Companies.13Ampil averred that MICO had illegally registered in its name the subject
units at The Malayan Tower which were reserved for ASB under the MOA, and actually, already registered
in ASB’s name with the Register of Deeds of Pasig City. Ampil pointed out that the "condominium units
should have benefited him and other unsecured creditors of ASB because the latter had categorically
informed them previously that the same would be contributed to the Asset Pool created under the
Rehabilitation Plan of the ASB Group of Companies." Ultimately, Ampil demanded that Yuchengco and
Cheng rectify the resulting error in the CCTs, and facilitate the registration of the subject units back to
ASB’s name.
Respondents paid no heed to ASB’s and Ampil’s demands.
As previously adverted to, Ampil charged respondents with Falsification of Public Documents under Article
171(6) of the Revised Penal Code and violation of Sections 3(a) and (e) of Republic Act No. 3019 before the
Office of the Ombudsman, alleging the following:
1. Respondents, in conspiracy, erased the name of ASB, and intercalated and substituted the name
of MICO under the entry of registered owner in the questioned CCTs covering the subject units of
The Malayan Tower;
213
2. The alterations were done without the necessary order from the proper court, in direct violation
of Section 10814 of Presidential Decree No. 1529;
3. Respondents violated Article 171(6) of the Revised Penal Code by:
3.1 Altering the CCTs which are public documents;
3.2 Effecting the alterations on genuine documents;
3.3 Changing the meaning of the CCTs with MICO now appearing as registered owner of
the subject units in Malayan Tower; and
3.4 Effectively, making the documents speak something false when ASB is the true
owner of the subject units, and not MICO.
4. Ampil, as unsecured creditor of ASB, was unjustly prejudiced by the felonious acts of
respondents;
5. Respondents violated Sections 3(a) and (e) of Republic Act No. 3019:
5.1 Respondent Espenesin, as Registrar of the Pasig City Registry of Deeds, committed
an offense in connection with his official duties by allowing himself to be persuaded,
induced or influenced by respondent Serrano into altering the questioned CCTs; and
5.2 The actions of respondent Espenesin demonstrate manifest partiality, evident bad
faith and/or, at the least, gross inexcusable negligence.
6. Respondents Yuchengco and Cheng, being responsible officers of MICO, as principals by
inducement and conspirators of Espenesin and Serrano, are likewise liable for falsification of the
CCTs and violation of Sections 3(a) and (e) of Republic Act No. 3019. 15
As required by the Ombudsman, respondents filed their counter-affidavits: Espenesin and Serrano filed
individually, while Yuchengco and Cheng filed jointly. Respondents’ respective counter-affidavits
uniformly denied petitioner’s charges and explicated as follows:
Respondent Espenesin countered, among others, (i) that their intention was only to cause the necessary
rectification on certain errors made on the CCTs in issue; (ii) that since the CCTs were not yet issued and
released to the parties, it is still within his authority, as part of the registration process, to make the necessary
amendments or corrections thereon; (iii) that no court order would be necessary to effect such changes, the
CCTs still being within the control of the Register of Deeds and have not yet been released to the respective
owners; (iv) that the amendments were made not for the purpose of falsifying the CCTs in issue but to make
the same reflect and declare the truth; and (v) that he merely made the corrections in accordance with the
representations of respondent Serrano who he believed to be guarding and representing both the interests of
MICO and ASB.
Respondent Serrano, on the other hand, argued: (i) that the units in issue are not yet owned by ASB; (ii) that
these units were specifically segregated and reserved for MICO in order to answer for any excess in the
estimated cost that it will expend in the completion of the Malayan Tower; (iii) that ASB is only entitled to
these reserved units only after the Malayan Tower is completed and that the units are not utilized to cover
for the increase in the cost expended by MICO pursuant to Section 4(c) of the MOA; (iv) that the Malayan
Tower was still incomplete at the time when the alterations were made on the CCT, hence, the claim of
ownership of ASB over the reserved units is premature and totally baseless; (v) that prior to the fulfillment
of the resolutory condition, that is, after the completion of the Malayan Tower and there remains a balance
in the Remaining Construction Cost, the units still rightfully belongs to MICO; and (vi) that the alteration
was made merely for the purpose of correcting an error.
Respondents Cheng and Yuchengco, while adopting the foregoing arguments of Espenesin and Serrano,
further averred that: (i) Ampil has no legal personality to file this suit, he being merely an unsecured creditor
of ASB whose interest was not definitively shown to have been damaged by the subject controversy; (ii) that
their participation as respondents and alleged co-conspirators of Serrano and Espenesin was not clearly
shown and defined in the complaint; (iii) the CCTs issued in the name of ASB have not yet been entered in
the Registration Book at the time when the alterations were effected, hence, the same could still be made
subject of appropriate amendments; (iv) that the CCTs in issue named in favor of ASB were mere drafts and
cannot legally be considered documents within the strict definition of the law; (v) that court order
authorizing to amend a title is necessary only if the deed or document sought to be registered has already
been entered in the registration book; and (vi) that MICO is the duly registered owner of the land on which
Malayan Tower stands and ASB was merely referred to as the developer. 16
Thereafter, the Ombudsman issued the assailed Resolution in G.R. No. 192685 dismissing Ampil’s
complaint. For the Ombudsman, the resolution of whether respondents falsified the CCTs must be prefaced
by a determination of who, between MICO and ASB, is the rightful owner of the subject units. The
Ombudsman held that it had no authority to interpret the provisions of the MOA and, thus, refrained from
resolving the preliminary question of ownership. Given the foregoing, the Ombudsman was hard pressed to
make a categorical finding that the CCTs were altered to speak something false. In short, the Ombudsman
did not have probable cause to indict respondents for falsification of the CCTs because the last element of
the crime, i.e., that the change made the document speak something false, had not been established.
Significantly, the Ombudsman did not dispose of whether probable cause exists to indict respondents for
violation of Sections 3(a) and (e) of Republic Act No. 3019.
Ampil filed a Motion for Reconsideration. However, in yet another setback, the Ombudsman denied
Ampil’s motion and affirmed the dismissal of his complaint.
On the administrative litigation front and as previously narrated, the Ombudsman found Espenesin liable for
Simple Misconduct. However, on motion for reconsideration of Ampil praying for a finding of guilt against
Espenesin for Grave Misconduct and Dishonesty, the Ombudsman reconsidered its earlier resolution and
recalled the one-month suspension meted on Espenesin.
Thereafter, Ampil filed a petition for review under Rule 43 of the Rules of Court before the appellate court.
And as already stated, the appellate court affirmed the Ombudsman’s resolution absolving Espenesin of not
just Grave Misconduct and Dishonesty, but also of Simple Misconduct.
Hence, this dual recourse by Ampil: first, alleging grave abuse of discretion in the Ombudsman’s failure to
find probable cause to indict respondents for Falsification of Public Documents under Article 171(6) of the
Revised Penal Code, and for their commission of corrupt practices under
Sections 3(a) and (e) of Republic Act No. 3019; and second, raising grievous error of the Court of Appeals
in affirming the Ombudsman’s absolution of Espenesin from administrative liability.
To obviate confusion, we shall dispose of the first issue, i.e., whether probable cause exists to indict
respondents for Falsification of Public Documents under Article 171(6) of the Revised Penal Code and for
their commission of corrupt practices under Sections 3(a) and (e) of Republic Act No. 3019.
Despite the Ombudsman’s categorical dismissal of his complaint, Ampil is adamant on the existence of
probable cause to bring respondents to trial for falsification of the CCTs, and for violation of Sections 3(a)
and (e) of Republic Act No. 3019. In fact, he argues that Espenesin has been held administratively liable by
the Ombudsman for altering the CCTs. At the time of the filing of G.R. No. 192685, the Ombudsman had
not yet reversed its previous resolution finding Espenesin liable for simple misconduct. He insists that the
admission by respondents Espenesin and Serrano that they altered the CCTs should foreclose all questions
on all respondents’ (Espenesin’s, Serrano’s, Yuchengco’s and Cheng’s) liability for falsification and their
commission of corrupt practices, under the Revised Penal Code and Republic Act No. 3019, respectively. In
all, Ampil maintains that the Ombudsman’s absolution of respondents is tainted with grave abuse of
discretion.
G.R. No. 192685 is partially impressed with merit. Accordingly, we find grave abuse of discretion in the
Ombudsman’s incomplete disposition of Ampil’s complaint.
That the Ombudsman is a constitutional officer duty bound to "investigate on its own, or on complaint by
any person, any act or omission of any public official, employee, office or agency, when such act or
omission appears to be illegal, unjust, improper, or inefficient" 17 brooks no objection. The Ombudsman’s
conduct of preliminary investigation is both power and duty. Thus, the Ombudsman and his Deputies, are
constitutionalized as protectors of the people, who "shall act promptly on complaints filed in any form or
214
manner against public officials or employees of the government x x x, and shall, x x x notify the
complainants of the action taken and the result thereof."18
The raison d'être for its creation and endowment of broad investigative authority is to insulate the Office of
the Ombudsman from the long tentacles of officialdom that are able to penetrate judges’ and fiscals’ offices,
and others involved in the prosecution of erring public officials, and through the execution of official
pressure and influence, quash, delay, or dismiss investigations into malfeasances and misfeasances
committed by public officers.19
Plainly, the Ombudsman has "full discretion," based on the attendant facts and circumstances, to determine
the existence of probable cause or the lack thereof.20 On this score, we have consistently hewed to the policy
of non-interference with the Ombudsman’s exercise of its constitutionally mandated powers. 21 The
Ombudsman’s finding to proceed or desist in the prosecution of a criminal case can only be assailed through
certiorari proceedings before this Court on the ground that such determination is tainted with grave abuse of
discretion which contemplates an abuse so grave and so patent equivalent to lack or excess of jurisdiction. 22
However, on several occasions, we have interfered with the Ombudsman’s discretion in determining
probable cause:
(a) To afford protection to the constitutional rights of the accused;
(b) When necessary for the orderly administration of justice or to avoid oppression or multiplicity
of actions;
(c) When there is a prejudicial question which is sub judice;
(d) When the acts of the officer are without or in excess of authority;
(e) Where the prosecution is under an invalid law, ordinance or regulation;
(f) When double jeopardy is clearly apparent;
(g) Where the court has no jurisdiction over the offense;
(h) Where it is a case of persecution rather than prosecution;
(i) Where the charges are manifestly false and motivated by the lust for vengeance. 23 (Emphasis
supplied).
The fourth circumstance is present in G.R. No. 192685.
While we agree with the Ombudsman’s disquisition that there is no probable cause to indict respondents for
Falsification of Public Documents under Article 171(6) of the Revised Penal Code, we are puzzled why the
Ombudsman completely glossed over Ampil’s charge that respondents committed prohibited acts listed in
Sections 3(a) and (e) of Republic Act No. 3019. Nowhere in the Resolution or in the Order denying
reconsideration thereof did the Ombudsman tackle and resolve the issue of whether respondents violated the
particular provisions of Republic Act No. 3019.
Curiously, the Ombudsman docketed Ampil’s complaint-affidavit as one "for: Falsification of Public
Documents and Violation of Sections 3(a) and (e) of Republic Act No. 3019, as amended." 24 The
Ombudsman even prefaced the Resolution, thus: "this has reference to the complaint filed by Oscar Ampil
on 17 September 2007 against respondents, for Falsification of Public Documents and Violation of Sections
3, paragraphs (a) and (e) of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, as amended."25
The Ombudsman’s silence on the component anti-graft charges is pointed up by the specific allegations in
Ampil’s complaint-affidavit that:
18. The acts of ATTY. ESPENESIN and his co-conspirators are clear violations of Section 3 paragraph (a)
and/or (e) of Republic Act No. 3019 otherwise known as the Anti-Graft and Corrupt Practices Act x x x;
xxxx
19. On the basis of the evidence x x x and the admissions of the conspirators themselves, ATTY.
ESPENESIN is liable under both pars. (a) and (e) thereof or either of the two. By maliciously and
feloniously altering the subject CCT’s (sic), contrary to law and to the prejudice of ASB and Ampil, ATTY.
ESPENESIN committed an offense in connection with his official duties and he admitted having done so in
conspiracy with his co-respondents. x x x ATTY. ESPENESIN allowed himself to be persuaded, induced or
influenced into committing such violation or offense which is the substance of par. (a) of RA 3019;
20. In committing such unauthorized and unlawful alterations on the subject CCT’s (sic), ATTY.
ESPENESIN caused undue injury to ASB and to AMPIL as an unsecured creditor, who is ultimately one of
the beneficiaries of said CCT from the ASSET POOL created by the SEC, and gave MICO unwarranted
benefits, advantage or preference in the discharge of his official duties as Register of Deeds of Pasig City.
Such acts were admitted by ATTY. ESPENESIN in his letter to ASB x x x. Such acts, taken together with
his admission, indubitably show ATTY. ESPENESIN’s manifest partiality, evident bad faith and/or, at the
least, his gross inexcusable negligence in doing the same;
21. ATTY. ESPENESIN is liable under Section 3 pars. (a) and/or (e) of RA 3019, as well as under Article
171 par. 6 of the RPC. ATTY. SERRANO, YVONNE S. YUCHENGCO and (sic) GEMMA O. CHENG are
also liable for violation of the said provisions of law in conspiracy with ATTY. ESPENESIN, the latter as a
principal via direct participation, ATTY. SERRANO, as principal by inducement and YUCHENGCO and
CHENG, also by inducement, who being responsible officers of MICO ultimately benefited from said
unlawful act.26 and the pith of the Resolution which carefully and meticulously dissected the presence of the
first three definitive elements of the crime of falsification under Article 171(6) of the Revised Penal Code:
The first three definitive elements of the crime, albeit present, are defeated by the absence of the fourth.
The respondents readily admitted that an alteration was indeed made on the CCTs in issue allegedly for the
purpose of correcting a mistake in the name of the registered owner of the condominium units involved.
Said alteration had obviously changed the tenor of the CCTs considering that ASB, the initially named
owner, was changed into MICO. The first and third elements are undeniably present.
Anent the second element, the respondents argued that the CCTs in issue were mere drafts and are not
legally considered "genuine documents" within the strict definition of the law. Albeit the contention is
partially true, no proof has been shown to prove that the CCTs issued in favor of ASB were mere drafts.
The CCTs of ASB are obviously complete. If we are to compare it with the appearance and contents of the
CCTs issued in favor of MICO, one will notice no definitive difference between the two except that one set
was named in favor of ASB and the other set, in favor of MICO. Nothing is shown that will clearly prove
that the former were mere drafts and the latter are the final copies. As far as the appearance of the CCTs of
ASB is concerned, all appear to be complete and genuine. Proof to the contrary must be shown to prove
otherwise.
Delivery of the titles to the named owners is not a pre-requisite before all these CCTs can be legally
categorized as genuine documents. The fact that the same had already been signed by respondent Espenesin
in his capacity as Registrar of Deeds of Pasig City and the notations imprinted thereon appeared to have
been entered on March 11, 2005 at 11:55 a.m. at the Registry Books of Pasig City, the CCTs in issue are
bound to be treated as genuine documents drafted and signed in the regular performance of duties of the
officer whose signature appears thereon.27
On the whole, the Ombudsman’s discussion was straightforward and categorical, and ultimately established
that Espenesin, at the urging of Serrano, altered the CCTs issued in ASB’s name resulting in these CCTs
ostensibly declaring MICO as registered owner of the subject units at The Malayan Tower.
Despite the admission by Espenesin that he had altered the CCTs and the Ombudsman’s findings thereon,
the Ombudsman abruptly dismissed Ampil’s complaint-affidavit, resolving only one of the charges
contained therein with nary a link regarding the other charge of violation of Sections 3(a) and (e) of
Republic Act No. 3019. Indeed, as found by the Ombudsman, the 4th element of the crime of Falsification
of Public Documents is lacking, as the actual ownership of the subject units at The Malayan Tower has yet
to be resolved. Nonetheless, this circumstance does not detract from, much less diminish, Ampil’s charge,
and the evidence pointing to the possible commission, of offenses under Sections 3(a) and (e) of the Anti-
Graft and Corrupt Practices Act.
Sections 3(a) and (e) of Republic Act No. 3019 reads:
215
Section 3. Corrupt practices of public officers. – In addition to acts or omissions of public officers already
penalized by existing law, the following shall constitute corrupt practices of any public officer and are
hereby declared to be unlawful:
(a) Persuading, inducing or influencing another public officer to perform an act constituting a violation of
rules and regulations duly promulgated by competent authority or an offense in connection with the official
duties of the latter, or allowing himself to be persuaded, induced, or influenced to commit such violation or
offense.
xxxx
(e) Causing any undue injury to any party, including the Government, or giving any private party any
unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial
functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall
apply to officers and employees of offices or government corporations charged with the grant of licenses or
permits or other concessions.
The elements of Section 3(a) of Republic Act No. 3019 are:
(1) the offender is a public officer;
(2) the offender persuades, induces, or influences another public officer to perform an act or the
offender allows himself to be persuaded, induced, or influenced to commit an act;
(3) the act performed by the other public officer or committed by the offender constitutes a
violation of rules and regulations duly promulgated by competent authority or an offense in
connection with the official duty of the latter. (Emphasis supplied).
Whereas, paragraph (e) of the same section lists the following elements:
(1) the offender is a public officer;
(2) the act was done in the discharge of the public officer’s official, administrative or judicial
functions;
(3) the act was done through manifest partiality, evident bad faith, or gross inexcusable negligence;
and
(4) the public officer caused any undue injury to any party, including the Government, or gave any
unwarranted benefits, advantage or preference.28
As Registrar of the Registry of Deeds of Pasig City, Espenesin is tasked, among others, to review deeds and
other documents for conformance with the legal requirements of registration. 29 Section 10 of Presidential
Decree No. 1529, Amending and Codifying the Laws Relative to Registration of Property and for Other
Purposes provides:
Section 10. General functions of Registers of Deeds. – The office of the Register of Deeds constitutes a
public repository of records of instruments affecting registered or unregistered lands and chattel mortgages
in the province or city wherein such office is situated.
It shall be the duty of the Register of Deeds to immediately register an instrument presented for registration
dealing with real or personal property which complies with all the requisites for registration. He shall see to
it that said instrument bears the proper documentary and science stamps and that the same are properly
cancelled. If the instrument is not registerable, he shall forthwith deny registration thereof and inform the
presentor of such denial in writing, stating the ground or reason therefore, and advising him of his right to
appeal by consulta in accordance with Section 117 of the Decree.
Most importantly, a Registrar of the Registry of Deeds is charged with knowledge of Presidential Decree
No. 1529, specifically Sections 5730 and 108.31
In the instant case, the elements of the offenses under Sections 3(a) and (e) of Republic Act No. 3019,
juxtaposed against the functions of a Registrar of the Registry of Deeds establish a prima facie graft case
against Espenesin and Serrano only. Under Section 3(a) of Republic Act No. 3019, there is a prima facie
case that Espenesin, at the urging of Serrano, allowed himself to be persuaded to alter the CCTs originally
issued in ASB’s name, against the procedure provided by law for the issuance of CCTs and registration of
property. In addition, under Section 3(e) of the same law, there is likewise a prima facie case that Espenesin,
through gross inexcusable negligence, by simply relying on the fact that all throughout the transaction to
register the subject units at The Malayan Tower he liaised with Serrano, gave MICO an unwarranted benefit,
advantage or preference in the registration of the subject units.
In Sison v. People of the Philippines, we expounded on Section 3(e) of Republic Act No. 3019:
The third element of Section 3 (e) of RA 3019 may be committed in three ways, i.e., through manifest
partiality, evident bad faith or gross inexcusable negligence. Proof of any of these three in connection with
the prohibited acts mentioned in Section 3(e) of RA 3019 is enough to convict.
Explaining what "partiality," "bad faith" and "gross negligence" mean, we held:
"Partiality" is synonymous with "bias" which "excites a disposition to see and report matters as they are
wished for rather than as they are." "Bad faith does not simply connote bad judgment or negligence; it
imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn
duty through some motive or intent or ill will; it partakes of the nature of fraud." "Gross negligence has been
so defined as negligence characterized by the want of even slight care, acting or omitting to act in a situation
where there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference to
consequences in so far as other persons may be affected. It is the omission of that care which even
inattentive and thoughtless men never fail to take on their own property."
In the instant case, petitioner was grossly negligent in all the purchases that were made under his watch.
Petitioner’s admission that the canvass sheets sent out by de Jesus to the suppliers already contained his
signatures because he pre-signed these forms only proved his utter disregard of the consequences of his
actions. Petitioner also admitted that he knew the provisions of RA 7160 on personal canvass but he did not
follow the law because he was merely following the practice of his predecessors. This was an admission of a
mindless disregard for the law in a tradition of illegality. This is totally unacceptable, considering that as
municipal mayor, petitioner ought to implement the law to the letter. As local chief executive, he should
have been the first to follow the law and see to it that it was followed by his constituency. Sadly, however,
he was the first to break it.
Petitioner should have complied with the requirements laid down by RA 7160 on personal canvass, no
matter how strict they may have been. Dura lex sed lex. The law is difficult but it is the law. These
requirements are not empty words but were specifically crafted to ensure transparency in the acquisition of
government supplies, especially since no public bidding is involved in personal canvass. Truly, the
requirement that the canvass and awarding of supplies be made by a collegial body assures the general
public that despotic, irregular or unlawful transactions do not occur. It also guarantees that no personal
preference is given to any supplier and that the government is given the best possible price for its
procurements.
The fourth element is likewise present. While it is true that the prosecution was not able to prove any undue
injury to the government as a result of the purchases, it should be noted that there are two ways by which
Section 3(e) of RA 3019 may be violated—the first, by causing undue injury to any party, including the
government, or the second, by giving any private party any unwarranted benefit, advantage or preference.
Although neither mode constitutes a distinct offense, an accused may be charged under either mode or both.
The use of the disjunctive "or’ connotes that the two modes need not be present at the same time. In other
words, the presence of one would suffice for conviction.
Aside from the allegation of undue injury to the government, petitioner was also charged with having given
unwarranted benefit, advantage or preference to private suppliers. Under the second mode, damage is not
required.
The word "unwarranted" means lacking adequate or official support; unjustified; unauthorized or without
justification or adequate reason. "Advantage" means a more favorable or improved position or condition;
benefit, profit or gain of any kind; benefit from some course of action. "Preference" signifies priority or
higher evaluation or desirability; choice or estimation above another.
In order to be found guilty under the second mode, it suffices that the accused has given unjustified favor or
benefit to another, in the exercise of his official, administrative or judicial functions. Petitioner did just that.
216
The fact that he repeatedly failed to follow the requirements of RA 7160 on personal canvass proves that
unwarranted benefit, advantage or preference was given to the winning suppliers. These suppliers were
awarded the procurement contract without the benefit of a fair system in determining the best possible price
for the government. The private suppliers, which were all personally chosen by respondent, were able to
profit from the transactions without showing proof that their prices were the most beneficial to the
government. For that, petitioner must now face the consequences of his acts. 32 (Emphasis supplied).
We stress that the Ombudsman did not find probable cause to indict respondents for falsification simply
because the Ombudsman could not categorically declare that the alteration made the CCT speak falsely as
the ownership of the subject units at The Malayan Tower had yet to be determined. However, its initial
factual findings on the administrative complaint categorically declared, thus:
x x x Espenesin justified his action by asseverating that since the CCTs were still under the possession and
control of the Register of Deeds and have not yet been distributed to the owners, amendments can still be
made thereon.
It is worthy to note that the CCTs of ASB, at the time when the amendment was made, were obviously
complete. From its face, we can infer that all have attained the character of a binding public document. The
signature of Espenesin is already affixed thereon, and on its face, it was explicitly declared that the titles
have already been entered in the Registration Book of the Register of Deeds of Pasig City on March 11,
2005 at 11:55 a.m. Allegations to the contrary must be convincingly and positively proven, otherwise, the
presumption holds that the CCTs issued in the name of ASB were regular and the contents thereon binding.
Stated in a different light, delivery of the titles to the named owners is not a pre-requisite before all these
CCTs can be legally categorized as genuine documents. The fact that the same had already been signed by x
x x Espenesin in his capacity as Register of Deeds of Pasig City and the notations imprinted thereon
appeared to have been entered on March 11, 2005 at 11:55 a.m. at the Registry Books of Pasig City, the
CCTs in issue are bound to be treated as genuine documents drafted and signed in the regular performance
of duties of the officer whose signature appears thereon. The law has made it so clear that it is the entry of
the title in the Registration Book that controls the discretion of the Register of Deeds to effect the necessary
amendments and not the actual delivery of the titles to the named owners.
This being the case, strict compliance with the mandates of Section 108 of P.D. 1529 is strictly called for.
The provision is clear that upon entry of a certificate of title (which definitely includes Condominium
Certificate of Title) attested to by the Register of Deeds, no amendment shall be effected thereon except
upon lawful order of the court.
In the instant case, it became obvious that after the CCTs of ASB were entered in the Registration Book on
March 11, 2005 at exactly 11:55 a.m., the notations thereon were thereafter amended by Espenesin when
Atty. Serrano purportedly informed him of the alleged error inscribed therein. The proper remedy that
should have been undertaken by Espenesin soon after he was informed of the error is to either initiate the
appropriate petition himself or to suggest to the parties to the MOA to file said petition in court for the
amendment of the CCTs. An amendment by way of a shortcut is not allowed after entry of the title in the
Registration Book.
xxxx
If the Regional Trial Court sitting as a land registration court is not legally authorized to determine the
respective rights of the parties to the MOA when deciding on the petition for amendment and cancellation of
title, all the more with the Registrar of Deeds who is legally not empowered to make such determination and
to cause an automatic amendment of entries in the Registration Book on the basis of his unauthorized
determination.
Espenesin’s liability is grounded on the untimely and unauthorized amendment of the CCTs in issue. This is
regardless of whether the amendment had made the CCTs speak of either a lie or the truth. What defines his
error is his inability to comply with the proper procedure set by law.33 (Emphasis supplied).
We likewise stress that the determination of probable cause does not require certainty of guilt for a crime.
As the term itself implies, probable cause is concerned merely with probability and not absolute or even
moral certainty;34 it is merely based on opinion and reasonable belief.35 It is sufficient that based on the
preliminary investigation conducted, it is believed that the act or omission complained of constitutes the
offense charged. Well-settled in jurisprudence, as in Raro v. Sandiganbayan, 36 that:
x x x Probable cause has been defined as the existence of such facts and circumstances as would excite the
belief, in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person
charged was guilty of the crime for which he was prosecuted. 37
Probable cause is a reasonable ground for presuming that a matter is or may be well-founded on such state
of facts in the prosecutor's mind as would lead a person of ordinary caution and prudence to believe — or
entertain an honest or strong suspicion — that it is so.38
A finding of probable cause needs only to rest on evidence showing that more likely than not a crime has
been committed and there is enough reason to believe that it was committed by the accused. It need not be
based on clear and convincing evidence of guilt, neither on evidence establishing absolute certainty of
guilt.39
A finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure a
conviction. It is enough that it is believed that the act or omission complained of constitutes the offense
charged. Precisely, there is a trial for the reception of evidence of the prosecution in support of the charge. 40
A finding of probable cause merely binds over the suspect to stand trial. It is not a pronouncement of guilt.
The term does not mean "actual and positive cause" nor does it import absolute certainty. It is merely based
on opinion and reasonable belief. x x x Probable cause does not require an inquiry into whether there is
sufficient evidence to procure a conviction.41 (Emphasis and italics supplied).
In this instance, Espenesin explains and categorically admits that he altered, nay corrected, 38 certificates of
title which we again reproduce for easy reference:
Sometime ago Serrano requested that condominium titles over specified units be issued in consonance with
the sharing in the joint venture MOA. Titles were correspondingly issued as per request, some in the name
of MICO and some in the name of ASB. Before its release to the parties, Atty. Serrano came back and
requested that some titles issued in the name of ASB be changed to MICO because allegedly there was error
in the issuance.
Believing it was a simple error and on representation of the person we came to know and considered the
representative of both parties, we erased the name ASB Realty Corporation on those specified titles and
placed instead the name Malayan Insurance Company.
To our mind, the purpose was not to transfer ownership but merely to rectify an error committed in the
issuance of titles. And since they were well within our capacity to do, the titles not having been released yet
to its owner, we did what we believed was a simple act of rectifying a simple mistake. 42
The letter of Espenesin itself underscores the existence of a prima facie case of gross negligence:
1. Serrano transacted the registration of the units in The Malayan Tower with the Office of the
Register of Deeds, Pasig City;
2. Serrano had previously presented a joint venture agreement, the MOA, which Espenesin
followed in the initial preparation and issuance of the titles;
3. Before some CCTs initially issued in ASB’s name were released, Serrano returned and
requested that some titles issued in the name of ASB be changed to MICO because those titles
were supposedly erroneously registered to ASB; and
4. Just on Serrano’s utterance and declaration which Espenesin readily believed because he
considered Serrano the representative of both parties, and without any other documentation to base
the amendment on, Espenesin erased the name of ASB on those specified titles and replaced it with
the name of MICO.
Espenesin, a Registrar of Deeds, relied on Serrano’s word alone that a supposed error has been committed.
Even if ownership of the units covered by the amended CCTs has not been categorically declared as ASB’s
given the ongoing dispute between the parties, the MOA which Espenesin had previously referred to,
allocates those units to ASB:
217
Section 4. Distribution and Disposition of Units. (a) As a return of its capital investment in the Project, each
party shall be entitled to such portion of all the net saleable area of the Building that their respective
contributions to the Project bear to the actual construction cost. As of the date of the execution hereof, and
on the basis of the total costs incurred to date in relation to the Remaining Construction Costs (as defined in
Section 9(a) hereof), the parties shall respectively be entitled to the following (which entitlement shall be
conditioned on, and subject to, adjustments as provided in sub-paragraph (b) of Section 4 in the event that
the actual remaining cost of construction exceeds the Remaining Construction Cost):
(i) MICO – the net saleable area particularly described in Schedule 2 hereof.
(ii) ASB – the following net saleable area:
(A) the net saleable area which ASB had pre-sold for an aggregate purchase price of
₱640,085,267.30 as set forth in Schedule 1 (including all paid and unpaid proceeds of said pre-
sales);
(B) the net saleable area particularly described in Schedule 3 hereof which shall be delivered to
ASB upon completion of the Project; and,
(C) provided that the actual remaining construction costs do not exceed the Remaining
Construction Cost, the net saleable area particularly described in Schedule 4 hereof which shall be
delivered to ASB upon completion of the Project and determination of its actual construction costs.
If the actual remaining construction costs exceed the Remaining Construction Cost, sub-paragraph
(b) of this Section 4 shall apply. 43
The MOA even recognizes and specifies that:
E. ASB has pre-sold a number of condominium units in the Project to certain buyers as set forth in Schedule
1 hereof, and in order to protect the interests of these buyers and preserve the interest in the Project, the
goodwill and business reputation of Malayan, Malayan has proposed to complete the Project, and ASB has
accepted such proposal, subject to the terms and conditions contained herein, including the contribution to
the Project (a) by Malayan of the Lot and (b) by ASB of its interest as buyer under the Contract to Sell.
xxxx
Section 3. Recognition of ASB’s Investment. The parties confirm that as of the date hereof, ASB invested in
the Project an amount equivalent to its entitlement to the net saleable area of the Building under Section 4
below, including ASB’s interest as buyer under the Contract to Sell. 44
One fact deserves emphasis. The ownership of the condominium units remains in dispute and, by necessary
inference, does not lie as well in MICO. By his baseless reliance on Serrano’s word and representation,
Espenesin allowed MICO to gain an unwarranted advantage and benefit in the titling of the 38 units in The
Malayan Tower.
That a prima facie case for gross negligence amounting to violation of Sections 3(a) and (e) of Republic Act
No. 3019 exists is amply supported by the fact that Espenesin disregarded the well-established practice
necessitating submission of required documents for registration of property in the Philippines:
Documents Required for Registration of Real Property with the Register of Deeds:
1. Common Requirements
o Original copy of the Deed or Instrument (Original Copy + 2 duplicate copies)If the original copy
cannot be produced, the duplicate original or certified true copy shall be presented accompanied
with a sworn affidavit executed by the interested party why the original copy cannot be presented.
o Owner’s copy of the Certificate of Title or Co-owner’s copy if one has been issued. (Original
Copy + 2 duplicate copies)
o Latest Tax Declaration if the property is an unregistered land. (Original Copy + 2 duplicate
copies)
2. Specific Requirements
1. Deed of Sale/Transfer
xxxx
For Corporation
 1. Secretary’s Certificate or Board Resolution to Sell or Purchase (Original Copy +
Duplicate Copy)
2. Articles of Incorporation (for transferee corporation) (1 Certified Copy of the Original)
3. Certificate of the Securities and Exchange Commission (SEC) that the Articles of
Incorporation had been registered . (1 Certified Copy of the Original)
4. For Condominium or Condominium Certificate of Transfer, affidavit/certificate of the
Condominium Corporation that the sale/transfer does not violate the 60-40 rule.(Original
Copy + 1 Duplicate Copy)
5. Subsequent transfer of CCT requires Certificate of the Condominium Management.
(Original Copy)
6. Sale by a Corporation Sole, court order is required.(Original copy of the Court Order)
Additional Requirements
xxxx
11. Condominium Projects
Master Deed (Original Copy + 1 Duplicate Copy)
Declaration of Restriction (Original Copy + 1 Duplicate Copy)
Diagrammatic Floor Plan (Original Copy + 1 Duplicate Copy)
If the Condominium Certificate of Title is issued for the first time in the name of the registered
owner, require the following:
o Certificate of Registration with the Housing and Land Use Regulatory Board (Original
Copy + 1 Duplicate Copy)
o Development Permit (Original Copy + 1 Duplicate Copy)
o License to Sell (Original Copy + 1 Duplicate Copy)45
Espenesin, by his own explanation, relied on nothing more than Serrano, who he "came to know and
considered as representative of both parties," and Serrano’s interpretation of the MOA that Serrano had
brought with him.
On the whole, there is sufficient ground to engender a well-founded belief that respondents Espenesin and
Serrano committed prohibited acts listed in Sections 3(a) and (e) of Republic Act No. 3019.
As regards Yuchengco and Cheng, apart from Ampil’s general assertions that the two, as officers of MICO,
benefited from the alteration of the CCTs, there is a dearth of evidence pointing to their collective
responsibility therefor. While the fact of alteration was admitted by respondents and was affirmed in the
Ombudsman’s finding of fact, there is nothing that directly links Yuchengco and Cheng to the act.
We are aware that the calibration of evidence to assess whether a prima facie graft case exists against
respondents is a question of fact. We have consistently held that the Supreme Court is not a trier of facts,
more so in the consideration of the extraordinary writ of certiorari where neither questions of fact nor law
are entertained, but only questions of lack or excess of jurisdiction or grave abuse of discretion. 46 In this
case, however, certiorari will lie, given that the Ombudsman made no finding at all on respondents possible
liability for violation of Sections 3(a) and (e) of Republic Act No. 3019.
We hasten to reiterate that we are only dealing herein with the preliminary investigation aspect of this case.
We do not adjudge respondents’ guilt or the lack thereof. The assertions of Espenesin and Serrano on the
former’s good faith in effecting the alteration and the pending arbitration case before the Construction
Industry Arbitration Commission involving the correct division of MICO’s and ASB’s net saleable areas in
The Malayan Tower are matters of defense which they should raise during trial of the criminal case.
As regards the administrative liability of Espenesin, the basic principle in the law of public officers is the
three-fold liability rule, which states that the wrongful acts or omissions of a public officer, Espenesin in
these cases, may give rise to civil, criminal and administrative liability. An action for each can proceed
independently of the others.47
On this point, we find that the appellate court erred when it affirmed the Ombudsman’s last ruling that
Espenesin is not administratively liable.
218
Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful
behavior or gross negligence by a public officer.48
In Grave Misconduct, as distinguished from Simple Misconduct, the elements of corruption, clear intent to
violate the law or flagrant disregard of established rules, must be manifest49 and established by substantial
evidence. Grave Misconduct necessarily includes the lesser offense of Simple Misconduct. 50 Thus, a person
charged with Grave Misconduct may be held liable for Simple Misconduct if the misconduct does not
involve any of the elements to qualify the misconduct as grave. 51
In (G.R. No. 199115), the elements particular to Grave Misconduct are, by the Ombudsman’s own finding,
present. Corruption, as an element of Grave Misconduct, consists in the act of an official or fiduciary person
who unlawfully and wrongfully uses his station or character to procure some benefit for himself or for
another person, contrary to duty and the rights of others. 52 This has already been demonstrated as discussed
above. And, there is here a manifest disregard for established rules on land registration by a Register of
Deeds himself. As he himself admits in his letter, Espenesin erased the name of ASB on the specified CCTs
because he believed that Serrano’s request for the re-issuance thereof in MICO’s name constituted simple
error.
Section 108 of Presidential Decree No. 1529 provides:
Section 108. Amendment and alteration of certificates. No erasure, alteration, or amendment shall be made
upon the registration book after the entry of a certificate of title or of a memorandum thereon and the
attestation of the same be Register of Deeds, except by order of the proper Court of First Instance. A
registered owner of other person having an interest in registered property, or, in proper cases, the Register of
Deeds with the approval of the Commissioner of Land Registration, may apply by petition to the court upon
the ground that the registered interests of any description, whether vested, contingent, expectant or inchoate
appearing on the certificate, have terminated and ceased; or that new interest not appearing upon the
certificate have arisen or been created; or that an omission or error was made in entering a certificate or any
memorandum thereon, or, on any duplicate certificate; or that the same or any person on the certificate has
been changed; or that the registered owner has married, or, if registered as married, that the marriage has
been terminated and no right or interests of heirs or creditors will thereby be affected; or that a corporation
which owned registered land and has been dissolved has not convened the same within three years after its
dissolution; or upon any other reasonable ground; and the court may hear and determine the petition after
notice to all parties in interest, and may order the entry or cancellation of a new certificate, the entry or
cancellation of a memorandum upon a certificate, or grant any other relief upon such terms and conditions,
requiring security or bond if necessary, as it may consider proper; Provided, however, That this section shall
not be construed to give the court authority to reopen the judgment or decree of registration, and that nothing
shall be done or ordered by the court which shall impair the title or other interest of a purchaser holding a
certificate for value and in good faith, or his heirs and assigns, without his or their written consent. Where
the owner's duplicate certificate is not presented, a similar petition may be filed as provided in the preceding
section.
The foregoing clearly speaks of a court order prior to any erasure, alteration or amendment upon a certificate
of title.
In reversing its prior ruling, the Ombudsman cavalierly dismisses the fact of Espenesin already signing the
CCTs issued in ASB’s name as "only a part of the issuance process because the final step in the titling
procedure is indeed the release of the certificate of title."53 The Ombudsman further ruled:
Considering that prior to the release of titles, Espenesin merely rectified what was represented to this office
as error in the preparation of typing or the certificates, hence, it is wrong to subject him to an administrative
sanction. This is bolstered by the fact that, at the time of release (and perhaps even up to the present time),
there was no final determination yet from the land registration court as to who has a better right to the
property in question.54(Emphasis supplied).
This statement of the Ombudsman is virtually a declaration of Espenesin’s misconduct. It highlights
Espenesin’s awareness and knowledge that ASB and MICO are two different and separate entities, albeit
having entered into a joint venture for the building of "The Malayan Tower."
As Registrar of Deeds, Espenesin was duty bound to inquire and ascertain the reason for Serrano’s new
instruction on those specific set of CCTs and not just heed Serrano’s bidding. He heads the Office of
Register of Deeds which is constituted by law as "a public repository of records of instruments affecting
registered or unregistered lands x x x in the province or city wherein such office is situated." He should not
have so easily taken Serrano’s word that the amendment Serrano sought was to correct simple and
innocuous error. Espenesin could have then easily asked, as he is obliged to, for a contract or an
authenticated writing to ascertain which units and parking slots were really allotted for ASB and MICO. His
actions would then be based on what is documented and not merely by a lame claim of bona fides mistake.
Moreover, Espenesin was previously presented a MOA, and consulted this same MOA, in the initial
preparation and issuance of the 38 CCTs in ASB’s name. Certainly, a Registrar of Deeds who is required by
law to be a member of the legal profession,55 possesses common sense and prudence to ask for documents
on which to base his corrections. Reliance on the mere word of even the point person for the transaction,
smacks of gross negligence when all transactions with the Office of the Register of Deeds, involving as it
does registration of property, ought to be properly recorded and documented.
That the Office of the Register of Deeds requires documentation in the registration of property, whether as
an original or a subsequent registration, brooks no argument. Again, and it cannot be overlooked that,
Espenesin initially referred to a MOA albeit Serrano worked on the registration transaction for both ASB
and MICO. Subsequently, Serrano returns, bearing ostensible authority to transact even for ASB, and
Espenesin fails to ask for documentation for the correction Serrano sought to be made, and simply relies on
Serrano’s word.
We are baffled by the Registrar of Deeds’ failure to require documentation which would serve as his basis
for the correction. The amendment sought by Serrano was not a mere clerical change of registered name; it
was a substantial one, changing ownership of 38 units in The Malayan Tower from one entity, ASB, to
another, MICO. Even just at Serrano’s initial request for correction of the CCTs, a red flag should have gone
up for a Registrar of Deeds.1âwphi1
Espenesin splits hairs when he claims that it is "in the Registration Book where the prohibition to erase,
alter, or amend, without court order, applies." We disagree with Espenesin. Chapter IV on Certificate of
Title of Presidential Decree No. 1529,56 specifically Sections 40, 42 and 43 belie the claim of Espenesin:
Section 40. Entry of Original Certificate of Title. Upon receipt by the Register of Deeds of the original and
duplicate copies of the original certificate of title the same shall be entered in his record book and shall be
numbered, dated, signed and sealed by the Register of Deeds with the seal of his office. Said certificate of
title shall take effect upon the date of entry thereof. The Register of Deeds shall forthwith send notice by
mail to the registered owner that his owner's duplicate is ready for delivery to him upon payment of legal
fees.
Section 42. Registration Books. The original copy of the original certificate of title shall be filed in the
Registry of Deeds. The same shall be bound in consecutive order together with similar certificates of title
and shall constitute the registration book for titled properties.
Section 43. Transfer Certificate of Title. The subsequent certificate of title that may be issued by the
Register of Deeds pursuant to any voluntary or involuntary instrument relating to the same land shall be in
like form, entitled "Transfer Certificate of Title", and likewise issued in duplicate. The certificate shall show
the number of the next previous certificate covering the same land and also the fact that it was originally
registered, giving the record number, the number of the original certificate of title, and the volume and page
of the registration book in which the latter is found.
Recording or entry of the titles, whether an original or a subsequent transfer certificate of title in the record,
is simultaneous with the signing by the Register of Deeds. The signature on the certificate by the Registrar
of Deeds is accompanied by the dating, numbering and sealing of the certificate. All these are part of a
219
single registration process. Where there has been a completed entry in the Record Book, as in this case
where the Ombudsman found that "the signature of Espenesin is already affixed on the CCTs, and on its
face, it was explicitly declared that the titles have already been entered in the Registration Book of the
Register of Deeds of Pasig City on March 11, 2005 at 11:55 a.m.," the Register of Deeds can no longer
tamper with entries, specially the very name of the titleholder. The law says that the certificate of title shall
take effect upon the date of entry thereof.
To further drive home the point, as Registrar of Deeds, Espenesin knew full well that "there is no final
determination yet from the land registration court as to who has a better right to the property in question."
Espenesin’s attempt to minimize the significance of a Registrar of Deed’s signature on a CCT only
aggravates the lack of prudence in his action. The change in the titleholder in the CCTs from ASB to MICO
was an official documentation of a change of ownership. It definitely cannot be characterized as simple
error.
Grave misconduct, of which Espenesin has been charged, consists in a public officer’s deliberate violation
of a rule of law or standard of behavior. It is regarded as grave when the elements of corruption, clear intent
to violate the law, or flagrant disregard of established rules are present. 57 In particular, corruption as an
element of grave misconduct consists in the official’s unlawful and wrongful use of his station or character
to procure some benefit for himself or for another person, contrary to duty and the rights of others. 58
In sum, the actions of Espenesin clearly demonstrate a disregard of well-known legal rules.59 The penalty for
Grave Misconduct is dismissalfrom service with the accessory penalties of forfeiture of retirement benefits,
cancellation of eligibility, and perpetual disqualification from reemployment in the government service,
including government-owned or controlled corporation.60
WHEREFORE, the petition in G.R. No. 192685 is PARTIALLY GRANTED. The Resolution of the
Ombudsman dated 30 April 2008 in OMB-C-C-07-0444-J is REVERSED and SET ASIDE. The
Ombudsman is hereby directed to file the necessary Information for violation of Sections 3(a) and (e) of
Republic Act No. 3019 against public respondent Policarpio L. Espenesin and private respondent Francis
Serrano.
The petition in G.R. No. 199115 is GRANTED. The Decision of the Court of Appeals dated 28 September
2011 in CA-G.R. SP No. 113171 and the Order dated 13 July 2009 of the Ombudsman in OMB-C-A-07-
0474-J are REVERSED and SET ASIDE. Respondent Policarpio L. Espenesin is GUlLTY of Grave
Misconduct and we, thus, impose the penalty of DIMISSAL from service. However, due to his retirement
from the service, we order forfeiture of all his retirement pay and benefits.
SO ORDERED.
 SECOND DIVISION
G.R. No. 200804 January 22, 2014
A.L. ANG NETWORK, INC., Petitioner,
vs.
EMMA MONDEJAR, accompanied by her husband, EFREN MONDEJAR, Respondent.
RESOLUTION
PERLAS-BERNABE, J.:
This is a direct recourse1 to the Court from the Decision2 dated November 23, 2011and Order3 dated
February 16, 2012 of the Regional Trial Court of Bacolod City, Branch 45 (RTC) in RTC Case No. 11-
13833 which dismissed, on the ground of improper remedy, petitioner A.L. Ang Network, Inc.'s (petitioner)
petition for certiorari from the Decision4 dated June 10, 2011 of the Municipal Trial Court in Cities of
Bacolod City, Branch 4 (MTCC) in Civil Case No. SCC-1436, a small claims case for sum of money against
respondent Emma Mondejar (respondent).
The Facts
On March 23, 2011, petitioner filed a complaint5 for sum of money under the Rule of Procedure for Small
Claims Cases6 before the MTCC, seeking to collect from respondent the amount of ₱23,111.71 which
represented her unpaid water bills for the period June 1, 2002 to September 30, 2005. 7
Petitioner claimed that it was duly authorized to supply water to and collect payment therefor from the
homeowners of Regent Pearl Subdivision, one of whom is respondent who owns and occupies Lot 8, Block
3 of said subdivision. From June 1, 2002 until September 30, 2005, respondent and her family consumed a
total of 1,150 cubic meters (cu. m.) of water, which upon application of the agreed rate of ₱113.00 for every
10 cu. m. of water, plus an additional charge of ₱11.60 for every additional cu. m. of water, amounted to
₱28,580.09.8 However, respondent only paid the amount of ₱5,468.38, thus, leaving a balance of ₱23,111.71
which was left unpaid despite petitioner’s repeated demands.9
In defense, respondent contended that since April 1998 up to February 2003, she religiously paid petitioner
the agreed monthly flat rate of ₱75.00 for her water consumption. Notwithstanding their agreement that the
same would be adjusted only upon prior notice to the homeowners, petitioner unilaterally charged her
unreasonable and excessive adjustments (at the average of 40 cu. m. of water per month or 1.3 cu. m. of
water a day) far above the average daily water consumption for a household of only 3 persons. She also
questioned the propriety and/or basis of the aforesaid ₱23,111.71 claim. 10
In the interim, petitioner disconnected respondent’s water line for not paying the adjusted water charges
since March 2003 up to August 2005.11
The MTCC Ruling
On June 10, 2011, the MTCC rendered a Decision 12 holding that since petitioner was issued a Certificate of
Public Convenience (CPC)13 by the National Water Resources Board (NWRB) only on August 7, 2003,
then, it can only charge respondent the agreed flat rate of ₱75.00 per month prior thereto or the sum of
₱1,050.00 for the period June 1, 2002 to August 7, 2003. Thus, given that respondent had made total
payments equivalent to ₱1,685.99 for the same period, she should be considered to have fully paid
petitioner.14
The MTCC disregarded petitioner’s reliance on the Housing and Land Use Regulatory Board’s (HLURB)
Decision15dated August 17, 2000 in HLURB Case No. REM C6-00-001 entitled Nollie B. Apura, et al. v.
Dona Carmen I Subdivision, et al., as source of its authority to impose new water consumption rates for
water consumed from June 1, 2002 to August 7, 2003 in the absence of proof (a) that petitioner complied
with the directive to inform the HLURB of the result of its consultation with the concerned homeowners as
regards the rates to be charged, and (b) that the HLURB approved of the same. 16
Moreover, the MTCC noted that petitioner failed to submit evidence showing (a) the exact date when it
actually began imposing the NWRB approved rates; and (b) that the parties had a formal agreement
containing the terms and conditions thereof, without which it cannot establish with certainty respondent’s
obligation.17 Accordingly, it ruled that the earlier agreed rate of ₱75.00 per month should still be the basis
220
for respondent’s water consumption charges for the period August 8, 2003 to September 30, 2005. 18 Based
on petitioner’s computation, respondent had only paid ₱300.00 of her ₱1,500.00 obligation for said period.
Thus, it ordered respondent to pay petitioner the balance thereof, equivalent to ₱1,200.00 with legal interest
at the rate of 6% per annum from date of receipt of the extrajudicial demand on October 14, 2010 until fully
paid.19
Aggrieved, petitioner filed a petition for certiorari20 under Rule 65 of the Rules of Court before the RTC,
ascribing grave abuse of discretion on the part of the MTCC in finding that it (petitioner) failed to establish
with certainty respondent’s obligation, and in not ordering the latter to pay the full amount sought to be
collected.
The RTC Ruling
On November 23, 2011, the RTC issued a Decision 21 dismissing the petition for certiorari, finding that the
said petition was only filed to circumvent the non-appealable nature of small claims cases as provided under
Section 2322of the Rule of Procedure on Small Claims Cases. To this end, the RTC ruled that it cannot
supplant the decision of the MTCC with another decision directing respondent to pay petitioner a bigger
sum than that which has been awarded.
Petitioner moved for reconsideration23 but was denied in an Order24 dated February 16, 2012, hence, the
instant petition.
The Issue Before the Court
The sole issue in this case is whether or not the RTC erred in dismissing petitioner’s recourse under Rule 65
of the Rules of Court assailing the propriety of the MTCC Decision in the subject small claims case.
The Court’s Ruling
The petition is meritorious.
Section 23 of the Rule of Procedure for Small Claims Cases states that:
SEC. 23. Decision. — After the hearing, the court shall render its decision on the same day, based on the
facts established by the evidence (Form 13-SCC). The decision shall immediately be entered by the Clerk of
Court in the court docket for civil cases and a copy thereof forthwith served on the parties.
The decision shall be final and unappealable.
Considering the final nature of a small claims case decision under the above-stated rule, the remedy of
appeal is not allowed, and the prevailing party may, thus, immediately move for its
execution.25 Nevertheless, the proscription on appeals in small claims cases, similar to other proceedings
where appeal is not an available remedy,26 does not preclude the aggrieved party from filing a petition for
certiorari under Rule 65 of the Rules of Court. This general rule has been enunciated in the case of Okada v.
Security Pacific Assurance Corporation,27 wherein it was held that:
In a long line of cases, the Court has consistently ruled that "the extraordinary writ of certiorari is always
available where there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of
law." In Jaca v. Davao Lumber Co., the Court ruled:
x x x 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 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.
This ruling was reiterated in Conti v. Court of Appeals:
Truly, an essential requisite for the availability of the extraordinary remedies under the Rules is an absence
of an appeal nor any "plain, speedy and adequate remedy" in the ordinary course of law, one which has been
so defined as a "remedy which (would) equally (be) beneficial, speedy and sufficient not merely a remedy
which at some time in the future will bring about a revival of the judgment x x x complained of in the
certiorari proceeding, but a remedy which will promptly relieve the petitioner from the injurious effects of
that judgment and the acts of the inferior court or tribunal" concerned. x x x (Emphasis supplied)
In this relation, it may not be amiss to placate the RTC’s apprehension that respondent’s recourse before it
(was only filed to circumvent the non-appealable nature of [small claims cases], because it asks [the court]
to supplant the decision of the lower [c]ourt with another decision directing the private respondent to pay the
petitioner a bigger sum than what has been awarded."28 Verily, a petition for certiorari, unlike an appeal, is
an original action29 designed to correct only errors of jurisdiction and not of judgment. Owing to its nature, it
is therefore incumbent upon petitioner to establish that jurisdictional errors tainted the MTCC Decision. The
RTC, in turn, could either grant or dismiss the petition based on an evaluation of whether or not the MTCC
gravely abused its discretion by capriciously, whimsically, or arbitrarily disregarding evidence that is
material to the controversy.30
In view of the foregoing, the Court thus finds that petitioner correctly availed of the remedy of certiorari to
assail the propriety of the MTCC Decision in the subject small claims case, contrary to the RTC’s ruling.
Likewise, the Court finds that petitioner filed the said petition before the proper forum (i.e., the
RTC).1âwphi1 To be sure, the Court, the Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue a writ of certiorari.31Such concurrence of jurisdiction, however, does not give a party
unbridled freedom to choose the venue of his action lest he ran afoul of the doctrine of hierarchy of courts.
Instead, a becoming regard for judicial hierarchy dictates that petitions for the issuance of writs of certiorari
against first level courts should be filed with the Regional Trial Court, and those against the latter, with the
Court of Appeals, before resort may be had before the Court. 32 This procedure is also in consonance with
Section 4, Rule 65 of the Rules of Court.33
Hence, considering that small claims cases are exclusively within the jurisdiction of the Metropolitan Trial
Courts, Municipal Trial Courts in Cities, Municipal Trial Courts, and Municipal Circuit Trial
Courts,34 certiorari petitions assailing its dispositions should be filed before their corresponding Regional
Trial Courts. This petitioner complied with when it instituted its petition for certiorari before the RTC
which, as previously mentioned, has jurisdiction over the same. In fine, the RTC erred in dismissing the said
petition on the ground that it was an improper remedy, and, as such, RTC Case No. 11-13833 must be
reinstated and remanded thereto for its proper disposition.
WHEREFORE, the petition is GRANTED. The Decision dated November 23, 2011 and Resolution dated
February 16, 2012 of the Regional Trial Court of Bacolod City, Branch 45 are REVERSED and SET
ASIDE. RTC Case No. 11-13833 is hereby REINSTATED and the court a quo is ordered to resolve the
same with dispatch.
SO ORDERED.

221
 FIRST DIVISION
G.R. No. 190566 December 11, 2013
MARK JEROME S. MAGLALANG, Petitioner,
vs.
PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), as represented by its
incumbent Chairman EFRAIM GENUINO, Respondent.
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition1 for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
as amended, seeking the reversal of the Resolution2 dated September 30, 2009 issued by the Court of
Appeals (CA) in CA"".G.R. SP No. 110048, which outrightly dismissed the petition for certiorari filed by
herein petitioner Mark Jerome S. Maglalang (petitioner). Also assailed is the appellate court's
Resolution3 dated November 26, 2009 which denied petitioner's motion for reconsideration.
The facts follow.
Petitioner was a teller at the Casino Filipino, Angeles City Branch, Angeles City, which was operated by
respondent Philippine Amusement and Gaming Corporation (PAGCOR), a government-owned or controlled
corporation existing by virtue of Presidential Decree (P.D.) No. 1869.4
Petitioner alleged that in the afternoon of December 13, 2008, while he was performing his functions as
teller, a lady customer identified later as one Cecilia Nakasato5 (Cecilia) approached him in his booth and
handed to him an undetermined amount of cash consisting of mixed ₱1,000.00 and ₱500.00 bills. There
were 45 ₱1,000.00 and ten ₱500.00 bills for the total amount of ₱50,000.00. Following casino procedure,
petitioner laid the bills on the spreading board. However, he erroneously spread the bills into only four
clusters instead of five clusters worth ₱10,000.00 per cluster. He then placed markers for ₱10,000.00 each
cluster of cash and declared the total amount of ₱40,000.00 to Cecilia. Perplexed, Cecilia asked petitioner
why the latter only dished out ₱40,000.00. She then pointed to the first cluster of bills and requested
petitioner to check the first cluster which she observed to be thicker than the others. Petitioner performed a
recount and found that the said cluster contained 20 pieces of ₱1,000.00 bills. Petitioner apologized to
Cecilia and rectified the error by declaring the full and correct amount handed to him by the latter.
Petitioner, however, averred that Cecilia accused him of trying to shortchange her and that petitioner tried to
deliberately fool her of her money. Petitioner tried to explain, but Cecilia allegedly continued to berate and
curse him. To ease the tension, petitioner was asked to take a break. After ten minutes, petitioner returned to
his booth. However, Cecilia allegedly showed up and continued to berate petitioner. As a result, the two of
them were invited to the casino’s Internal Security Office in order to air their respective sides. Thereafter,
petitioner was required to file an Incident Report which he submitted on the same day of the incident. 6
On January 8, 2009, petitioner received a Memorandum7 issued by the casino’s Branch Manager, Alexander
Ozaeta, informing him that he was being charged with Discourtesy towards a casino customer and directing
him to explain within 72 hours upon receipt of the memorandum why he should not be sanctioned or
dismissed. In compliance therewith, petitioner submitted a letter-explanation8 dated January 10, 2009.
On March 31, 2009, petitioner received another Memorandum9 dated March 19, 2009, stating that the Board
of Directors of PAGCOR found him guilty of Discourtesy towards a casino customer and imposed on him a
30-day suspension for this first offense. Aggrieved, on April 2, 2009, petitioner filed a Motion for
Reconsideration10 seeking a reversal of the board’s decision and further prayed in the alternative that if he is
indeed found guilty as charged, the penalty be only a reprimand as it is the appropriate penalty. During the
pendency of said motion, petitioner also filed a Motion for Production 11 dated April 20, 2009, praying that
he be furnished with copies of documents relative to the case including the recommendation of the
investigating committee and the Decision/Resolution of the Board supposedly containing the latter’s factual
findings. In a letter-reply12 dated June 2, 2009, one Atty. Carlos R. Bautista, Jr. who did not indicate his
authority therein to represent PAGCOR, denied the said motion. Petitioner received said letter-reply on June
17, 2009.
222
Subsequently, on June 18, 2009, PAGCOR issued a Memorandum 13 dated June 18, 2009 practically
reiterating the contents of its March 19, 2009 Memorandum. Attached therewith is another
Memorandum14 dated June 8, 2009 issued by PAGCOR’s Assistant Vice President for Human Resource and
Development, Atty. Lizette F. Mortel, informing petitioner that the Board of Directors in its meeting on May
13, 2009 resolved to deny his appeal for reconsideration for lack of merit. Petitioner received said
memoranda on the same date of June 18, 2009.
On August 17, 2009, petitioner filed a petition15 for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure, as amended, before the CA, averring that there is no evidence, much less factual and legal basis
to support the finding of guilt against him. Moreover, petitioner ascribed grave abuse of discretion
amounting to lack or excess of jurisdiction to the acts of PAGCOR in adjudging him guilty of the charge, in
failing to observe the proper procedure in the rendition of its decision and in imposing the harsh penalty of a
30-day suspension. Justifying his recourse to the CA, petitioner explained that he did not appeal to the Civil
Service Commission (CSC) because the penalty imposed on him was only a 30-day suspension which is not
within the CSC’s appellate jurisdiction. He also claimed that discourtesy in the performance of official
duties is classified as a light offense which is punishable only by reprimand.
In its assailed Resolution16 dated September 30, 2009, the CA outrightly dismissed the petition for certiorari
for being premature as petitioner failed to exhaust administrative remedies before seeking recourse from the
CA. Invoking Section 2(1), Article IX-B of the 1987 Constitution,17 the CA held that the CSC has
jurisdiction over issues involving the employer-employee relationship in all branches, subdivisions,
instrumentalities and agencies of the Government, including government-owned or controlled corporations
with original charters such as PAGCOR. Petitioner filed his Motion for Reconsideration 18 which the CA
denied in the assailed Resolution19 dated November 26, 2009. In denying the said motion, the CA relied on
this Court’s ruling in Duty Free Philippines v. Mojica20 citing Philippine Amusement and Gaming Corp. v.
CA,21 where this Court held as follows:
It is now settled that, conformably to Article IX-B, Section 2(1), [of the 1987 Constitution] government-
owned or controlled corporations shall be considered part of the Civil Service only if they have original
charters, as distinguished from those created under general law.
PAGCOR belongs to the Civil Service because it was created directly by PD 1869 on July 11, 1983.
Consequently, controversies concerning the relations of the employee with the management of PAGCOR
should come under the jurisdiction of the Merit System Protection Board and the Civil Service Commission,
conformably to the Administrative Code of 1987.
Section 16(2) of the said Code vest[s] in the Merit System Protection Board the power inter alia to:
a) Hear and decide on appeal administrative cases involving officials and employees of the Civil Service. Its
decision shall be final except those involving dismissal or separation from the service which may be
appealed to the Commission.
Hence, this petition where petitioner argues that the CA committed grave and substantial error of judgment
1. IN OUTRIGHTLY DISMISSING THE PETITION FOR CERTIORARI FILED BY
PETITIONER AND IN DENYING THE LATTER’S MOTION FOR RECONSIDERATION[;]
2. IN RULING THAT THE CIVIL SERVICE COMMISSION HAS APPELLATE
JURISDICTION OVER THE SUSPENSION OF THE PETITIONER DESPITE THE FACT
THAT THE PENALTY INVOLVED IS NOT MORE THAN THIRTY (30) DAYS[;]
3. IN RESOLVING THE PETITION FOR CERTIORARI FILED BY PETITIONER IN A
MANNER WHICH IS UTTERLY CONTRARY TO LAW AND JURISPRUDENCE[;]
4. IN UNJUSTIFIABLY REFUSING TO RENDER A DECISION AS TO THE PROPRIETY OR
VALIDITY OF THE SUSPENSION OF THE PETITIONER BY THE RESPONDENT[;]
5. IN UNDULY REFUSING TO RENDER A DECISION DECLARING THAT THE ASSAILED
DECISIONS/RESOLUTIONS OF THE RESPONDENT ARE NOT SUPPORTED BY THE
EVIDENCE ON RECORD[; AND]
 6. IN UNJUSTIFIABLY REFUSING TO RENDER A DECISION DECLARING THAT THE
ASSAILED DECISIONS/RESOLUTIONS OF RESPONDENT WERE ISSUED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION. 22
Petitioner claims that the CA clearly overlooked the applicable laws and jurisprudence that provide that
when the penalty involved in an administrative case is suspension for not more than 30 days, the CSC has no
appellate jurisdiction over the said administrative case. As authority, petitioner invokes our ruling in
Geronga v. Hon. Varela23which cited Section 47,24 Chapter 1, Subtitle A, Title I, Book V of Executive Order
(E.O.) No. 292 otherwise known as The Administrative Code of 1987. Said Section 47 provides that the
CSC may entertain appeals only, among others, from a penalty of suspension of more than 30 days.
Petitioner asserts that his case, involving a 30-day suspension penalty, is not appealable to the CSC. Thus,
he submits that his case was properly brought before the CA via a petition for certiorari. 25
On the other hand, PAGCOR alleges that petitioner intentionally omitted relevant matters in his statement of
facts. PAGCOR essentially claims that petitioner refused to apologize to Cecilia; that he treated Cecilia’s
complaint with arrogance; and that before taking the aforementioned 10-minute break, petitioner slammed
the cash to the counter window in giving it back to the customer. PAGCOR argues that the instant petition
raises questions of fact which are not reviewable in a petition for review on certiorari. PAGCOR maintains
that the CA’s ruling was in accordance with law and jurisprudence. Moreover, PAGCOR counters that
petitioner’s remedy of appeal is limited as Section 37 of the Revised Uniform Rules on Administrative
Cases in the Civil Service provides that a decision rendered by heads of agencies whereby a penalty of
suspension for not more than 30 days is imposed shall be final and executory. PAGCOR opines that such
intent of limiting appeals over such minor offenses is elucidated in the Concurring Opinion of former Chief
Justice Reynato S. Puno in CSC v. Dacoycoy26 and based on the basic premise that appeal is merely a
statutory privilege. Lastly, PAGCOR submits that the 30-day suspension meted on petitioner is justified
under its own Code of Discipline.27 Prescinding from the foregoing, the sole question for resolution is: Was
the CA correct in outrightly dismissing the petition for certiorari filed before it on the ground of non-
exhaustion of administrative remedies?
We resolve the question in the negative.
Our ruling in Public Hearing Committee of the Laguna Lake Development Authority v. SM Prime Holdings,
Inc.28 on the doctrine of exhaustion of administrative remedies is instructive, to wit:
Under the doctrine of exhaustion of administrative remedies, before a party is allowed to seek the
intervention of the court, he or she should have availed himself or herself of all the means of administrative
processes afforded him or her. Hence, if resort to a remedy within the administrative machinery can still be
made by giving the administrative officer concerned every opportunity to decide on a matter that comes
within his or her jurisdiction, then such remedy should be exhausted first before the court's judicial power
can be sought. The premature invocation of the intervention of the court is fatal to one’s cause of action. The
doctrine of exhaustion of administrative remedies is based on practical and legal reasons. The availment of
administrative remedy entails lesser expenses and provides for a speedier disposition of controversies.
Furthermore, the courts of justice, for reasons of comity and convenience, will shy away from a dispute until
the system of administrative redress has been completed and complied with, so as to give the administrative
agency concerned every opportunity to correct its error and dispose of the case.
However, the doctrine of exhaustion of administrative remedies is not absolute as it admits of the following
exceptions:
(1) when there is a violation of due process; (2) when the issue involved is purely a legal question; (3) when
the administrative action is patently illegal amounting to lack or excess of jurisdiction; (4) when there is
estoppel on the part of the administrative agency concerned; (5) when there is irreparable injury; (6) when
the respondent is a department secretary whose acts as an alter ego of the President bears the implied and
assumed approval of the latter; (7) when to require exhaustion of administrative remedies would be
unreasonable; (8) when it would amount to a nullification of a claim; (9) when the subject matter is a private
land in land case proceedings; (10) when the rule does not provide a plain, speedy and adequate remedy, and
223
(11) when there are circumstances indicating the urgency of judicial intervention, and unreasonable delay
would greatly prejudice the complainant; (12) where no administrative review is provided by law; (13)
where the rule of qualified political agency applies and (14) where the issue of non-exhaustion of
administrative remedies has been rendered moot.29
The case before us falls squarely under exception number 12 since the law per se provides no administrative
review for administrative cases whereby an employee like petitioner is covered by Civil Service law, rules
and regulations and penalized with a suspension for not more than 30 days.
Section 37 (a) and (b) of P.D. No. 807, otherwise known as the Civil Service Decree of the Philippines,
provides for the unavailability of any appeal:
Section 37. Disciplinary Jurisdiction.
(a) The Commission shall decide upon appeal all administrative disciplinary cases involving the
imposition of a penalty of suspension for more than thirty days, or fine in an amount exceeding
thirty days’ salary, demotion in rank or salary or transfer, removal or dismissal from Office. A
complaint may be filed directly with the Commission by a private citizen against a government
official or employee in which case it may hear and decide the case or it may deputize any
department or agency or official or group of officials to conduct the investigation. The results of
the investigation shall be submitted to the Commission with recommendation as to the penalty to
be imposed or other action to be taken.
(b) The heads of departments, agencies and instrumentalities, provinces, cities and municipalities
shall have jurisdiction to investigate and decide matters involving disciplinary action against
officers and employees under their jurisdiction. Their decisions shall be final in case the penalty
imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty days’
salary. In case the decision rendered by a bureau or office head is appealable to the Commission,
the same may be initially appealed to the department and finally to the Commission and pending
appeal, the same shall be executory except when the penalty is removal, in which case the same
shall be executory only after confirmation by the department head. (Emphasis supplied.)
Similar provisions are reiterated in the aforequoted Section 47 30 of E.O. No. 292 essentially providing that
cases of this sort are not appealable to the CSC. Correlatively, we are not unaware of the Concurring
Opinion of then Chief Justice Puno in CSC v. Dacoycoy,31 where he opined, to wit:
In truth, the doctrine barring appeal is not categorically sanctioned by the Civil Service Law.1âwphi1 For
what the law declares as "final" are decisions of heads of agencies involving suspension for not more than
thirty (30) days or fine in an amount not exceeding thirty (30) days salary. But there is a clear policy reason
for declaring these decisions final. These decisions involve minor offenses. They are numerous for they are
the usual offenses committed by government officials and employees. To allow their multiple level appeal
will doubtless overburden the quasijudicial machinery of our administrative system and defeat the
expectation of fast and efficient action from these administrative agencies. Nepotism, however, is not a petty
offense. Its deleterious effect on government cannot be over-emphasized. And it is a stubborn evil. The
objective should be to eliminate nepotic acts, hence, erroneous decisions allowing nepotism cannot be given
immunity from review, especially judicial review. It is thus non sequitur to contend that since some decisions
exonerating public officials from minor offenses can not be appealed, ergo, even a decision acquitting a
government official from a major offense like nepotism cannot also be appealed.
Nevertheless, decisions of administrative agencies which are declared final and unappealable by law are still
subject to judicial review. In Republic of the Phils. v. Francisco,32 we held:
Since the decision of the Ombudsman suspending respondents for one (1) month is final and unappealable, it
follows that the CA had no appellate jurisdiction to review, rectify or reverse the same. The Ombudsman
was not estopped from asserting in this Court that the CA had no appellate jurisdiction to review and reverse
the decision of the Ombudsman via petition for review under Rule 43 of the Rules of Court. This is not to
say that decisions of the Ombudsman cannot be questioned. Decisions of administrative or quasi-
administrative agencies which are declared by law final and unappealable are subject to judicial review if
they fail the test of arbitrariness, or upon proof of gross abuse of discretion, fraud or error of law. When such
administrative or quasi-judicial bodies grossly misappreciate evidence of such nature as to compel a
contrary conclusion, the Court will not hesitate to reverse the factual findings. Thus, the decision of the
Ombudsman may be reviewed, modified or reversed via petition for certiorari under Rule 65 of the Rules of
Court, on a finding that it had no jurisdiction over the complaint, or of grave abuse of discretion amounting
to excess or lack of jurisdiction.It bears stressing that the judicial recourse petitioner availed of in this case
before the CA is a special civil action for certiorari ascribing grave abuse of discretion, amounting to lack or
excess of jurisdiction on the part of PAGCOR, not an appeal. Suffice it to state that an appeal and a special
civil action such as certiorari under Rule 65 are entirely distinct and separate from each other. One cannot
file petition for certiorari under Rule 65 of the Rules where appeal is available, even if the ground availed of
is grave abuse of discretion. A special civil action for certiorari under Rule 65 lies only when there is no
appeal, or plain, speedy and adequate remedy in the ordinary course of law. Certiorari cannot be allowed
when a party to a case fails to appeal a judgment despite the availability of that remedy, as the same should
not be a substitute for the lost remedy of appeal. The remedies of appeal and certiorari are mutually
exclusive and not alternative or successive.33
In sum, there being no appeal or any plain, speedy, and adequate remedy in the ordinary course of law in
view of petitioner's allegation that P AGCOR has acted without or in excess of jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, the CA's outright dismissal of the petition for
certiorari on the basis of non-exhaustion of administrative remedies is bereft of any legal standing and
should therefore be set aside.
Finally, as a rule, a petition for certiorari under Rule 65 is valid only when the question involved is an error
of jurisdiction, or when there is grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of the court or tribunals exercising quasi-judicial functions. Hence, courts exercising certiorari
jurisdiction should refrain from reviewing factual assessments of the respondent court or agency.
Occasionally, however, they are constrained to wade into factual matters when the evidence on record does
not support those factual findings; or when too much is concluded, inferred or deduced from the bare or
incomplete facts appearing on record.34 Considering the circumstances and since this Court is not a trier of
facts, 35 remand of this case to the CA for its judicious resolution is in order.
WHEREFORE, the petition is PARTLY GRANTED. The Resolutions dated September 30, 2009 and
November 26, 2009 of the Court of Appeals in CA-G.R. SP No. 110048 are hereby REVERSED and SET
ASIDE. The instant case is REMANDED to the Court of Appeals for further proceedings.
No pronouncement as to costs.
SO ORDERED.

224
 THIRD DIVISION
G.R. No. 208290 December 11, 2013
PEOPLE OF THE PHILIPPINES, Petitioner,
vs.
THE HONORABLE JUANITO C. CASTANEDA, JR., HONORABLE CAESAR A. CASANOVA,
HONORABLE CIELITO N. MINDARO-GRULLA, AS ASSOCIATE JUSTICES OF THE SPECIAL
SECOND DIVISION, COURT OF TAX APPEALS; and MYRNA M. GARCIA AND CUSTODIO
MENDOZA VESTIDAS, JR., Respondents.
RESOLUTION
PER CURIAM:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking to review the March 26,
20131 and May 15, 20132 Resolutions of the Court of Tax Appeals (CTA) in CTA Crim. Case No. 0-285,
ordering the dismissal of the case against the private respondents for violation of Section 3602 3 in relation to
Sections 2503 and 2530 (f) (i) and 1, (3) (4) and (5) of the Tariff and Customs Codeof the Philippines, as
amended, on the ground of insufficiency of evidence.
The antecedentsas culled from the records:
Private respondents Myrna M. Garcia (Garcia) and Custodio Mendoza Vestidas, Jr.(VestidasJr.)were
charged before the CTA under an Information which reads:
That on or about November 5, 2011, or prior or subsequent thereto, in the City of Manila, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused Myrna M. Garcia and Custodio
Mendoza Vestidas, Jr. as owner/proprietress and broker of Plinth Enterprise respectively, conspiring and
confederating with each other, with intent to defraud the government, did then and there willfully,
unlawfully and fraudulently import into the Port of Manila, 858 cartons of 17,160 pieces of Anti-Virus
Software Kaspersky Internet Security Premium 2012, subject to customs duties,by misdeclaration under
Import Entry No. C-181011 and Bill of Lading No. PFCMAN1715, filed with the Bureau of Customs
(BOC),covering One Forty Footer (1x40) container van shipment bearing No. KKFU7195683 which was
falsely declared to contain 40 pallets/1,690 cartons of CD kit cleaner and plastic CD case, said imported
items having customs duties amounting to Three Million Three Hundred Forty One Thousand Two Hundred
Forty Five Pesos (Php 3,341,245) of which only the amount of One Hundred Thousand Three Hundred
Sixty Two Pesos (Php100,362) was paid, in violation of the above-captioned law, and to the prejudice and
damage of the Government in the amount of Three Million Two Hundred Forty Thousand Eight Hundred
Eighty Three Pesos (Php3,240,883).4
In a hearing held on August 1, 2012, Garcia and VestidasJr.pleaded "Not Guilty" to the aforementioned
charge. Thereafter, a preliminary conference was held on September 5, 2012 followed by thepre-trial on
September 13, 2012. Both the prosecution and the defense agreed to adopt the joint stipulations of facts and
issues entered in the course of the preliminary conference.
Thereafter, trial ensued.
The prosecution presented a number of witnesses whoessentially observed 5 the physical examination of
Container Van No. KKFU 7195638 conducted 6 by the Bureau of Customs (BOC) and explained7 the process
of electronic filing under the Electronic to Mobile (E2M) Customs Systems of the BOC and the alleged
misdeclared goods therein.
Subsequent to the presentation of witnesses, the prosecution filed its Formal Offer of Evidence on December
10, 2012.
On January 15, 2013, Garcia and Vestidas, Jr. filed their Omnibus Motion to File Demurrer to Evidence
with Leave of Court to Cancel Hearing Scheduled on January 21, 2013,whichwas grantedby the CTA.
Thereafter, they filed theDemurrer to Evidence, dated January 13, 2012, claimingthat the prosecution failed
to prove their guilt beyond reasonable doubt for the following reasons:
a)The pieces of documentary evidence submitted by the prosecution were inadmissible incourt;
225
b)The object evidence consisting of the allegedly misdeclared goods were not presented as
evidence; and
c)None of the witnesses for the prosecution made a positive identification of the two accused as the
ones responsible for the supposed misdeclaration.
Despite opposition, the CTA dismissed the caseagainst Garcia and Vestidas Jr.in its March 26, 2013
Resolution, for failure of the prosecution to establish theirguilt beyond reasonable doubt.
According to the CTA, "no proof whatsoever was presented by the prosecution showing that the certified
true copies of the public documents offered in evidence against both accused were in fact issued by thelegal
custodians."8 It cited Section 26, Rule 132 of the Revised Rules of Court, whichprovidesthat"when the
original of a document is a public record, it should not generally be removed from the office or place in
which it is kept."9 As stated in Section 7, Rule 130,10 its contents may be proven using secondary evidence
and such evidence may pertain to the certified true copy of the original document issued by the public
officer in custody thereof.Hence, the CTA wrotethat the certified true copiesof the public documents offered
in evidence should have been presented in court.
Anent its offer of private documents,11 the prosecution likewise failed to comply with Section 27, Rule 132
of the Rules of Court, which reads, "[a]n authorized public record of a private document may be proved by
the original record, or by a copy thereof, attested by the legal custodian of the record, with an appropriate
certificate that such officer has the custody." Considering that the private documents were submitted and
filed with the BOC, the same became part of public records. Again, the records show that the prosecution
failed to present the certified true copies of thedocuments.
The CTA noted that,in its Opposition to the Demurrer,the prosecution even admitted that none of their
witnesses ever positively identified the accused in open court and that the alleged misdeclared goods were
not competently and properly identified in court by any of the prosecution witnesses.
The prosecution filed its motion for reconsideration, but it was deniedby the CTAin its May 15, 2013
Resolution, stressing, among others, that to grant it would place the accused in double jeopardy. 12
On July 24, 2013, the Run After the Smugglers (RATS) Group, Revenue Collection Monitoring Group
(RCMG), as counsel for the BOC, received a copy of the July 15, 2013 Resolution of the CTA ordering the
entry of judgment in the case.
Hence,this petition for certiorari, ascribing grave abuse of discretion on the part of theCTA when in ruled
that: 1) the pieces of documentary evidence submitted by the prosecution were inadmissible in evidence; 2)
the object evidence consisting of the alleged misdeclared goods were not presented as evidence; and 3) the
witnesses failed to positively identifythe accused as responsible forthe misdeclaration of goods.
The Court agrees with the disposition of the CTA.
At the outset, it should be noted that the petition was filed beyond the reglementary periodfor the
filingthereof under Rule 65. The petition itself statedthat a copy of the May 15, 2013 Resolution was
received by the BOC two (2) days after its promulgation, or on May 17, 2013. Nonetheless, the RATS was
only alerted by the developments in the case on July 24, 2013, when Atty. Danilo M. Campos Jr. (Atty.
Campos) received the July 15, 2013 Resolution of the CTA ordering the entry of judgment in the case,
considering that no appeal was taken by any of the parties. According toAtty. Campos, it was only on that
occasion when he discovered the May 15, 2013 Resolution of the CTA.Thus, it was prayed that the
petitionbe given due course despite its late filing.
This belated filing cannot be countenanced by the Court.
Section 4, Rule 65 of the 1997 Rules of Civil Procedureis explicit in stating thatcertiorarishould be instituted
within a period of 60 days from notice of the judgment, orderor resolution sought to be assailed. The 60-day
period is inextendible to avoid any unreasonable delay that would violate the constitutional rights of parties
to a speedy disposition of their case.13 While there are recognized exceptions14 to such strict observance,
there should be an effort on the part of the party invoking liberality to advance a reasonable or meritorious
explanation for his/her failure to comply with the rules. 15
In the case at bench, no convincing justification for the belated filing of the petition was advanced to warrant SO ORDERED.
the relaxation of the Rules.Notably, the records show that the petition was filedonly on August 12, 2013, or
almost a month late from the due date which fell on July 16, 2013. To excuse this grave procedural lapse
will not only be unfairto the other party, but it will also sanction a seeming rudimentary attempt to
circumvent standing rules of procedure. Suffice it to say, the reasons proffered by the petitioner do not carry
even a tinge of merit that would deserve leniency.
The late filing of the petition was borne out of the petitioner’s failure to monitor incoming court processes
that neededto be addressed by the office. Clearly, this is an admission of inefficiency, if not lack of zeal, on
the part of an office tasked toeffectively curb smuggling activities which rob the government of millions of
revenue every year.
The display of patent violations of even the elementary rules leads the Court to suspectthat the case against
Garcia and Vestidas Jr. was doomed by designfrom the start. The failure to present the certified true copies
of documentary evidence; the failure to competently and properly identify the misdeclared goods; the failure
to identify the accused in court; and,worse, the failure to file this petition on time challenging a judgment of
acquittal, are tell-tale signs ofa reluctantand subduedattitude in pursuing the case. This stance taken by the
lawyers in government service rouses the Court’s vigilance against inefficiency in the administration of
justice. Verily, the lawyersrepresenting the offices under the executive branchshould be reminded that
theystill remain as officers of the courtfrom whom a high sense of competence and fervor is expected. The
Courtwill not close its eyes to this sense of apathy in RATS lawyers, lest the government’s goal of revenue
enhancement continues to suffer the blows of smuggling and similar activities.
Even the error committed by the RATS in filing a motion for reconsideration with the CTA displays gross
ignorance as to the effects of an acquittal in a criminal case and the constitutional proscription on double
jeopardy. Had the RATS been eager and keen in prosecuting the respondents, it would have, in the first
place, presented its evidence with the CTA in strict compliance with the Rules.
In any case, even if the Court decides to suspend the rules and permit this recourse, the end result would
remain the same. While a judgment of acquittal in a criminal case may be assailed in a petition for certiorari
under Rule 65 of the Rules of Court,it must be shown that there was grave abuse of discretion amounting to
lack or excess of jurisdiction or a denial of due process.In this case, a perusal of the challenged resolutions
ofthe CTAdoes not disclose any indication of grave abuse of discretion on its partor denial of due
process.The records are replete with indicators that the petitioner actively participated during the trial and, in
fact, presented its offer of evidence and opposed the demurrer.1âwphi1
Grave abuse of discretion is defined as capricious or whimsical exercise of judgment as is equivalent to lack
of jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of a positive
duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where
the power is exercised in an arbitrary and despotic manner by reason of passion and hostility. 16 Here, the
subject resolutions of the CTA have been issued in accordance with the rules on evidence and existing
jurisprudence.
On a final note, the Court deems it proper to remind the lawyers in the Bureau of Customs that the canons
embodied in the Code of Professional Responsibility equally apply to lawyers in government service in the
discharge of their official tasks. 17 Thus, RA TS lawyers should exert every effort and consider it their duty
to assist in the speedy and efficient administration of justice. 18
WHEREFORE, the petition is DISMISSED and the assailed March 26, 2013 and May 15, 2013 Resolutions
of the Court of Tax Appeals are AFFIRMED.
The Office of the Ombudsman is hereby ordered to conduct an investigation for possible criminal or
administrative offenses committed by the Run After the Smugglers (RA TS) Group, Revenue Collection
Monitoring Group (RCMG), Bureau of Customs, relative to the filing and handling of the subject complaint
for violations of the Tariff and Customs Code of the Philippines.
Let copies of this resolution be furnished the Office of the President, the Secretary of Finance, the Collector
of Customs, and the Office of the Ombudsman for their guidance and appropriate action.

226
 EN BANC
G.R. No. 110280 October 12, 1993
UNIVERSITY OF THE PHILIPPINES BOARD OF REGENTS and DR. OLIVIA C. CAOILI in her
capacity as Secretary of the Board, petitioners,
vs.
HON. ELSIE LIGOT-TELAN in her capacity as Presiding Judge of Branch 87, Regional Trial Court of
Quezon City and RAMON P. NADAL, respondents.
U.P. Office of Legal Services for petitioners.
Bonifacio A. Alentajon for private respondent.
ROMERO, J.:
In an effort to make the University of the Philippines (U.P.) truly the university of the people, the U.P.
administration conceptualized and implemented the socialized scheme of tuition fee payments through the
Socialized Tuition Fee and Assistance Program (STFAP), popularly known as the "Iskolar ng Bayan"
program. Spawned by the public clamor to overcome what was perceived as the sharpening elitist profile of
the U.P studentry, the STFAP aspired to expand the coverage of government educational subsidies so as to
include the deserving in the lower rungs of the socio-economic ladder.
After broad consultations with the various university constituencies by U.P. President Jose V. Abueva, the
U.P. Board of Regents issued on April 28, 1988 a Resolution establishing the STFAP. A year later, it was
granted official recognition when the Congress of the Philippines allocated a portion of the National Budget
for the implementation of the program.
In the interest of democratizing admission to the State University, all students are entitled to apply for
STFAP benefits which include reduction in fees, living and book subsidies and student assistantships which
give undergraduate students the opportunity to earn P12.00 per hour by working for the University.
Applicants are required to accomplish a questionnaire where, among others, they state the amount and
source of the annual income of the family, their real and personal properties and special circumstances from
which the University may evaluate their financial status and need on the basis of which they are categorized
into brackets. At the end the application form, the student applicant, as well as his parent, signs a sworn
statement, as follows:
Statement of the Student
I hereby certify, upon my honor, that all the data and information which I have furnished
are accurate and complete. I understand that any willful misinformation and/or
withholding of information will automatically disqualify me from receiving any financial
assistance or subsidy, and may serve as ground for my expulsion from the
University. Furthermore, is such misinformation and/or withholding of information on
my part is discovered after I have been awarded tuition scholarship or any form of
financial assistance, I will be required to reimburse all financial benefits plus the legal
rate of interest prevailing at the time of the reimbursement without prejudice to the filing
of charges against me. (Emphasis supplied for emphasis)
Moreover, I understand that the University may send a fact-finding team to visit my
home/residence to verify the veracity of the information provided in this application and I
will give my utmost cooperation in this regard. I also understand that my refusal to
cooperate with the fact-finding team may mean suspension of withdrawal of STFAP
benefits and privileges.
—————
——
Student's
Signature
227
Statement of the Applicant's Parent or Guardian
I hereby certify to the truthfulness and completeness of the information which my
son/daughter/dependent has furnished in this application together with all the documents
attached. I further recognize that in signing this application form, I share with my
son/daughter/dependent the responsibility for the truthfulness and completeness of the
information supplied herein. (Emphasis supplied for emphasis)
Moreover, I understand that the University may send a fact-finding team to visit my
home/residence to verify the information provided in this application and I will give my
utmost cooperation in this regard. I also understand that my refusal to cooperate with the
fact-finding team may mean suspension or withdrawal of STFAP benefits and privileges
of my son/daughter/dependent.
—————————————
————
Parent's/Legal
Guardian's/Spouse's Signature1
From the early stages of its implementation, measures were adopted to safeguard the integrity of the
program. One such precautionary measure was the inclusion as one of the punishable acts under Section 2
(a) of the Rules and Regulations on Student Conduct and Discipline of the University the deliberate
falsification or suppression/withholding of any material information required in the application form.
To further insure the integrity of the program, a random sampling scheme of verification of data indicated in
a student's application form is undertaken. Among those who applied for STFAP benefits for School Year
1989-90 was Ramon P. Nadal, a student enrolled in the College of Law.
On March 14, 1991, a team composed of Arsenio L. Dona and Jose Carlo Manalo conducted a home
investigation at the residence of Nadal at 31 Twinpeaks Drive, Blue Ridge, Quezon City.
Ms. Cristeta Packing, Nadal's aunt, was interviewed and the team submitted a home visit report.
Consolacion Urbino, Scholarship Affairs Officer II, found discrepancies between the report and Nadal's
application form. Forthwith, she and Bella M. Villanueva, head of the Office of Scholarships and Student
Services, presented the matter to the Diliman Committee on Scholarships and Financial Assistance.2
In compliance with the said Committee's directive, Bella Villanueva wrote Nadal informing him that the
investigation showed that he had failed to declare, not only the fact that he had been maintaining a 1977
Corolla car which was owned by his brother but also the income of his mother who was supporting his
brothers Antonio and Federico. Nadal was likewise informed that the Diliman Committee had reclassified
him to Bracket 9 (from Bracket 4), retroactive to June 1989, unless he could submit "proofs to the contrary."
Nadal was required "to pay back the equivalent amount of full school fees" with "interest based on current
commercial rates." Failure to settle his account would mean the suspension of his registration privileges and
the withholding of clearance and transcript of records. He was also warned that his case might be referred to
the Student Disciplinary Tribunal for further investigation.3
On July 12, 1991, Nadal issued a certification stating, among other things, that his mother migrated to the
United States in 1981 but because her residency status had not yet been legalized, she had not been able to
find a "stable, regular, well-paying employment." He also stated that his mother, jointly with his brother
Virgilio, was shouldering the expenses of the college education of his two younger brothers.4
Noting further discrepancies between Nadal's application form and the certification, the U.P. charged Nadal
before the Student Disciplinary Tribunal (SDT) on August 23, 1991 with the following:
That respondent RAMON P. NADAL (UP Student No. 83-11640), a student of the
College of Law, UP System, Diliman, Quezon City, and STFAP (ISKOLAR NG
BAYAN) recipient (Bracket 4 for SY 1989-1990; Bracket 5 for SY 1990-1991) in his
applications for STFAP (ISKOLAR NG BAYAN) benefits which he filed for schoolyear
1989-1990, and schoolyear 1990-1991, with the Office of Scholarship and Student
 Services (formerly Scholarship and Financial Assistance Service) voluntarily and
willfully withheld and did not declare the following:
(a) That he has and maintains a car (Toyota Corolla, Model 1977); and
(b) The income of his mother (Natividad Packing Nadal) in the
U.S.A., in support of the studies of his brothers Antonio and Federico,
which acts of willfully withholding information is tantamount to acts of dishonesty in
relation to his studies, in violation of paragraph (a), Section 2, of the Rules and
Regulations on Student Conduct and Discipline, as amended. (Approved by the B.O.R. at
its 876th meeting on 02 September 1976, amended at the 923rd B.O.R. meeting on 31
January 1980, and further amended at its 1017th B.O.R. meeting on 08 December 1988). 5
On October 27, 1992, after hearing, the SDT6 rendered a decision in SDT Case No. 91-026 exculpating
Nadal of the charge of deliberately withholding in his STFAP application form information that he was
maintaining a Toyota Corolla car, but finding him guilty of "wilfully and deliberately withholding
information about the income of his mother, who is living abroad, in support of the studies of his brothers
Antonio and Federico, 7 which is tantamount to acts of dishonesty in relation to his studies in violation of
paragraph [a], Section 2 of the Rules [now covered by paragraph (i), Section 2 of the Rules, as amended 25
June 1992]." As such, the SDT imposed upon Nadal the penalty of expulsion from the University and
required him to reimburse all STFAP benefits he had received but if he does not voluntarily make
reimbursement, it shall be "effected by the University thru outside legal action." 8
The SDT decision was thereafter automatically elevated to the Executive Committee of U.P. Diliman for
review pursuant to Sec. 20 of the U.P. Rules on Student Conduct and Discipline. On November 26, 1992,
the Executive Committee, voting 13:4, affirmed the decision of the SDT; whereupon, Nadal appealed to the
Board of Regents (BOR). The appeal was included in the agenda of the BOR meeting on January 25, 1993. 9
On January 18, 1993, upon her assumption to the Chairmanship of the Senate Committee on Education,
thereby making her automatically a member of the BOR, Senator Leticia Ramos-Shahani wrote the BOR a
letter expressing her view that, after a close review of Nadal s case by her legal staff, "it is only fair and just
to find Mr. Nadal's appeal meritorious and his arguments worthy of belief. Consequently, he should be
allowed to graduate and take the bar examinations this year." 10
At its January 25, 1993 meeting, the BOR affirmed the decision of the SDT but because "the Board was
willing to grant a degree of compassion to the appellant in view of the alleged status and predicament of the
mother as an immigrant 'TNT' in the United States," the penalty was modified "from Expulsion to One Year-
Suspension, effective immediately, plus reimbursement of all benefits received from the STFAP, with legal
interest." The BOR also decided against giving Nadal, a certification of good moral character. 11
Nadal forthwith filed a motion for reconsideration of the BOR decision, allegedly against the advice of his
counsel. 12The motion was placed on the agenda of the February 25, 1993 meeting of the BOR. A day before
said date, Senator Shahani wrote the BOR another letter requesting that deliberation on Nadal's case be
deferred until such time as she could attend a BOR meeting.
On March 15, 1993, the U.P. filed an opposition to Nadal's motion for reconsideration. Thereafter, the BOR
held a special meeting to accommodate the request of Regent Shahani with Nadal's case as the sole item on
its agenda. Again, Nadal's motion for reconsideration was included in the March 23, 1993 agenda but in
view of the absence of Senator Shahani, the decision thereon was deferred.
At the special meeting of the BOR on March 28, 1993 at the Board Room of the Manila Polo Club in Forbes
Park, Makati, Regent Antonio T. Carpio raised the "material importance" of verifying the truth of Nadal's
claim that earlier, he was a beneficiary of a scholarship and financial aid from the Ateneo de Manila
University (AdeMU). Learning that the "certification issued by the AdeMU that it had not given Nadal
financial aid while he was a student there was made through a telephone call," Regent Carpio declared that
there was as yet "no direct evidence in the records to substantiate the charge." According to Carpio, if it
should be disclosed that Nadal Falsely stated that he received such financial aid, it would be a clear case of
228
gross and material misrepresentation that would even warrant the penalty of expulsion. Hence, he cast a
conditional vote that would depend on the verification of Nadal's claim on the matter.
U.P. President and concurrently Regent Jose V. Abueva countered by stating that "a decision should not be
anchored solely on one piece of information which he considered irrelevant, and which would ignore the
whole pattern of the respondent's dishonesty and deception from 1989 which had been established in the
investigation and the reviews." He added that "the respondent's eligibility for his AdeMU high school
scholarship and financial assistance from 1979 to 1983 does not in any way establish that he is 'not guilty as
charged' before the SDT," since the formal charges against him do not include withholding of information
regarding scholarship grants received from other schools.
At the said March 28, 1993 special meeting, the Board decided to go into executive session where the
following transpired:
The Chairman of the Board, together with the President, directed the Secretary to reflect
in the minutes of the meeting the following decisions of the Board in executive session,
with only the Board members present.
A vote was held by secret ballot on whether Ramon P. Nadal was guilty or not guilty as
charged of willful withholding of information in relation to his application for Socialized
Tuition and Financial Assistance Program (STFAP) benefits which he filed for
Schoolyears 1989-1990 and 1990-1991 which is tantamount to act of dishonesty in
relation to his studies, in violation of paragraph (a), Section 2 of the Rules and
Regulations on Student Conduct and Discipline, as amended.
The Chairman gave the following results of the Board action during the Executive
Session: four (4) voted guilty; three (3) voted not guilty; and three (3) gave conditional
votes, pending verification with Father Raymond Holscher of Ateneo de Manila
University of Ramon P. Nadal's statement in his STFAP application that he was granted
scholarship while he was in high school. Should Ateneo confirm that Nadal had not
received financial assistance, then the conditional votes would be considered as guilty,
and if otherwise, then not guilty. The Chairman requested the President to make the
verification as soon as possible the next day. In answer to a query, the Chairman clarified
that once the information was received from Ateneo, there would be no need for another
meeting to validate the decision.
The President reiterated his objections to the casting of conditional votes.
The Chairman himself did not vote. 13
In the morning of March 29, 1993, the AdeMU issued a certification to the effect that Nadal was indeed a
recipient of a scholarship grant from 1979 to 1983. That evening, the BOR met again at a special meeting at
the Westin Philippine Plaza Hotel. According to Regent Carpio, in executive session, the BOR found Nadal
"guilty" as the members voted as follows: six members — guilty, three members — not guilty, and three
members abstained. 14Consequently, the BOR imposed on Nadal the penalties of suspension for one (1) year
effective March 29, 1993, non-issuance of any certificate of good moral character during the suspension
and/or as long as Nadal has not reimbursed the STFAP benefits he had received with 12% interest per
annum from march 30, 1993 and non-issuance of his transcript of records until he has settled his financial
obligations with the university. 15
On March 30, 1993, Nadal wrote President Abueva a handwritten letter stating that "after learning of the
latest decision" of the BOR, he had been "intensely concentrating on (his) job so that (he) can earn enough
to pay for (his) financial obligations to the University." Alleging that he was "now letting nature take its
course," Nadal begged President Abueva not to issue any press release regarding the case. 16
However, on April 22, 1993, Nadal filed with the Regional Trial Court of Quezon City a petition
for mandamus with preliminary injunction and prayer for a temporary restraining order against President
Abueva, the BOR, Oscar M. Alfonso, Cesar A. Buenaventura, Armand V. Fabella and Olivia C. Caoili. The
petition prayed:
 After trial on the merits, judgment be rendered as follows:
a. Making the preliminary injunction permanent;
b. Ordering respondents 'to uphold and implement their decision rendered on 28 March
1993, exonerating petitioner from all the charges against him, and accordingly dismissing
SDT No. 91-026;
c. Ordering respondents jointly and severally to pay petitioner litigation expenses of at
least P150,000.00.
Other just and equitable reliefs are likewise prayed for. 17
The motion for the issuance of a temporary restraining order and the writ of preliminary injunction was
immediately set for hearing. At the May 10, 1993 hearing, the lower court declared that the only issue to be
resolved was "whether or not the respondents in Civil Case No. 93-15665 violated (Nadal's) right to due
process when it rendered a decision finding Nadal guilty of the charges against him" during the March 29,
1993 meeting. After the respondents had presented their first witness, Dr. Olivia C. Caoili, the lower court
asked respondents' counsel whether they were amenable to maintaining the status quo. Said counsel replied
in the negative, asserting the University's prerogative to discipline students found guilty of violating its rules
of discipline.18
On the same day, the lower court 19 issued the following Order:
The parties were heard on their respective positions on the incident (application for
preliminary injunction and prayer for temporary restraining order and opposition thereto).
For lack of material time set this for continuation on May 17 and 18, 1993 both at 2:30
p.m.
In the meantime, in order that the proceedings of this case may not be rendered moot and
academic, the respondents herein, namely: Jose V. Abueva, President of the University of
the Philippines and Vice-Chairman of the U.P. Board of Regents, Oscar M. Alfonso,
Cesar A. Buenaventura and Armand V. Fabella, members of the U.P. Board of Regents,
Olivia C. Caoili, the officers, agents, representatives, and all persons acting in their
behalf, are hereby temporarily restrained from implementing their decision rendered on
March 29, 1993 in Administrative SDT Case No. 91-026 entitled University of the
Philippines vs. Ramon P. Nadal, as reflected in the Minutes of the 1062nd meeting of the
Board of Regents, U.P. held at the Romblon Room, Westin Phil. Plaza, Manila, until
further order from this Court.
SO ORDERED.
Thereafter, Nadal presented as witnesses Regents Emerenciana Y. Arcellana, Ariel P. Tanangonan, Leticia
R. Shahani and Antonio T. Carpio. The University, on the other hand, presented Dr. Olivia Caoili and Nadal
himself as a hostile witness. On May 29, 1993, the lower court issued the following Order:
The petitioner complains that he was not afforded due process when, after the Board
Meeting on SDT Case No. 91-026 on March 28, 1993 that resulted in a decision of "NOT
GUILTY" in his favor, the Chairman of the U.P. Board of Regents, without notice to the
herein petitioner, called another meeting the following day to deliberate on his (the
Chairman's) MOTION FOR RECONSIDERATION, which this time resulted in a
decision of "GUILTY." While he main issue of violation of due process raised in the
petition pends trial and resolution, the petitioner prays for the issuance of a writ of
preliminary injunction prohibiting the respondents from further proceeding with SDT
Case No. 21-026 and from suspending the petitioner for one year.
It is a basic requirement in the issuance of the preliminary injunctive writ that there must
be a right to be protected. As the issue in the case at bar is due process in the March 29
Board meeting, there is, indeed, a right to be protected for, in administrative proceedings,
a respondent's right to due process exists not only at the early stages but also at the final
stage thereof.
229
With the circulation to the members of the Board of Regents, as well as to other UP
personnel, of the Minutes of the March 29, 1993 meeting, even after this case had already
been filed, the Court is convinced that there now exists a threat to the petitioner
(respondent in SDT Case No, 91-026) that the decision of the Board of Regents finally
finding him guilty of willfully withholding information material to his application for
Socialized Tuition and Financial Assistance Program (STFAP) benefits, will be
implemented at any time, especially during the enrollment period, and this
implementation would work injustice to the petitioner as it would delay him in finishing
his course, and, consequently, in getting a decent and good paying job. The injury thus
caused would be irreparable.
"Damages are irreparable within the meaning of the rule where there is
no standard by which their amount can be measured with reasonable
accuracy. Where the damage is susceptible of mathematical
computation, it is not irreparable." (Social Security Commission v.
Bayona, et al., G.R. No. L-13555, May 30, 1962).
IN VIEW OF THE FOREGOING, and so as not to render moot the issues in the instant
proceedings, let a writ of preliminary injunction be issued restraining the respondents,
their officers, agent(s), representatives, and all persons acting in their behalf, from further
proceeding with SDT Case No. 91-026, and from suspending petitioner, upon the latter's
filing a bond in the amount of P3,000.00.
IT IS SO ORDERED. 20
Dispensing with the filing of a motion for reconsideration, the petitioners filed the instant petition
for certiorari and prohibition with prayer for the issuance of an injunction or temporary restraining order,
raising the following issues: whether or not Nadal was denied due process in the administrative disciplinary
proceedings against him, and, whether or not the respondent judge gravely abused her discretion in issuing
the May 29, 1993 writ of preliminary injunction thereby preventing the BOR from implementing the
suspension penalty it had imposed on Nadal.
Before proceeding with the discussion of the merits of the instant petition, we shall confront a threshold
issue raised by private respondent, namely, that Dr. Caoili, not having been authorized by the Board of
Regents as a collegial body to file the instant petition, and Dr. Abueva, who verified the petition, not being
the "Board of Regents" nor "the University of the Philippines," they are not real parties in interest who
should file the same. 21
A real party in interest is one "who stands to be benefited or injured by the judgment or the party entitled to
the avails of the suit. 'Interest' within the meaning of the rule means material interest, an interest in issue and
to be affected by the decree, as distinguished from mere interest in the question involved, or a mere
incidental interest."22Undoubtedly, the U.P. Board of Regents has an interest to protect inasmuch as what is
in issue here is its power to impose disciplinary action against a student who violated the Rules and
Regulations on Student Conduct and Discipline by withholding information in connection with his
application for STFAP benefits, which information, if disclosed, would have sufficed to disqualify him from
receiving the financial assistance he sought. Such dishonesty, if left unpunished, would have the effect of
subverting a commendable program into which the University officials had devoted much time and
expended precious resources, from the conceptualization to the implementation stage, to rationalize the
socialized scheme of tuition fee payments in order that more students may benefit from the public funds
allocated to the State University.
Having specifically named Drs. Abueva and Caoili as respondents in the petition for mandamus that he filed
below, Nadal is now estopped from questioning their personality to file the instant petition. 23 Moreover,
under Sec. 7 of the U.P. Charter (Act 1870) and Sec. 11 of the University Code "all process" against the
BOR shall be served on "the president or secretary thereof'." It is in accordance with these legal provisions
that Dr. Caoili is named as a petitioner. Necessarily, Dr. Abueva, the University President and member of
the BOR, has to verify the petition. It is not mandatory, however, that each and every member of the BOR
be named petitioners. As the Court has time and again held, an action may be entertained, notwithstanding
the failure to include an indispensable party where it appears that the naming of the party would be but a
formality. 24
No longer novel, as this is not a case of first impression, is the issue on the right of an academic institution
to refuse admission to a student arising from the imposition upon him of an administrative disciplinary
sanction. In our recent decision in Ateneo de Manila University v. Hon. Ignacio M. Capulong,25 wherein
certain law students were dismissed for hazing resulting in the death of another, we held that the matter of
admission of students is within the ambit of academic freedom and therefore, beyond the province of the
courts to decide. Certain fundamental principles bear stressing.
One of the arguments of Nadal in his petition for mandamus below was that he was denied due process. To
clarify, the so-called lack of due process referred only to the March 29, 1993 meeting of the BOR. As stated
by respondent's counsel: "What was conceded by undersigned counsel was that Nadal was afforded due
process from the start of the administrative proceeding up to the meeting of the Board of Regents on March
28, 1993."26
With respect to the March 29, 1993 meeting, respondent considers the same as "unquestionably void for lack
of due process" inasmuch as he was not sent a notice of said meeting. Counsel cites the ruling in Non
v. Dames II 27 that imposition of sanctions on students requires "observance of procedural due
process," 28 the phrase obviously referring to the sending of notice of the meeting.
Attention is drawn to the disparate factual environments obtaining in Non v. Dames II and in the instant
case. In the former case, the students were refused admission for having led or participated in student mass
actions against the school, thereby posing a collision between constitutionally cherished rights — freedom
of expression and academic freedom. In the case at bar, Nadal was suspended for having breached the
University's disciplinary rules. In the Non case, the Court ruled that the students were not afforded due
process for even the refusal to re-enroll them appeared to have been a mere afterthought on part of the
school administrators. Here, Nadal does not dispute the fact that his right to due process was held inviolate
until the BOR decided to meet on March 29, 1993 with his case as the sole item on the agenda.
In any event it is gross error to equate due process in the instant case with the sending of notice of the March
29, 1993 BOR meeting to respondent. University rules do not require the attendance in BOR meetings of
individuals whose cases are included as items on the agenda of the Board. This is not exclusive of students
whose disciplinary cases have been appealed to the Board of Regents as the final review body. At no time
did respondent complain of lack of notice given to him to attend any of the regular and special BOR
meetings where his case was up for deliberation. He would make an exception of the March 29, 1993
meeting for it was "supposed to reconsider the decision made on March 28, 1993 exonerating respondent
Nadal from all administrative charges against him." 29
Regent Antonio T. Carpio, in his testimony before the lower court on May 25, 1993 admitted that there was
no final verdict at the March 28, 1993 meeting in view of the conditional votes resulting from his assertion
that he was "not morally convinced that there was sufficient evidence to make a finding of guilty against
Nadal because there was no direct evidence that his mother received income from the United States and this
income was sent to the Philippines to support the studies of the children." 30 Two regents shared the view of
Regent Carpio, with the following result: four voted guilty, three, not guilty, and three cast conditional
votes. The BOR agreed that, upon the suggestion of Regent Carpio, they would still verify from the AdeMU
about Nadal's alleged scholarship as a student in said institution. Consequently, no definitive decision was
arrived at by the BOR on March 28, 1993, Much less was a verdict of exoneration handed down as averred
by respondent.
Regent Carpio testified, with respect to the March 29, 1993 meeting where all twelve members of the BOR
were present, that all of them participated in the voting held to reconsider the previous day's decision. He
stated "I remember Regent Arcellana questioning the voting again on the ground that there was already a
final decision, but there was a vote taken on whether a motion for reconsideration can be decided by the
230
board, and a majority of the board ruled that the matter can be reconsidered again upon motion of the
chairman." 31
At said meeting, six (6) regents voted to find respondent guilty, three (3) voted that he was not guilty and
three (3) abstained. As succinctly announced by Regent Carpio, the final decision was that which was
rendered on March 29, 1993 as "no other decision was made by the Board with respect to the same issue." 32
Counsel for Nadal charged before the lower court that his client was "not given due process in the March 29
meeting because the ground upon which he was again convicted was not the same as the original
charge."33Obviously, he was referring to the basis of the conditional votes on March 28, i.e., whether or not
Nadal was telling the truth when he claimed that he received a scholarship grant from the AdeMU.
However, Regent Carpio himself testified that the charge considered was "exactly the same charge" of
withholding information on the income of Nadal's mother. 34 It should be stressed that the reason why
Regent Carpio requested a verification of Nadal's claim that he was a scholar at the AdeMU was that Regent
Carpio was not "morally convinced" yet as to the guilt of Nadal. In other words, he sought additional
insights into the character of Nadal through the information that would be obtained from the AdeMU.
In this regard, we find such information to be irrelevant and a mere superfluity. In his July, 12, 1991
certification aforementioned, Nadal admitted, although inconsistently, that his mother was a "TNT" who
could not find a "stable, regular, well-paying employment" but that she was supporting the education of his
brothers with the help of another son. To our mind, this constitutes sufficient admission that Nadal withheld
information on the income, however measly and irregular, of his mother. Unlike in criminal cases which
require proof beyond reasonable doubt as basis for a judgment, in administrative or quasi-
judicial proceedings, only substantial evidence is required, that which means more than a mere scintilla or
relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other
minds equally reasonable might conceivably opine otherwise. 35 In light of the foregoing circumstances, we
find that Nadal has been sufficiently proven to have violated his undertaking to divulge all information
needed when he applied for the benefits of the STFAP.
Let it not be forgotten that respondent aspires to join the ranks of the professionals who would uphold truth
at all costs so that justice may prevail. The sentinels who stand guard at the portals leading to the hallowed
Temples of Justice cannot be overzealous in admitting only those who are intellectually and morally fit. In
those who exhibit duplicity in their student days, one spots the shady character who is bound to sow the
seeds of chicanery in the practice of his profession.
Having reached his senior year, respondent is presumably aware that the bedrock axiom, Canon I, Rule 1.01
of the Code of Professional Responsibility states: "A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct." Further on, Canon 7, Rule 7.01 provides: "A lawyer shall be answerable for
knowingly making a false statement or suppressing a material fact in connection with his application for
admission to the bar." (Emphasis supplied for emphasis)
Surely, it is not too early to warn entrants to the noble profession of law that honesty and integrity are
requirements no less weighty than hurdling the Bar examinations. This is the reason why a certification of
good moral character is one of the documents that must be submitted in applying to take said examination.
In fact, a charge of immoral or deceitful conduct on the part of an applicant, when proved, is a ground for
disqualifying him.
To revert to the instant case, inasmuch as it has been shown sufficiently that respondent has committed an
act of dishonesty in withholding vital information in connection with his application for STFAP benefits, all
in blatant violation of the Rules and Regulations on Student Conduct and Discipline of petitioner University,
the latter's inherent power and authority to impose disciplinary sanction may be invoked and rightfully
exercised.
As a Bohemian proverb puts it: "A school without discipline is like a mill without water." Insofar as the
water turns the mill, so does the school's disciplinary power assure its right to survive and continue
operating. In more relevant terms, through its power to impose disciplinary sanctions, an educational
institution is able to exercise its academic freedom which is, in the case at bar, the right to suspend and
refuse admission to a student who has subverted its authority in the implementation of the critically his studies he would, in effect render moot and academic the disciplinary sanction of suspension legally
important STFAP. imposed upon him by the BOR's final decision of March 29, 1993. What is to prevent other aspirants for
At the risk of being repetitious, the matter of admission to a University is encompassed by the right of STFAP scholarships from misleading the University authorities by misrepresenting certain facts or as in
academic freedom. In Garcia v. The Faculty Admission Committee, Loyola School of Theology 36 the Court instant case, withholding vital information and stating downright falsehoods, in their application forms with
stated that a school or college which is possessed of the right of academic freedom "decides for itself its impunity? Not only would this undermine the authority of the U.P. to discipline its students who violated the
aims and objectives and how best to attain them. It is free from outside coercion or interference save rules and regulations of the institution but, more importantly, subvert the very concept and lofty intent to
possibly when the overriding public welfare calls for some restraint. It has a wide sphere of autonomy give financial assistance to poor but deserving students through the STFAP which, incidentally, has not
certainly extending to the choice of students." Elucidating, in Ateneo de Manila University v. Hon. Ignacio ceased refining and modifying it's operations.
M. Capulong, 37 the Court further expounded: WHEREFORE, the instant petition is GRANTED and the lower court is hereby ordered to DISMISS the
Since Garcia v. Loyola School of Theology, we have consistently upheld the salutary petition for mandamus.
proposition that admission to an institution of higher learning is discretionary upon a SO ORDERED.
school, the same being a privilege on the part of the student rather than a right. While
under the Education Act of 1982, students have a right "to freely choose their field of
study, subject to existing curricula and to continue their course therein up to graduation,"
such right is subject, as all rights are, to the established academic and disciplinary
standards laid down by the academic institution.
For private schools have the right to establish reasonable rules and regulations for the
admission, discipline and promotion of students. This right . . . extends as well to parents
. . . as parents are under a social and moral (if not legal) obligation, individually and
collectively, to assist and cooperate with the schools.
Such rules are "incident to the very object of incorporation and indispensable to the
successful management of the college. The rules may include those governing student
discipline." Going a step further, the establishment of rules governing university-student
relations, particularly those pertaining to student discipline, may be regarded as vital, if
not merely to the smooth and efficient operation of the institution, but to its very survival.
Within memory of the current generation is the eruption of militancy in the academic
groves as collectively, the students demanded and plucked for themselves from the
panoply of academic freedom their own rights encapsulized under the rubric of "right to
education" forgetting that, in Hohfeldian terms, they have a concomitant duty, that
is, their duty to learn under the rules laid down by the school. (Emphasis supplied.)
On the second issue presented for adjudication, the Court finds that the lower court gravely abused its
discretion in issuing the writ of preliminary injunction of May 29, 1993. The issuance of the said writ was
based on the lower court's finding that the implementation of the disciplinary sanction of suspension on
Nadal "would work injustice to the petitioner as it would delay him in finishing his course, and
consequently, in getting a decent and good paying job." Sadly, such a ruling considers only the situation of
Nadal without taking into account the circumstances clearly of his own making, which led him into such a
predicament. More importantly, it has completely disregarded the overriding issue of academic freedom
which provides more than ample justification for the imposition of a disciplinary sanction upon an erring
student of an institution of higher learning.
From the foregoing arguments, it is clear that the lower court should have restrained itself from assuming
jurisdiction over the petition filed by Nadal. Mandamus is never issued in doubtful cases, a showing of a
clear and certain right on the part of the petitioner being required. 38 It is of no avail against an official or
government agency whose duty requires the exercise of discretion or judgment. 39
Hence, by issuing the writ of preliminary injunction, the lower court dared to tread upon legally forbidden
grounds. For, by virtue of the writ, the University's exercise of academic freedom was peremptorily
curtailed. Moreover, the door was flung wide open for Nadal to do exactly what the decision of the BOR
prohibited him from doing and that is, to violate the suspension order by enrolling for the first semester of
1993-1994. It must have been with consternation that the University officials helplessly watching him
complete his academic requirements for taking the Bar. 40 In the event that he be allowed to continue with

231
 EN BANC
G.R. No. 70484 January 29, 1988
ROMAN C. TUASON and REMEDIOS V. TUASON, by attorney-in-fact Trinidad S. Viado, petitioners,
vs.
REGISTER OF DEEDS, CALOOCAN City, MINISTRY OF JUSTICE, and the NATIONAL
TREASURER, respondents. TOMASA BARTOLOME, in her own behalf and in behalf of the other
members of the "Consuelo Heights Homeowners Association," petitioners-intervenors.
Orlando A. Rayos for petitioners-intervenors.
The Solicitor General for respondents.
NARVASA, J.:
A more despotic, capricious, oppressive and unjustifiable exercise of government power than that
manifested in this case can scarcely be found in the sordid annals of the martial law regime. Relief to the
victims must be as it is hereby extended by the grant to them of the extraordinary writ of certiorari and
prohibition condemning as unconstitutional, and annulling and perpetually enjoining the acts complained of.
Petitioner spouses, the Tuasons, were retired public school teachers. On April 6, 1965, with funds pooled
from their retirement benefits and savings, they bought from Carmel Farms, Inc. (hereafter simply, Carmel)
a piece of land measuring about 8,756 square meters, in the latter's subdivision in Barrio Makatipo,
Caloocan City. In virtue of this sale, Carmel's Torrens title (No. 64007) over the lot was cancelled and a new
one (No. 8314) issued in the name of the Tuasons. The Tuasons took possession of their property.
Some eight (8) years thereafter, the Tuasons' travails began. They woke up one morning to discover that by
presidential flat, they were no longer the owners of the land they had purchased with their hard-earned
money, and that their land and the other lots in the subdivision had been "declared open for disposition and
sale to the members of the Malacanang Homeowners Association, Inc., the present bona fide occupants
thereof."
On September 14, 1973-a year almost to the day after the declaration of martial law Mr. Ferdinand Marcos,
then president of the country, invoking his emergency powers, issued Presidential Decree No. 293 with
immediate effect. The decree invalidated inter alia the title of the Tuasons' vendor, Carmel, which had
earlier purchased from the Government the land it had subsequently subdivided into several lots for sale to
the public (the Tuasons being among the buyers). The land bought by Carmel was part of the Tala Estate
(one of the so-called "Friar Lands"). Carmel had bought the land under Act No. 1120 and C.A. No. 32, as
amended. Under these statutes:
1) a bona fide settler or occupant was allowed to purchase (if he did not wish to lease) the portion occupied
by him at the price fixed by the Government, in cash or on installment; the interested buyer was given a
certificate of sale, which was regarded as an agreement by him to pay the purchase price in the and at the
interest specified, the acceptance of such certificate making the occupant a debtor of the government;
2) until the price was fully paid however, title was reserved in the Government, and any sale or
encumbrance made by the purchaser prior to such full payment was explicitly declared to 'be invalid as
against the Government ... and ... in all respects subordinate to its prior claim;"
3) in the event of default by a purchaser to pay any installment of purchase money and interest thereon, the
Chief of the Bureau of Public Lands (now Director of Lands) had the duty at once to protect the Government
from loss by bringing suit to obtain judicial authority to enforce the Government's lien on the "and by selling
it in the same manner as for foreclosure of mortgages, the purchaser at such sale being deemed to acquire a
good and indefeasible title, and the proceeds of the sale being applied to the payment of the costs of the
court and all installments due or to become due; and
4) in the event of completion of payment, the Government transferred title to the land to the purchaser "by
proper instrument of conveyance," the certificate of title over the land to issue and become effective in the
manner provided by the Land Registration Act. 1
232
Said Presidential Decree No. 293 made the finding 2 that Carmel had failed to complete payment of the
price. It adjudged that —
... according to the records of the Bureau of Lands, neither the original purchasers nor
their subsequent transferees have made full payment of all installments of the purchase
money and interest on the lots claimed by the Carmel Farms, Inc., including those on
which the dwellings of the members of said Association 3 stand. Hence, title to said land
has remained with the Government, and the land now occupied by the members of said
association has never ceased to form part of the property of the Republic of the
Philippines, any and all acts affecting said land and purporting to segregate it from the
said property of the Republic of the Philippines being therefore null and void ab initio as
against the law and public policy.
Upon this adjudgment, Mr. Marcos invalidated the titles of Carmel Farms, Inc. and all those derived
therefrom, and declared as aforestated "the members of the Malacanang Homeowners Association, Inc. the
present bona fide occupants" of the lots which, in consequence, thereby became open to them for
"disposition and sale ... pursuant to Commonwealth Act No. 32, as amended." 4
It seems to have completely escaped Mr. Marcos' attention that his decree contained contradictory
declarations. While acknowledging on the one hand that the lots in the Carmel Subdivision were occupied
by the buyers thereof, and in fact the latter's dwellings stood thereon, he states on the other that
the "members of the Malacanang Homeowners Association, Inc. (are) the present bona fide occupants" of
all said lots. The latter averment is not only essentially inconsistent with the former but is both a physical
and legal fallacy. Well known is the rule of physics that two objects cannot occupy the same space at the
same time. And the absurdity of the subsumed proposition is self-evident for persons not in possession of
land, who probably have not even set foot thereon, cannot be deemed "occupants" thereof, much less "bona
fide" occupants.
But this notwithstanding, and upon the factual premise already indicated, Mr. Marcos disposed of the land of
the petitioner spouses and others similarly situated as they, in the following imperious manner:
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the
Armed Forces of the Philippines, and pursuant to Proclamation 1081, dated September
21, 1972, and General Order No. 1, dated September 22, 1972, do hereby order and
decree that any and all sales contracts between the government and the original
purchasers, are hereby cancelled, and those between the latter and the subsequent
transferees, and any and all transfers thereafter, covering lots 979, 981, 982, 985, 988,
989, 990, 991 new, 1226, 1228, 1230, and 980-C-2 (LRC PSD-1730), all of Tala Estate,
Caloocan City, are hereby declared invalid and null and void ab initio as against the
Government; that Transfer Certificates of Title Nos. 62603, 62604, 62605, covering lots
1, 2 and 3, PCS-4383, all in the name of Carmel Farms, Inc., which are a consolidation
and subdivision survey of the lots hereinbefore enumerated, are declared invalid and
considered cancelled as against the Government; and that said lots are declared open for
disposition and sale to the members of the Malacanang Homeowners Association, Inc.,
the present bona fide occupants thereof, pursuant to Commonwealth Act No. 32, as
amended.
On the strength of this presidential decree, the Register of Deeds of Caloocan City caused the inscription on
the Tuasons' title, TCT No. 8314, of the following:
MEMORANDUM. — Pursuant to Presidential Decree No. 293, this certificate of title is
declared invalid and null and void ab initio and considered cancelled as against the
Government and the property described herein is declared open for disposition and sale to
the members of the Malacanang Homeowners Association, Inc.
The Tuason Spouses thereupon filed with this Court a petition for certiorari assailing the Marcos decree as
an arbitrary measure which deprived them of their property in favor of a selected group, in violation not only
of the constitutional provisions on due process and eminent domain 5 but also of the provisions of the Land
Registration Act on the indefeasibility of Torrens titles; 6 and they prayed that the Register of Deeds be
directed to cancel the derogatory inscription on their title and restore its efficacy, or in the alternative, that
they be compensated for the loss from the Assurance Fund.
Mr. Marcos' Solicitor General sought to sustain the decree. In his comment on the petition, 7 he questioned
the propriety of the remedy of certiorari resorted to by the petitioners, it not appearing that the public
respondents were being sued as judicial or quasi-judicial officers who had acted without or in excess of their
jurisdiction, or with grave abuse of discretion. He opined that the petitioner spouses had no cause to
complain of unjust deprivation of property because in legal contemplation 8 they had never become owners
thereof because of non-payment of the purchase price by their predecessor-in-interest; and the decree was
justifiable under the social justice clause of the Constitution and the police power, being in response to the
pressing housing need of the employees of the Office of the President who were left homeless and landless
after they were asked to vacate Malacanang Park where they had theretofore been residing. He expressed the
view, too, that petitioner spouses were not entitled to recover anything from the Assurance Fund.
Petitions for intervention have of late been filed by sixty-four (64) persons, members of the "Consuelo
Heights Homeowners Association" headed by Tomasa Bartolome, on the claim that they, too, had been
divested of their lands by the same Presidential Decree No. 293, adopting as their own the allegations and
prayer embodied in the Tuasons' petition.
The procedural issue is quite easily disposed of. It is true that the extraodinary writ of certiorari 9 may
properly issue to nullify only judicial or quasi-judicial acts, unlike the writ of prohibition which may be
directed against acts either judicial or ministerial. Section 1, Rule 65 of the Rules of Court deals with the
writ of certiorari in relation to "any tribunal, board or officer exercising judicial functions, while Section 2
of the same Rule treats of the writ of prohibition in relation to "proceedings of any tribunal, corporation,
board, or person ... exercising functions judicial or ministerial." But the petition will be shown upon analysis
to be in reality directed against an unlawful exercise of judicial power.
The decree reveals that Mr. Marcos exercised an obviously judicial function. He made a determination of
facts, and applied the law to those facts, declaring what the legal rights of the parties were in the premises.
These acts essentially constitute a judicial function, 10 or an exercise of jurisdiction — which is the power
and authority to hear or try and decide or determine a cause. 11 He adjudged it to be an established fact that
neither the original purchasers nor their subsequent transferees have made full payment of all installments of
the purchase money and interest on the lots claimed by Carmel Farms, Inc., including those on which the
dwellings of the members of ... (the) Association (of homeowners) stand." And applying the law to that
situation, he made the adjudication that "title to said land has remained with the Government, and the land
now occupied by the members of said association has never ceased to form part of the property of the
Republic of the Philippines," and that 'any and all acts affecting said land and purporting to segregate it from
the said property of the Republic ... (were) null and void ab initio as against the law and public policy.
These acts may thus be properly struck down by the writ of certiorari, because done by an officer in the
performance of what in essence is a judicial function, if it be shown that the acts were done without or in
excess of jurisdiction, or with grave abuse of discretion. Since Mr. Marcos was never vested with judicial
power, such power, as everyone knows, being vested in the Supreme Court and such inferior courts as may
be established by law 12 — the judicial acts done by him were in the circumstances indisputably perpetrated
without jurisdiction. The acts were completely alien to his office as chief executive, and utterly beyond the
permissible scope of the legislative power that he had assumed as head of the martial law regime.
Moreover, he had assumed to exercise power — i.e. determined the relevant facts and applied the law
thereto without a trial at which all interested parties were accorded the opportunity to adduce evidence to
furnish the basis for a determination of the facts material to the controversy. He made the finding ostensibly
on the basis of "the records of the Bureau of Lands." Prescinding from the fact that there is no indication
233
whatever the nature and reliability of these records and that they are in no sense conclusive, it is undeniable
that the petitioner Tuasons (and the petitioners in intervention) were never confronted with those records and
afforded a chance to dispute their trustworthiness and present countervailing evidence. This is yet another
fatal defect. The adjudication was patently and grossly violative of the right to due process to which the
petitioners are entitled in virtue of the Constitution. Mr. Marcos, in other words, not only arrogated unto
himself a power never granted to him by the Constitution or the laws but had in addition exercised it
unconstitutionally.
In any event, this Court has it in its power to treat the petition for certiorari as one for prohibition if the
averments of the former sufficiently made out a case for the latter. 13 Considered in this wise, it will also
appear that an executive officer had acted without jurisdiction — exercised judicial power not granted to
him by the Constitution or the laws — and had furthermore performed the act in violation of the
constitutional rights of the parties thereby affected. The Court will grant such relief as may be proper and
efficacious in the premises even if not specifically sought or set out in the prayer of the appropriate pleading,
the permissible relief being determined after all not by the prayer but by the basic averments of the parties'
pleadings. 14
There is no dispute about the fact that title to the land purchased by Carmel was actually issued to it by the
Government. This of course gives rise to the strong presumption that official duty has been regularly
performed, 15that official duty being in this case the ascertainment by the Chief of the Bureau of Public
Lands of the fulfillment of the condition prescribed by law for such issuance, i.e., the payment in full of the
price, together with all accrued interest. Against this presumption there is no evidence. It must hence be
accorded full sway in these proceedings. Furthermore, the title having been duly issued to Carmel, it became
"effective in the manner provided in section one hundred and twenty-two of the Land Registration Act." 16
It may well be the fact that Carmel really did fail to make full payment of the price of the land purchased by
it from the Government pursuant to the provisions of Act 1120. This is a possibility that cannot be totally
discounted. If this be the fact, the Government may bring suit to recover the unpaid installments and interest,
invalidate any sale or encumbrance involving the land subject of the sale, and enforce the lien of the
Government against the land by selling the same in the manner provided by Act Numbered One Hundred
and Ninety for the foreclosure of mortgages. 17 This it can do despite the lapse of a considerable period of
time. Prescription does not lie against the Government. But until and unless such a suit is brought and results
in a judgment favorable to the Government, the acquisition of title by Carmel and the purchases by the
petitioners and the petitioners-intervenors from it of portions of the land covered by its original title must be
respected. At any rate, the eventuation of that contingency will not and cannot in any manner affect this
Court's conclusion, herein affirmed, of the unconstitutionality and invalidity of Presidential Decree No. 293,
and the absolute lack of any right to the land or any portion thereof on the part of the members of the so-
called "Malacanang Homeowners Association, Inc." The decree was not as claimed a licit instance of the
application of social justice principles or the exercise of police power. It was in truth a disguised, vile
stratagem deliberately resorted to favor a few individuals, in callous and disdainful disregard of the rights of
others. It was in reality a taking of private property without due process and without compensation
whatever, from persons relying on the indefeasibility of their titles in accordance with and as explicitly
guaranteed by law.
One last word, respecting the petitioners in intervention, Their petition to intervene substantially fulfilled the
requirements laid down for a class suit 18 and was consequently given due course by the Court. They are
therefore covered by this judgment.
WHEREFORE, Presidential Decree No. 293 is declared to be unconstitutional and void ab initio in all its
parts. The public respondents are commanded to cancel the inscription on the titles of the petitioners and the
petitioners in intervention of the memorandum declaring their titles null and void and declaring the property
therein respectively described open for disposition and sale to the members of the Malacanang Homeowners
Association, Inc. to do whatever else is needful to restore the titles to full effect and efficacy; and henceforth
to refrain, cease and desist from implementing any provision or part of said Presidential Decree No. 293. No
pronouncement as to costs.
Yap, Fernan, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento and
Cortes JJ., concur.

234
 FIRST DIVISION
G.R. No. 203124, June 22, 2015
PROVINCE OF LEYTE, HEREIN REPRESENTED BY MR. RODOLFO BADIABLE, IN HIS
CAPACITY AS THE ICO-PROVINCIAL TREASURER, PROVINCE OF
LEYTE, Petitioner, v. ENERGY DEVELOPMENT CORPORATION, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Resolutions dated September 21, 20112 and August
3, 20123 of the Court of Appeals (CA) in CA-G.R. SP No. 04575, which dismissed petitioner Province of
Leyte's (Province of Leyte) petition for certiorari before it on the ground of, inter alia, lack of proof of
service of such petition to the adverse party, respondent Energy Development Corporation (EDC).
The Facts
Sometime in 2006 and 2007, the Province of Leyte issued four (4) separate franchise tax assessments against
EDC which the latter, in turn, protested separately. When the Province of Leyte effectively denied all
protests, EDC appealed such denials before the Regional Trial Court of Tacloban City, Branch 6 (RTC),
docketed as Civil Case Nos. 2006-05-48, 2006-05-49, 2006-07-77, and 2007-08-03.4 Upon motion of EDC,
the RTC issued an Order5 dated February 4, 2008 directing the consolidation of said appeals.6chanrobleslaw
Notwithstanding the pendency of the cases before the RTC, the Province of Leyte issued another tax
assessment against EDC on February 27, 2008, with the Assistant Provincial Treasurer verbally intimating
to EDC that he was under strict instruction from the Governor to enforce the collection of tax through the
available administrative remedies upon the lapse of the sixty (60)-day period mentioned in the
assessment.7chanrobleslaw
This prompted EDC to file a Motion for Issuance of Writ of Preliminary Injunction 8 dated April 4, 2008
praying that the RTC enjoin the Province of Leyte "from assessing, or attempting to assess, collecting or
attempting to collect franchise taxes from, and availing [itself] of enforcement remedies or actions against
[EDC] until [the pending cases before the RTC] shall have been resolved with finality." 9chanrobleslaw
In support of its motion, EDC averred that it does not have a franchise; hence, the Province of Leyte's
assessment of franchise taxes against it is contrary to law and would result in the payment of illegally
exacted taxes if not enjoined. It was further claimed that should the Province of Leyte's actions continue,
EDC's operations will be seriously imperilled and will altogether cease, resulting in loss of substantial
revenues amounting to approximately Twenty One Million Pesos (P21,000,000.00) per day, as well as loss
of jobs for its employees. Finally, EDC contends that the damage that it stands to suffer from the Province of
Leyte's acts is irreparable as there is no assurance that it will be able to recover such losses. 10chanrobleslaw
The RTC Ruling
In an Order11 dated April 18, 2008, the RTC denied EDC's motion on the ground that its grant would in
effect dispose of the cases before it. However, on EDC's motion,12 the RTC issued an Order13 dated July 17,
2009 setting aside its earlier order, and accordingly, directed the issuance of a writ of preliminary injunction
in its favor. Contrary to its earlier ruling, the RTC held that the main action would not be disposed of even
though, in the meantime, the Province of Leyte would be enjoined from collecting franchise taxes from
235
EDC. The RTC further noted that in case EDC is ultimately held liable for said taxes, the injunction bond
would initially and substantially answer for the Province of Leyte's claim. On the other hand, if EDC is
compelled to pay such taxes pending resolution of the cases before the RTC and is subsequently adjudged
not liable to pay the same, there is no assurance that it could recover its operational losses.14chanrobleslaw
Aggrieved, the Province of Leyte elevated the matter before the CA by way of a petition
for certiorari.15chanrobleslaw
The CA Ruling
In a Resolution16 dated September 21, 2011, the CA dismissed the petition on the ground that, inter alia,
"there was no proper proof of service of the [p]etition to the adverse party. Certainly, registry receipts can
hardly be considered sufficient proper proof of receipt by the addressee of registered mail." 17chanrobleslaw
The Province of Leyte moved for reconsideration,18 which was, however, denied in a Resolution19 dated
August 3, 2012; hence, this petition.20chanrobleslaw
The Issue Before the Court
The core issue for the Court's resolution is whether or not the CA correctly dismissed the Province of
Leyte's certiorari petition before it due to its failure to provide proof of service of the same on EDC.
The Court's Ruling
The petition is meritorious.
At the outset, it must be stressed that the instant case was elevated to the CA via a petition
for certiorariwhich is, by nature, an original and independent action, and therefore, not considered as part of
the trial that had resulted in the rendition of the judgment or order complained of. 21 Being an original action,
there is a need for the CA to acquire jurisdiction over the person of the parties to the case before it can
resolve the same on the merits. Naturally, the CA acquired jurisdiction over the person of the petitioner -
which is the Province of Leyte in this case - upon the filing of the certiorari petition. On the other hand,
Section 4, Rule 46 of the Rules of Court (Rules), which covers cases originally filed before the CA, provides
how the CA is able to acquire jurisdiction over the person of the respondent:chanRoblesvirtualLawlibrary
SEC. 4. Jurisdiction over person of respondent, how acquired. — The court shall acquire jurisdiction over
the person of the respondent by the service on him of its order or resolution indicating its initial action
on the petition or by his voluntary submission to such jurisdiction. (Emphases and underscoring
supplied)
Thus, in petitions for certiorari filed before the CA, the latter acquires jurisdiction over the person of the
respondent upon: (a) the service of the order or resolution indicating the CA's initial action on the petition to
the respondent; or (b) the voluntary submission of the respondent to the CA's jurisdiction. In the case at bar,
records reveal that the CA served its Resolution 22 dated November 4, 2009 indicating its initial action on the
Province of Leyte's certiorari petition before it, i.e., directing EDC to file a comment to the petition, among
others. In fact, the EDC complied with such directive by filing its comment 23 dated December 14, 2009 to
such petition. Hence, the CA had already acquired jurisdiction over both parties to the instant case.
Despite the foregoing, the CA still opted to dismiss the Province of Leyte's petition before it on the ground
that, inter alia, there was no proper proof of service of the petition to EDC in accordance with Section 13,
Rule 13, of the Rules,24 which reads:chanRoblesvirtualLawlibrary
SEC. 13. Proof of Service. - Proof of personal service shall consist of a written admission of the party
served, or the official return of the server, or the affidavit of the party serving, containing a full statement of
the date, place and manner of service. If the service is by ordinary mail, proof thereof shall consist of an
affidavit of the person mailing of facts showing compliance with section 7 of this Rule. If service is made
by registered mail, proof shall be made by such affidavit and the registry receipt issued by the mailing
office. The registry return card shall be filed immediately upon its receipt by the sender, or in lieu
thereof the unclaimed letter together with the certified or sworn copy of the notice given by the
postmaster to the addressee. (Emphasis and underscoring supplied)
Relying on Aramburo v. CA,25 the CA held that while the Province of Leyte presented the registry receipt, it
failed to include the registry return card; hence, there was no valid proof of service to EDC, which must then
result in the dismissal of the Province of Leyte's petition.26chanrobleslaw
The CA erred in this regard.
Section 3, Rule 46 of the Rules provides the procedural requirements in filing original actions before the
CA, to wit:chanRoblesvirtualLawlibrary
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. - The petition shall
contain the full names and actual addresses of all the petitioners and respondents, a concise statement of the
matters involved, the factual background of the case, and the grounds relied upon for the relief prayed for.
Verily, the demands of justice require the CA to resolve the issues before it, considering that what is at stake
here are taxes, albeit locally imposed in this case, which are the nation's lifeblood through which
government agencies continue to operate and with which the State discharges its functions for the welfare of
its constituents.29 Thus, it is far better and more prudent for the Court to excuse a technical lapse and afford
the parties a substantive review of the case in order to attain the ends of justice than to dismiss the same on
mere technicalities.30chanrobleslaw
In view of the foregoing discussion and the fact that the CA had dismissed the case on purely procedural
grounds, the Court deems it appropriate to remand the case to the CA to thresh out its merits.
WHEREFORE, the petition is GRANTED. Accordingly, the Resolutions dated September 21, 2011 and
August 3, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 04575 are hereby REVERSED and SET
ASIDE. CA-G.R. SP No. 04575 is REINSTATED and REMANDED to the CA, which is DIRECTED to
resolve the case on the merits.
SO ORDERED.cralawlawlibrary

In actions filed under Rule 65, the petition shall further indicate the material dates showing when notice of
the judgment or final order or resolution subject thereof was received, when a motion for new trial or
reconsideration, if any, was filed and when notice of the denial thereof was received.

It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the
respondent with the original copy intended for the court indicated as such by the petitioner, and shall be
accompanied by clearly legible duplicate original or certified true copy of the judgment, order, resolution, or
ruling subject thereof, such material portions of the record as are referred to therein, and other documents
relevant or pertinent thereto x x x

xxxx

The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for
the dismissal of the petition. (Emphasis and underscoring supplied)
Admittedly, the Rules require that the petition filed before the CA should include proof of service to the
other party. Essentially, the purpose of this rule is to apprise such party of the pendency of an action in the
CA. Thus, if such party had already been notified of the same and had even participated in the proceedings,
such purpose would have already been served.

Considering that in this case, the CA had already issued a Resolution dated November 4, 2009 directing
EDC to file a comment which the latter had complied with, it cannot be denied that EDC was already aware
of the certiorari proceedings before the CA and that jurisdiction had been acquired over its person. The CA,
therefore, should have brushed aside the Province of Leyte's procedural mishap and resolved the case on the
merits in the interest of substantial justice. The Court's pronouncement in Barra v. Civil Service
Commission27 is instructive on this matter:chanRoblesvirtualLawlibrary
Courts should not be unduly strict in cases involving procedural lapses that do not really impair the proper
administration of justice. Since litigation is not a game of technicalities, every litigant should be afforded the
amplest opportunity for the proper and just determination of his case, free from the constraints of
technicalities. Procedural rules are mere tools designed to facilitate the attainment of justice, and even the
Rules of Court expressly mandates that "it shall be liberally construed in order to promote their objective of
securing a just, speedy and inexpensive disposition of every action and proceeding. 28

236
 EN BANC
G.R. No. 207145 July 28, 2015
GIL G. CAWAD, MARIO BENEDICT P. GALON, DOMINGO E. LUSAYA, JEAN V.
APOLINARES, MA. LUISA S. OREZCA, JULIO R. GARCIA, NESTOR M. INTIA, RUBEN C.
CALIWATAN, ADOLFO Q. ROSALES, MA. LUISA NAVARRO, and the PHILIPPINE PUBLIC
HEALTH ASSOCIATION, INC., Petitioners,
vs.
FLORENCIO B. ABAD, in his capacity as Secretary of the Department of Budget and Management
(DBM); ENRIQUE T. ONA, in his capacity as Secretary of the Department of Health (DOH); and
FRANCISCO T. DUQUE III, in his capacity as Chairman of the Civil Service Commission
(CSC), Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for certiorari and prohibition under Rule 65 of the Rules of Court filed by the
officers and members of the Philippine Public Health Association, Inc. (PPHAI) assailing the validity of
Joint Circular No. 11dated November 29, 2012 of the Department of Budget and Management (DBM) and
the Department of Health (DOH) as well as Item 6.5 of the Joint Circular 2 dated September 3, 2012 of the
DBM and the Civil Service Commission (CSC).
The antecedent facts are as follows:
On March 26, 1992, Republic Act (RA) No. 7305, otherwise known as The Magna Carta of Public Health
Workerswas signed into law in order to promote the social and economic well-being of health workers, their
living and working conditions and terms of employment, to develop their skills and capabilities to be better
equipped to deliver health projects and programs, and to encourage those with proper qualifications and
excellent abilities to join and remain in government service.3 Accordingly, public health workers (PHWs)
were granted the following allowances and benefits, among others:
Section 20. Additional Compensation. - Notwithstanding Section 12 of Republic Act No. 6758, public
health workers shall receive the following allowances: hazard allowance, subsistence allowance, longevity
pay, laundry allowance and remote assignment allowance.
Section 21. Hazard Allowance. - Public health workers in hospitals, sanitaria, rural health units, main
health centers, health infirmaries, barangay health stations, clinics and other health-related establishments
located in difficult areas, strife-torn or embattled areas, distressed or isolated stations, prisons camps, mental
hospitals, radiation exposed clinics, laboratories or disease-infested areas or in areas declared under state of
calamity or emergency for the duration thereof which expose them to great danger, contagion, radiation,
volcanic activity/eruption, occupational risks or perils to life as determined by the Secretary of Health or the
Head of the unit with the approval of the Secretary of Health, shall be compensated hazard allowances
equivalent to at least twenty-five percent (25%) of the monthly basic salary of health workers
receiving salary grade 19 and below, and five percent (5%) for health workers with<="" b="">
237
Section 22. Subsistence Allowance. - Public health workers who are required to render service within the
premises of hospitals, sanitaria, health infirmaries, main health centers, rural health units and barangay
health stations, or clinics, and other health-related establishments in order to make their services available at
any and all times, shall be entitled to full subsistence allowance of three (3) meals which may be
computed in accordance with prevailing circumstances as determined by the Secretary of Health in
consultation with the Management-Health Worker's Consultative Councils, as established under Section 33
of this Act: Provided, That representation and travel allowance shall be given to rural health physicians as
enjoyed by municipal agriculturists, municipal planning and development officers and budget officers.
Section 23. Longevity Pay.- A monthly longevity pay equivalent to five percent (5%)of the monthly basic
pay shall be paid to a health worker for every five (5) years of continuous, efficient and meritorious
services rendered as certified by the chief of office concerned, commencing with the service after the
approval of this Act.4
Pursuant to Section 355 of the Magna Carta, the Secretary of Health promulgated its Implementing Rules
and Regulations (IRR) in July 1992. Thereafter, in November 1999, the DOH, in collaboration with various
government agencies and health workers' organizations, promulgated a Revised IRR consolidating all
additional and clarificatory rules issued by the former Secretaries of Health dating back from the effectivity
of the Magna Carta. The pertinent provisions of said Revised IRR provide:
6.3. Longevity Pay.- A monthly longevity pay equivalent to five percent (5%)of the present monthly basic
pay shall be paid to public health workers for every five (5) years of continuous, efficient and meritorious
services rendered as certified by the Head of Agency/Local Chief Executives commencing after the approval
of the Act. (April 17, 1992)
xxxx
7.1.1. Eligibility to Receive Hazard Pay.- All public health workers covered under RA 7305 are eligible to
receive hazard pay when the nature of their work exposes them to high risk/low risk hazards for at least fifty
percent (50%) of their working hours as determined and approved by the Secretary of Health or his
authorized representatives.
xxxx
7.2.1. Eligibility for Subsistence Allowance
a. All public health workers covered under RA 7305 are eligible to receive full subsistence
allowance as long as they render actual duty.
b. Public Health Workers shall be entitled to full Subsistence Allowance of three (3) meals which
may be computed in accordance with prevailing circumstances as determined by the Secretary of
Health in consultation with the Management-Health Workers Consultative Council, as established
under Section 33 of the Act.
c. Those public health workers who are out of station shall be entitled to per diems in place of
Subsistence Allowance. Subsistence Allowance may also be commuted.
 xxxx
7.2.3 Rates of Subsistence Allowance
a. Subsistence allowance shall be implemented at not less than Ph₱50.00 per day or Ph₱1,500.00
per month as certified by head of agency.
xxxx
d. Part-time public health workers/consultants are entitled to one-half (1/2)of the prescribed rates
received by full-time public health workers.6
On July 28, 2008, the Fourteenth Congress issued Joint Resolution No. 4, entitled Joint Resolution
Authorizing the President of the Philippines to Modify the Compensation and Position Classification System
of Civilian Personnel and the Base Pay Schedule of Military and Uniformed Personnel in the Government,
and for other Purposes, approved by then President Gloria Macapagal-Arroyo on June 17,2009, which
provided for certain amendments in the Magna Carta and its IRR.
On September 3, 2012, respondents DBM and CSC issued one of the two assailed issuances, DBM-CSC
Joint Circular No. 1, Series of 2012, to prescribe the rules on the grant of Step Increments due to meritorious
performance and Step Increment due to length of service.7 Specifically, it provided that "an official or
employee authorized to be granted Longevity Pay under an existing law is not eligible for the grant of Step
Increment due to length of service."8 Shortly thereafter, on November29, 2012, respondents DBM and DOH
then circulated the other assailed issuance, DBM-DOH Joint Circular No. 1, Series of 2012, the relevant
provisions of which state:
7.0. Hazard Pay. - Hazard pay is an additional compensation for performing hazardous duties and for
enduring physical hardships in the course of performance of duties.
As a general compensation policy, and in line with Section 21 of R. A. No. 7305, Hazard Pay may be
granted to PHWs only if the nature of the duties and responsibilities of their positions, their actual services,
and location of work expose them to great danger, occupational risks, perils of life, and physical hardships;
and only during periods of actual exposure to hazards and hardships.
xxxx
8.3 The Subsistence Allowance shall be ₱50for each day of actual full-time service, or ₱25for each day of
actual part-time service.
xxxx
9.0 Longevity Pay (LP)
238
9.1 Pursuant to Section 23 of R.A. No. 7305, a PHW may be granted LP at 5% of his/her current monthly
basic salary, in recognition of every 5 years of continuous, efficient, and meritorious services rendered as
PHW. The grant thereof is based on the following criteria:
9.1.1 The PHW holds a position in the agency plantilla of regular positions; and
9.1.2 He/She has rendered at least satisfactory performance and has not been found guilty of any
administrative or criminal case within all rating periods covered by the 5-year period.
In a letter9 dated January 23, 2013 addressed to respondents Secretary of Budget and Management and
Secretary of Health, petitioners expressed their opposition to the Joint Circular cited above on the ground
that the same diminishes the benefits granted by the Magna Carta to PHWs.
Unsatisfied, petitioners, on May 30, 2013, filed the instant petition raising the following issues:
I.
WHETHER RESPONDENTS ENRIQUE T. ONA AND FLORENCIO B. ABAD ACTED WITH GRAVE
ABUSE OF DISCRETION AND VIOLATED SUBSTANTIVE DUE PROCESS WHEN THEY ISSUED
DBM-DOH JOINT CIRCULAR NO. 1, S. 2012 WHICH:
A) MADE THE PAYMENT OF HAZARD PAY DEPENDENT ON THE ACTUAL DAYS OF
EXPOSURE TO THE RISK INVOLVED;
B) ALLOWED PAYMENT OF SUBSISTENCE ALLOWANCE AT ₱50 FOR EACH DAY OF
ACTUAL FULL-TIME SERVICE OR ₱25 FOR EACH DAY OF ACTUAL PART-TIME
SERVICE WITHOUT CONSIDERATION OF THE PREVAILING CIRCUMSTANCES AS
DETERMINED BY THE SECRETARY OF HEALTH IN CONSULTATION WITH THE
MANAGEMENT HEALTH WORKERS' CONSULTATIVE COUNCILS;
C) REQUIRED THAT LONGEVITY PAY BE GRANTED ONLY TO PHWs WHO HOLD
PLANTILLA AND REGULAR POSITIONS; AND
D) MADE THE JOINT CIRCULAR EFFECTIVE ON JANUARY 1, 2013, BARELY THREE (3)
DAYS AFTER IT WAS PUBLISHED IN A NEWSPAPER OF GENERAL CIRCULATION ON
DECEMBER 29, 2012, IN VIOLATION OF THE RULES ON PUBLICATION.
II.
WHETHER RESPONDENTS FRANCISCO T. DUQUE AND FLORENCIO B. ABAD ACTED WITH
GRAVE ABUSE OF DISCRETION WHEN THEY ISSUED DBM-CSC JOINT CIRCULAR NO. 1, S.
2012 DATED SEPTEMBER 2, 2012 WHICH PROVIDED THAT AN OFFICIAL OR EMPLOYEE
ENTITLED TO LONGEVITY PAY UNDER EXISTING LAW SHALL NO LONGER BE GRANTED
STEP INCREMENT DUE TO LENGTH OF SERVICE.
 III.
WHETHER RESPONDENTS' ISSUANCE OF DBM-DOH JOINT CIRCULAR NO. 1, S. 2012 IS NULL
AND VOID FOR BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY ADMINISTRATIVE
BODIES WHEN RESPONDENT ONA ALLOWED RESPONDENT ABAD TOSIGNIFICANTLY
SHARE THE POWER TO FORMULATE AND PREPARE THE NECESSARY RULES AND
REGULATIONS TO IMPLEMENT THE PROVISIONS OF THE MAGNA CARTA.
IV.
WHETHER RESPONDENT ONA WAS REMISS IN IMPLEMENTING THE MANDATE OF THE
MAGNA CARTA WHEN HE DID NOT INCLUDE THE MAGNA CARTA BENEFITS IN THE
DEPARTMENT'S YEARLY BUDGET.
V.
WHETHER RESPONDENTS' ISSUANCE OF DBM-DOH JOINT CIRCULAR NO. 1, S. 2012 IS NULL
AND VOID FOR BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY ADMINISTRATIVE
BODIES WHEN THE SAME WAS ISSUED SANS CONSULTATION WITH PROFESSIONAL AND
HEALTH WORKERS' ORGANZATIONS AND UNIONS.
Petitioners contend that respondents acted with grave abuse of discretion when they issued DBM-DOH Joint
Circular No. 1, Series of 2012 and DBM-CSC Joint Circular No. 1, Series of 2012 which prescribe certain
requirements on the grant of benefits that are not otherwise required by RA No. 7305. Specifically,
petitioners assert that the DBM-DOH Joint Circular grants the payment of Hazard Pay only if the nature of
the PHWs' duties expose them to danger when RA No. 7305 does not make any qualification. They likewise
claim that said circular unduly fixes Subsistence Allowance at ₱50 for each day of full-time service and ₱25
for part-time service which are not in accordance with prevailing circumstances determined by the Secretary
of Health as required by RA No. 7305. Moreover, petitioners fault respondents for the premature effectivity
of the DBM-DOH Joint Circular which they believe should have been on January 29, 2012 and not on
January 1, 2012. As to the grant of Longevity Pay, petitioners posit that the same was wrongfully granted
only to PHWs holding regular plantilla positions. Petitioners likewise criticize the DBM-CSC Joint Circular
insofar as it withheld the Step Increment due to length of service from those who are already being granted
Longevity Pay. As a result, petitioners claim that the subject circulars are void for being an undue exercise
of legislative power by administrative bodies.
In their Comment, respondents, through the Solicitor General, refute petitioners' allegations in stating that
the assailed circulars were issued within the scope of their authority, and are therefore valid and binding.
They also assert the authority of Joint Resolution No. 4, Series of 2009, approved by the President, in
accordance with the prescribed procedure. Moreover, respondents question the remedies of Certiorari and
Prohibition used by petitioners for the assailed circulars were done in the exercise of their quasi-legislative,
and not of their judicial or quasi-judicial functions.
The petition is partly meritorious.
239
At the outset, the petition for certiorari and prohibition filed by petitioners is not the appropriate remedy to
assail the validity of respondents' circulars. Sections 1 and 2 of Rule 65 of the Rules of Court provide:
RULE 65
CERTIORARI, PROHIBITION AND MANDAMUS
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, or 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.
xxxx
Sec. 2. Petition for Prohibition. - When the proceedings of any tribunal, corporation, board, officer or
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its
jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no
appeal or any other 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 commanding the respondent to desist from further proceedings in the action or matter
specified therein, or otherwise granting such incidental reliefs as law and justice may require. 10
Thus, on the one hand, certiorari as a special civil action is available only if: (1) it is directed against a
tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer
acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal nor any plain, speedy, and adequate remedy in the ordinary course of
law.11
On the other hand, prohibition is available only if: (1) it is directed against a tribunal, corporation, board,
officer, or person exercising functions, judicial, quasi-judicial, or ministerial; (2) the tribunal, corporation,
board or person acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction; and (3) there is no appeal or any other plain, speedy, and adequate remedy in
the ordinary course of law.12 Based on the foregoing, this Court has consistently reiterated that petitions for
certiorari and prohibition may be invoked only against tribunals, corporations, boards, officers, or persons
exercising judicial, quasi-judicial or ministerial functions, and not against their exercise of legislative or
quasi-legislative functions.13
Judicial functions involve the power to determine what the law is and what the legal rights of the parties are,
and then undertaking to determine these questions and adjudicate upon the rights of the parties. 14 Quasi
judicial functions apply to the actions and discretion of public administrative officers or bodies required to
investigate facts, hold hearings, and draw conclusions from them as a basis for their official action, in their
exercise of discretion of a judicial nature.15 Ministerial functions are those which an officer or tribunal
performs in the context of a given set of facts, in a prescribed manner and without regard to the exercise of
his own judgment upon the propriety or impropriety of the act done. 16
Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a
law that gives rise to some specific rights under which adverse claims are made, and the controversy ensuing
therefrom is brought before a tribunal, board, or officer clothed with authority to determine the law and
adjudicate the respective rights of the contending parties.17 In this case, respondents did not act in any
judicial, quasi-judicial, or ministerial capacity in their issuance of the assailed joint circulars. In issuing and
implementing the subject circulars, respondents were not called upon to adjudicate the rights of contending
parties to exercise, in any manner, discretion of a judicial nature. The issuance and enforcement by the
Secretaries of the DBM, CSC and DOH of the questioned joint circulars were done in the exercise of their
quasi-legislative and administrative functions. It was in the nature of subordinate legislation, promulgated by
them in their exercise of delegated power. Quasi-legislative power is exercised by administrative agencies
through the promulgation of rules and regulations within the confines of the granting statute and the doctrine
of non-delegation of powers from the separation of the branches of the government. 18
Based on the foregoing, certiorari and prohibition do not lie against herein respondents' issuances. It is
beyond the province of certiorari to declare the aforesaid administrative issuances illegal because petitions
for certiorari seek solely to correct defects in jurisdiction, and not to correct just any error committed by a
court, board, or officer exercising judicial or quasi-judicial functions unless such court, board, or officer
thereby acts without or in excess of jurisdiction or with such grave abuse of discretion amounting to lack of
jurisdiction.19
It is likewise beyond the territory of a writ of prohibition since generally, the purpose of the same is to keep
a lower court within the limits of its jurisdiction in order to maintain the administration of justice in orderly
channels. It affords relief against usurpation of jurisdiction by an inferior court, or when, in the exercise of
jurisdiction, the inferior court transgresses the bounds prescribed by the law, or where there is no adequate
remedy available in the ordinary course of law.20
Be that as it may, We proceed to discuss the substantive issues raised in the petition in order to finally
resolve the doubt over the Joint Circulars' validity. For proper guidance, the pressing issue of whether or not
the joint circulars regulating the salaries and benefits relied upon by public health workers were tainted with
grave abuse of discretion rightly deserves its prompt resolution. With respect to the infirmities of the DBM-
DOH Joint Circular raised in the petition, they cannot be said to have been issued with grave abuse of
discretion for not only are they reasonable, they were likewise issued well within the scope of authority
granted to the respondents. In fact, as may be gathered from prior issuances on the matter, the circular did
not make any substantial deviation therefrom, but actually remained consistent with, and germane to, the
purposes of the law.
First, the qualification imposed by the DBM-DOH Joint Circular granting the payment of Hazard Pay only if
the nature of PHWs' duties expose them to danger and depending on whether the risk involved is high or
low was merely derived from Section 7.1.1 of the Revised IRR of RA No. 7305, duly promulgated by the
DOH in collaboration with various government health agencies and health workers' organizations in
November 1999, to wit:
SECTION 7.1.1. Eligibility to Receive Hazard Pay. - All public health workers covered under RA 7305 are
eligible to receive hazard pay when the nature of their work exposes them to high risk/low risk hazards for at
least fifty percent (50%) of their working hours as determined and approved by the Secretary of Health or
his authorized representatives.21
240
Second, fixing the Subsistence Allowance at ₱50 for each day of full-time service and ₱25 for part-time
service was also merely a reiteration of the limits prescribed by the Revised IRR, validly issued by the
Secretary of Health pursuant to Section 3522 of RA No. 7305, the pertinent portions of which states:
Section 7.2.3 Rates of Subsistence Allowance
a. Subsistence allowance shall be implemented at not less than Ph₱50.00 per day or Ph₱1,500.00 per month
as certified by head of agency.
xxxx
d. Part-time public health workers/consultants are entitled to one-half (1/2)of the prescribed rates received
by full-time public health workers.
Third, the condition imposed by the DBM-DOH Joint Circular granting longevity pay only to those PHWs
holding regular plantilla positions merely implements the qualification imposed by the Revised IRR which
provides:
6.3. Longevity Pay. - A monthly longevity pay equivalent to five percent (5%) of the present monthly basic
pay shall be paid to public health workers for every five (5) years of continuous, efficient and meritorious
services rendered as certified by the Head of Agency/Local Chief Executives commencing after the approval
of the Act. (April 17, 1992)
6.3.1. Criteria for Efficient and Meritorious Service A Public Worker shall have:
a. At least a satisfactory performance rating within the rating period.
b. Not been found guilty of any administrative or criminal case within the rating period.
As can be gleaned from the aforequoted provision, petitioners failed to show any real inconsistency in
granting longevity pay to PHWs holding regular plantilla positions. Not only are they based on the same
premise, but the intent of longevity pay, which is paid to workers for every five (5) years of continuous,
efficient and meritorious services, necessarily coincides with that of regularization. Thus, the assailed
circular cannot be invalidated for its issuance is consistent with, and germane to, the purposes of the law.
Anent petitioners' contention that the DBM-DOH Joint Circular is null and void for its failure to comply
with Section 3523 of RA No. 7305 providing that its implementing rules shall take effect thirty (30) days
after publication in a newspaper of general circulation, as well as its failure to file a copy of the same with
the University of the Philippines Law Center-Office of the National Administrative Register (UP Law
Center-ONAR), jurisprudence as well as the circumstances of this case dictate otherwise.
Indeed, publication, as a basic postulate of procedural due process, is required by law in order for
administrative rules and regulations to be effective.24 There are, however, several exceptions, one of which
are interpretative regulations which "need nothing further than their bare issuance for they give no real
consequence more than what the law itself has already prescribed."25 These regulations need not be
published for they add nothing to the law and do not affect substantial rights of any person. 26
Thus, in Association of Southern Tagalog Electric Cooperatives, et. al. v. Energy Regulatory Commission
(ERC),27wherein several orders issued by the ERC were sought to be invalidated for lack of publication and
non-submission of copies thereof to the UP Law Center - ONAR, it has been held that since they merely
interpret RA No. 7832 and its IRR, particularly on the computation of the cost of purchased power, without
modifying, amending or supplanting the same, they cannot be rendered ineffective, to wit:
When the policy guidelines of the ERC directed the exclusion of discounts extended by power suppliers in
the computation of the cost of purchased power, the guidelines merely affirmed the plain and unambiguous
meaning of "cost" in Section 5, Rule IX of the IRR of R.A. No. 7832."Cost" is an item of outlay, and must
therefore exclude discounts since these are "not amounts paid or charged for the sale of electricity, but are
reductions in rates.
xxxx
Thus, the policy guidelines of the ERC on the treatment of discounts extended by power suppliers "give no
real consequence more than what the law itself has already prescribed." Publication is not necessary for the
effectivity of the policy guidelines.
As interpretative regulations, the policy guidelines of the ERC on the treatment of discounts extended by
power suppliers are also not required to be filed with the U.P. Law Center in order to be effective. Section 4,
Chapter 2, Book VII of the Administrative Code of 1987 requires every rule adopted by an agency to be
filed with the U.P. Law Center to be effective. However, in Board of Trustees of the Government Service
Insurance System v. Velasco, this Court pronounced that "not all rules and regulations adopted by every
government agency are to be filed with the UP Law Center." Interpretative regulations and those merely
internal in nature are not required to be filed with the U.P. Law Center. Paragraph 9 (a) of the Guidelines for
Receiving and Publication of Rules and Regulations Filed with the U.P. Law Center states:
9. Rules and Regulations which need not be filed with the U.P. Law Center, shall, among others, include but
not be limited to, the following:
a. Those which are interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the Administrative agency and not the public.
xxxx
Furthermore, the policy guidelines of the ERC did not create a new obligation and impose a new duty,
nor did it attach a new disability. As previously discussed, the policy guidelines merely interpret R.A.
No. 7832 and its IRR, particularly on the computation of the cost of purchased power. The policy
guidelines did not modify, amend or supplant the IRR.
Similarly, in Republic v. Drugmaker's Laboratories, Inc., 28 the validity of circulars issued by the Food and
Drug Administration (FDA) was upheld in spite of the non-compliance with the publication, prior hearing,
and consultation requirements for they merely implemented the provisions of Administrative Order No. 67,
entitled "Revised Rules and Regulations on Registration of Pharmaceutical Products" issued by the DOH, in
the following wise:
241
A careful scrutiny of the foregoing issuances would reveal that AO 67, s. 1989 is actually the rule that
originally introduced the BA/BE testing requirement as a component of applications for the issuance
of CPRs covering certain pharmaceutical products. As such, it is considered an administrative regulation
- a legislative rule to be exact - issued by the Secretary of Health in consonance with the express authority
granted to him by RA 3720 to implement the statutory mandate that all drugs and devices should first be
registered with the FDA prior to their manufacture and sale. Considering that neither party contested the
validity of its issuance, the Court deems that AO 67, s. 1989 complied with the requirements of prior
hearing, notice, and publication pursuant to the presumption of regularity accorded to the government in the
exercise of its official duties.42
On the other hand, Circular Nos. 1 and 8, s. 1997 cannot be considered as administrative regulations
because they do not: (a) implement a primary legislation by providing the details thereof; (b)
interpret, clarify, or explain existing statutory regulations under which the FDA operates; and/or (c)
ascertain the existence of certain facts or things upon which the enforcement of RA 3720 depends. In
fact, the only purpose of these circulars is for the FDA to administer and supervise the
implementation of the provisions of AO 67, s. 1989, including those covering the BA/BE testing
requirement, consistent with and pursuant to RA 3720.43 Therefore, the FDA has sufficient authority
to issue the said circulars and since they would not affect the substantive rights of the parties that they
seek to govern - as they are not, strictly speaking, administrative regulations in the first place - no
prior hearing, consultation, and publication are needed for their validity.
In this case, the DBM-DOH Joint Circular in question gives no real consequence more than what the law
itself had already prescribed. As previously discussed, the qualification of actual exposure to danger for the
PHW's entitlement to hazard pay, the rates of ₱50 and ₱25 subsistence allowance, and the entitlement to
longevity pay on the basis of PHW's status in the plantilla of regular positions were already prescribed and
authorized by pre-existing law. There is really no new obligation or duty imposed by the subject circular for
it merely reiterated those embodied in RA No. 7305 and its Revised IRR. The Joint Circular did not modify,
amend nor supplant the Revised IRR, the validity of which is undisputed. Consequently, whether it was duly
published and filed with the UP Law Center - ONAR is necessarily immaterial to its validity because in
view of the pronouncements above, interpretative regulations, such as the DBM-DOH circular herein, need
not be published nor filed with the UP Law Center - ONAR in order to be effective. Neither is prior hearing
or consultation mandatory.
Nevertheless, it bears stressing that in spite of the immateriality of the publication requirement in this case,
and even assuming the necessity of the same, its basic objective in informing the public of the contents of
the law was sufficiently accomplished when the DBM-DOH Joint Circular was published in the Philippine
Star, a newspaper of general circulation, on December 29, 2012. 29
As to petitioners' allegation of grave abuse of discretion on the part of respondent DOH Secretary in failing
to include the Magna Carta benefits in his department's yearly budget, the same is belied by the fact that
petitioners themselves specifically provided in their petition an account of the amounts allocated for the
same in the years 2012 and 2013.30
Based on the foregoing, it must be recalled that administrative regulations, such as the DBM-DOH Joint
Circular herein, enacted by administrative agencies to implement and interpret the law they are entrusted to
enforce are entitled to great respect.31 They partake of the nature of a statute and are just as binding as if they
have been written in the statute itself. As such, administrative regulations have the force and effect of law
and enjoy the presumption of legality. Unless and until they are overcome by sufficient evidence showing
that they exceeded the bounds of the law,32 their validity and legality must be upheld.
Thus, notwithstanding the contention that the Joint Resolution No. 4 promulgated by Congress cannot be a
proper source of delegated power, the subject Circular was nevertheless issued well within the scope of
authority granted to the respondents. The issue in this case is not whether the Joint Resolution No. 4 can
become law and, consequently, authorize the issuance of the regulation in question, but whether the circular
can be struck down as invalid for being tainted with grave abuse of discretion. Regardless, therefore, of the
validity or invalidity of Joint Resolution No. 4, the DBMDOH Joint Circular assailed herein cannot be said
to have been arbitrarily or capriciously issued for being consistent with prior issuances duly promulgated
pursuant to valid and binding law.
Distinction must be made, however, with respect to the DBM-CSC Joint Circular, the contested provision of
which states:
6.5 An official or employee authorized to be granted Longevity Pay under an existing law is not eligible for
the grant of Step Increment Due to Length of Service.
A review of RA No. 7305 and its Revised IRR reveals that the law does not similarly impose such condition
on the grant of longevity pay to PHWs in the government service. As such, the DBM-CSC Joint Circular
effectively created a new imposition which was not otherwise stipulated in the law it sought to interpret.
Consequently, the same exception granted to the DBM-DOH Joint Circular cannot be applied to the DBM-
CSC Joint Circular insofar as the requirements on publication and submission with the UP Law Center -
ONAR are concerned. Thus, while it was well within the authority of the respondents to issue rules
regulating the grant of step increments as provided by RA No. 6758, otherwise known as the Compensation
and Position Classification Act of 1989, which pertinently states:
Section 13. Pay Adjustments. - Paragraphs (b) and (c), Section 15 of Presidential Decree No. 985 are hereby
amended to read as follows:
xxxx
(c) Step Increments- Effective January 1, 1990 step increments shall be granted based on merit and/or length
of service in accordance with rules and regulations that will be promulgated jointly by the DBM and the
Civil Service Commission,
and while it was duly published in the Philippine Star, a newspaper of general circulation, on September 15,
2012,33the DBM-CSC Joint Circular remains unenforceable for the failure of respondents to file the same
with the UP Law Center - ONAR.34 Moreover, insofar as the DBM-DOH Joint Circular similarly withholds
the Step Increment due to length of service from those who are already being granted Longevity Pay, the
same must likewise be declared unenforceable.[35
Note also that the DBM-DOH Joint Circular must further be invalidated insofar as it lowers the hazard pay
at rates below the minimum prescribed by Section 21 of RA No. 7305 and Section 7.1.5 (a) of its Revised
IRR as follows:
242
SEC. 21. Hazard Allowance. - Public health worker in hospitals, sanitaria, rural health units, main centers,
health infirmaries, barangay health stations, clinics and other health-related establishments located in
difficult areas, strife-torn or embattled areas, distresses or isolated stations, prisons camps, mental hospitals,
radiation-exposed clinics, laboratories or disease-infested areas or in areas declared under state of calamity
or emergency for the duration thereof which expose them to great danger, contagion, radiation, volcanic
activity/eruption occupational risks or perils to life as determined by the Secretary of Health or the Head of
the unit with the approval of the Secretary of Health, shall be compensated hazard allowance equivalent to at
least twenty-five percent (25%)of the monthly basic salary of health workers receiving salary grade 19 and
below, and five percent (5%) for health workers with salary grade 20 and above.
xxxx
7.1.5. Rates of Hazard Pay
a. Public health workers shall be compensated hazard allowances equivalent to at least twenty five (25%)of
the monthly basic salary of health workers, receiving salary grade 19 and below, and five percent (5%)for
health workers with salary grade 20 and above. This may be granted on a monthly, quarterly or annual basis.
It is evident from the foregoing provisions that the rates of hazard pay must be at least25% of the basic
monthly salary of PWHs receiving salary grade 19 and below, and 5% receiving salary grade 20 and above.
As such, RA No. 7305 and its implementing rules noticeably prescribe the minimum rates of hazard pay due
all PHWs in the government, as is clear in the self-explanatory phrase "at least" used in both the law and the
rules.36 Thus, the following rates embodied in Section 7.2 of DBM-DOH Joint Circular must be struck down
as invalid for being contrary to the mandate of RA No. 7305 and its Revised IRR:
7.2.1 For PHWs whose positions are at SG-19 and below, Hazard Pay shall be based on the degree of
exposure to high risk or low risk hazards, as specified in sub-items 7 .1.1 and 7 .1.2 above, and the number
of workdays of actual exposure over 22 workdays in a month, at rates not to exceed 25% of monthly basic
salary. In case of exposure to both high risk and low risk hazards, the Hazard Pay for the month shall be
based on only one risk level, whichever is more advantageous to the PHW.
7.2.2 PHWs whose positions are at SG-20 and above may be entitled to Hazard Pay at 5% of their monthly
basic salaries for all days of exposure to high risk and/or low risk hazards. However, those exposed to high
risk hazards for 12 or more days in a month may be entitled to a fixed amount of ₱4,989.75 per month.
Rates of Hazard Pay
Actual Exposure/ High Risk Low Risk
Level of Risk
12 or more days 25% of monthly basic salary 14% of monthly basic salary
6 to 11 days 14% of monthly basic salary 8% of monthly basic salary
Less than 6 days 8% monthly basic salary 5% of monthly basic salary
WHEREFORE, premises considered, the instant petition is PARTLY GRANTED. The DBM-DOH Joint
Circular, insofar as it lowers the hazard pay at rates below the minimum prescribed by Section 21 of RA No.
7305 and Section 7.1.5 (a) of its Revised IRR, is declared INVALID. The DBM-CSC Joint Circular, insofar
as it provides that an official or employee authorized to be granted Longevity Pay under an existing law is
not eligible for the grant of Step Increment Due to Length of Service, is declared UNENFORCEABLE. The
validity, however, of the DBM-DOH Joint Circular as to the qualification of actual exposure to danger for
the PHW's entitlement to hazard pay, the rates of ₱50 and ₱25 subsistence allowance, and the entitlement to
longevity pay on the basis of the PHW' s status in the plantilla of regular positions, is UPHELD.

SO ORDERED.

243
244
 THIRD DIVISION
G.R. No. 191424 August 7, 2013
ALFEO D. VIVAS, ON HIS BEHALF AND ON BEHALF OF THE SHAREHOLDERS OF
EUROCREDIT COMMUNITY BANK, PETITIONER,
vs.
THE MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS AND THE PHILIPPINE
DEPOSIT INSURANCE CORPORATION, RESPONDENTS.
DECISION
MENDOZA, J.:
This is a petition for prohibition with prayer for the issuance of a status quo ante order or writ of preliminary
injunction ordering the respondents to desist from closing EuroCredit Community Bank, Incorporated
(ECBI) and from pursuing the receivership thereof. The petition likewise prays that the management and
operation of ECBI be restored to its Board of Directors (BOD) and its officers.
The Facts
The Rural Bank of Faire, Incorporated (RBFI) was a duly registered rural banking institution with principal
office in Centro Sur, Sto. Niño, Cagayan. Record shows that the corporate life of RBFI expired on May 31,
2005.1Notwithstanding, petitioner Alfeo D. Vivas (Vivas) and his principals acquired the controlling interest
in RBFI sometime in January 2006. At the initiative of Vivas and the new management team, an internal
audit was conducted on RBFI and results thereof highlighted the dismal operation of the rural bank. In view
of those findings, certain measures calculated to revitalize the bank were allegedly introduced. 2 On
December 8, 2006, the Bangko Sentral ng Pilipinas (BSP) issued the Certificate of Authority extending the
corporate life of RBFI for another fifty (50) years. The BSP also approved the change of its corporate name
to EuroCredit Community Bank, Incorporated, as well as the increase in the number of the members of its
BOD, from five (5) to eleven (11).3
Pursuant to Section 28 of Republic Act (R.A.) No. 7653, otherwise known as The New Central Bank Act,
the Integrated Supervision Department II (ISD II) of the BSP conducted a general examination on ECBI
with the cut-off date of December 31, 2007. Shortly after the completion of the general examination, an exit
conference was held on March 27, 2008 at the BSP during which the BSP officials and examiners apprised
Vivas, the Chairman and President of ECBI, as well as the other bank officers and members of its BOD, of
the advance findings noted during the said examination. The ECBI submitted its comments on BSP’s
consolidated findings and risk asset classification through a letter, dated April 8, 2008. 4
Sometime in April 2008, the examiners from the Department of Loans and Credit of the BSP arrived at the
ECBI and cancelled the rediscounting line of the bank. Vivas appealed the cancellation to BSP. 5 Thereafter,
the Monetary Board (MB) issued Resolution No. 1255, dated September 25, 2008, placing ECBI under
Prompt Corrective Action (PCA) framework because of the following serious findings and supervisory
concerns noted during the general examination: 1] negative capital of ?14.674 million and capital adequacy
ratio of negative 18.42%; 2] CAMEL (Capital Asset Management Earnings Liquidity) composite rating of
"2" with a Management component rating of "1"; and 3] serious supervisory concerns particularly on
activities deemed unsafe or unsound.6 Vivas claimed that the BSP took the above courses of action due to
the joint influence exerted by a certain hostile shareholder and a former BSP examiner.7
Through its letter, dated September 30, 2008, the BSP furnished ECBI with a copy of the Report of
Examination (ROE) as of December 31, 2007. In addition, the BSP directed the bank’s BOD and senior
management to: 1] infuse fresh capital of ?22.643 million; 2] book the amount of ?28.563 million
representing unbooked valuation reserves on classified loans and other risks assets on or before October 31,
2008; and 3] take appropriate action necessary to address the violations/exceptions noted in the
examination.8
Vivas moved for a reconsideration of Resolution No. 1255 on the grounds of non-observance of due process
and arbitrariness. The ISD II, on several instances, had invited the BOD of ECBI to discuss matters
pertaining to the placement of the bank under PCA framework and other supervisory concerns before
245
making the appropriate recommendations to the MB. The proposed meeting, however, did not materialize
due to postponements sought by Vivas.9
In its letter, dated February 20, 2009, the BSP directed ECBI to explain why it transferred the majority
shares of RBFI without securing the prior approval of the MB in apparent violation of Subsection X126.2 of
the Manual of Regulation for Banks (MORB).10 Still in another letter,11 dated March 31, 2009, the ISD II
required ECBI to explain why it did not obtain the prior approval of the BSP anent the establishment and
operation of the bank’s sub-offices.
Also, the scheduled March 31, 2009 general examination of the books, records and general condition of
ECBI with the cut-off date of December 31, 2008, did not push through. According to Vivas, ECBI asked
for the deferment of the examination pending resolution of its appeal before the MB. Vivas believed that he
was being treated unfairly because the letter of authority to examine allegedly contained a clause which
pertained to the Anti-Money Laundering Law and the Bank Secrecy Act.12
The MB, on the other hand, posited that ECBI unjustly refused to allow the BSP examiners from examining
and inspecting its books and records, in violation of Sections 25 and 34 of R.A. No. 7653. In its
letter,13 dated May 8, 2009, the BSP informed ECBI that it was already due for another annual examination
and that the pendency of its appeal before the MB would not prevent the BSP from conducting another one
as mandated by Section 28 of R.A. No. 7653.
In view of ECBI’s refusal to comply with the required examination, the MB issued Resolution No.
726,14 dated May 14, 2009, imposing monetary penalty/fine on ECBI, and referred the matter to the Office
of the Special Investigation (OSI) for the filing of appropriate legal action. The BSP also wrote a
letter,15 dated May 26, 2009, advising ECBI to comply with MB Resolution No. 771, which essentially
required the bank to follow its directives. On May 28, 2009, the ISD II reiterated its demand upon the ECBI
BOD to allow the BSP examiners to conduct a general examination on June 3, 2009.16
In its June 2, 2009 Letter-Reply,17 ECBI asked for another deferment of the examination due to the
pendency of certain unresolved issues subject of its appeal before the MB, and because Vivas was then out
of the country. The ISD II denied ECBI’s request and ordered the general examination to proceed as
previously scheduled.18
Thereafter, the MB issued Resolution No. 823,19 dated June 4, 2009, approving the issuance of a cease and
desist order against ECBI, which enjoined it from pursuing certain acts and transactions that were
considered unsafe or unsound banking practices, and from doing such other acts or transactions constituting
fraud or might result in the dissipation of its assets.
On June 10, 2009, the OSI filed with the Department of Justice (DOJ) a complaint for Estafa Through
Falsification of Commercial Documents against certain officials and employees of ECBI. Meanwhile, the
MB issued Resolution No. 1164,20 dated August 13, 2009, denying the appeal of ECBI from Resolution No.
1255 which placed it under PCA framework. On November 18, 2009, the general examination of the books
and records of ECBI with the cut-off date of September 30, 2009, was commenced and ended in December
2009. Later, the BSP officials and examiners met with the representatives of ECBI, including Vivas, and
discussed their findings.21 On December 7, 2009, the ISD II reminded ECBI of the non-submission of its
financial audit reports for the years 2007 and 2008 with a warning that failure to submit those reports and
the written explanation for such omission shall result in the imposition of a monetary penalty. 22 In a letter,
dated February 1, 2010, the ISD II informed ECBI of MB Resolution No. 1548 which denied its request for
reconsideration of Resolution No. 726.
On March 4, 2010, the MB issued Resolution No. 276 23 placing ECBI under receivership in accordance with
the recommendation of the ISD II which reads:
On the basis of the examination findings as of 30 September 2009 as reported by the Integrated Supervision
Department (ISD) II, in its memorandum dated 17 February 2010, which findings showed that the
Eurocredit Community Bank, Inc. – a Rural Bank (Eurocredit Bank) (a) is unable to pay its liabilities as they
become due in the ordinary course of business; (b) has insufficient realizable assets to meet liabilities; (c)
cannot continue in business without involving probable losses to its depositors and creditors; and (d) has
willfully violated a cease and desist order of the Monetary Board for acts or transactions which are
considered unsafe and unsound banking practices and other acts or transactions constituting fraud or
dissipation of the assets of the institution, and considering the failure of the Board of Directors/management
of Eurocredit Bank to restore the bank’s financial health and viability despite considerable time given to
address the bank’s financial problems, and that the bank had been accorded due process, the Board, in
accordance with Section 30 of Republic Act No. 7653 (The New Central Bank Act), approved the
recommendation of ISD II as follows:
To prohibit the Eurocredit Bank from doing business in the Philippines and to place its assets and affairs
under receivership; and
To designate the Philippine Deposit Insurance Corporation as Receiver of the bank.
Assailing MB Resolution No. 276, Vivas filed this petition for prohibition before this Court, ascribing grave
abuse of discretion to the MB for prohibiting ECBI from continuing its banking business and for placing it
under receivership. The petitioner presents the following
ARGUMENTS:
(a)
It is grave abuse of discretion amounting to loss of jurisdiction to apply the general law embodied in Section
30 of the New Central Bank Act as opposed to the specific law embodied in Sections 11 and 14 of the Rural
Banks Act of 1992.
(b)
Even if it assumed that Section 30 of the New Central Bank Act is applicable, it is still the gravest abuse of
discretion amounting to lack or excess of jurisdiction to execute the law with manifest arbitrariness, abuse of
discretion, and bad faith, violation of constitutional rights and to further execute a mandate well in excess of
its parameters.
(c)
The power delegated in favor of the Bangko Sentral ng Pilipinas to place rural banks under receiverships is
unconstitutional for being a diminution or invasion of the powers of the Supreme Court, in violation of
Section 2, Article VIII of the Philippine Constitution.24
Vivas submits that the respondents committed grave abuse of discretion when they erroneously applied
Section 30 of R.A. No. 7653, instead of Sections 11 and 14 of the Rural Bank Act of 1992 or R.A. No. 7353.
He argues that despite the deficiencies, inadequacies and oversights in the conduct of the affairs of ECBI, it
has not committed any financial fraud and, hence, its placement under receivership was unwarranted and
improper. He posits that, instead, the BSP should have taken over the management of ECBI and extended
loans to the financially distrained bank pursuant to Sections 11 and 14 of R.A. No. 7353 because the BSP’s
power is limited only to supervision and management take-over of banks.
He contends that the implementation of the questioned resolution was tainted with arbitrariness and bad
faith, stressing that ECBI was placed under receivership without due and prior hearing in violation of his
and the bank’s right to due process. He adds that respondent PDIC actually closed ECBI even in the absence
of any directive to this effect. Lastly, Vivas assails the constitutionality of Section 30 of R.A. No. 7653
claiming that said provision vested upon the BSP the unbridled power to close and place under receivership
a hapless rural bank instead of aiding its financial needs. He is of the view that such power goes way beyond
its constitutional limitation and has transformed the BSP to a sovereign in its own "kingdom of banks."25
The Court’s Ruling
The petition must fail.
Vivas Availed of the Wrong Remedy
To begin with, Vivas availed of the wrong remedy. The MB issued Resolution No. 276, dated March 4,
2010, in the exercise of its power under R.A. No. 7653. Under Section 30 thereof, any act of the MB placing
a bank under conservatorship, receivership or liquidation may not be restrained or set aside except on a
petition for certiorari. Pertinent portions of R.A. 7653 read:
Section 30. –
246
x x x x.
The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final and
executory, and may not be restrained or set aside by the court except on petition for certiorari on the ground
that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack
or excess of jurisdiction. The petition for certiorari may only be filed by the stockholders of record
representing the majority of the capital stock within ten (10) days from receipt by the board of directors of
the institution of the order directing receivership, liquidation or conservatorship.
x x x x. [Emphases supplied]
Prohibition is already unavailing
Granting that a petition for prohibition is allowed, it is already an ineffective remedy under the
circumstances obtaining. Prohibition or a "writ of prohibition" is that process by which a superior court
prevents inferior courts, tribunals, officers, or persons from usurping or exercising a jurisdiction with which
they have not been vested by law, and confines them to the exercise of those powers legally conferred. Its
office is to restrain subordinate courts, tribunals or persons from exercising jurisdiction over matters not
within its cognizance or exceeding its jurisdiction in matters of which it has cognizance. 26 In our
jurisdiction, the rule on prohibition is enshrined in Section 2, Rule 65 of the Rules on Civil Procedure, to
wit:
Sec. 2. Petition for prohibition - When the proceedings of any tribunal, corporation, board, officer or person,
whether exercising judicial, quasi-judicial or ministerial functions, are 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 or any other 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 the
judgment be rendered commanding the respondent to desist from further proceedings in the action or matter
specified therein, or otherwise granting such incidental reliefs as the law and justice require.
x x x x.
Indeed, prohibition is a preventive remedy seeking that a judgment be rendered which would direct the
defendant to desist from continuing with the commission of an act perceived to be illegal. 27 As a rule, the
proper function of a writ of prohibition is to prevent the doing of an act which is about to be done. It is not
intended to provide a remedy for acts already accomplished.28
Though couched in imprecise terms, this petition for prohibition apparently seeks to prevent the acts of
closing of ECBI and placing it under receivership. Resolution No. 276, however, had already been issued by
the MB and the closure of ECBI and its placement under receivership by the PDIC were already
accomplished. Apparently, the remedy of prohibition is no longer appropriate. Settled is the rule that
prohibition does not lie to restrain an act that is already a fait accompli. 29
The Petition Should Have Been Filed in the CA
Even if treated as a petition for certiorari, the petition should have been filed with the CA. Section 4 of Rule
65 reads:
Section 4. When and where petition filed. — The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed,
whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial
of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of
a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial
area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same
is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it
involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these Rules,
the petition shall be filed in and cognizable only by the Court of Appeals. [Emphases supplied]
That the MB is a quasi-judicial agency was already settled and reiterated in the case of Bank of Commerce
v. Planters Development Bank And Bangko Sentral Ng Pilipinas.30
 Doctrine of Hierarchy of Courts
Even in the absence of such provision, the petition is also dismissible because it simply ignored the doctrine
of hierarchy of courts. True, the Court, the CA and the RTC have original concurrent jurisdiction to issue
writs of certiorari, prohibition and mandamus. The concurrence of jurisdiction, however, does not grant the
party seeking any of the extraordinary writs the absolute freedom to file a petition in any court of his choice.
The petitioner has not advanced any special or important reason which would allow a direct resort to this
Court. Under the Rules of Court, a party may directly appeal to this Court only on pure questions of
law.31 In the case at bench, there are certainly factual issues as Vivas is questioning the findings of the
investigating team.
Strict observance of the policy of judicial hierarchy demands that where the issuance of the extraordinary
writs is also within the competence of the CA or the RTC, the special action for the obtainment of such writ
must be presented to either court. As a rule, the Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate lower courts; or where exceptional and compelling
circumstances, such as cases of national interest and with serious implications, justify the availment of the
extraordinary remedy of writ of certiorari, prohibition, or mandamus calling for the exercise of its primary
jurisdiction.32 The judicial policy must be observed to prevent an imposition on the precious time and
attention of the Court.
The MB Committed No Grave Abuse of Discretion
In any event, no grave abuse of discretion can be attributed to the MB for the issuance of the assailed
Resolution No. 276.
Vivas insists that the circumstances of the case warrant the application of Section 11 of R.A. No. 7353,
which provides:
Sec. 11. The power to supervise the operation of any rural bank by the Monetary Board as herein indicated
shall consist in placing limits to the maximum credit allowed to any individual borrower; in prescribing the
interest rate, in determining the loan period and loan procedures, in indicating the manner in which technical
assistance shall be extended to rural banks, in imposing a uniform accounting system and manner of keeping
the accounts and records of rural banks; in instituting periodic surveys of loan and lending procedures,
audits, test-check of cash and other transactions of the rural banks; in conducting training courses for
personnel of rural banks; and, in general, in supervising the business operations of the rural banks.
The Central Bank shall have the power to enforce the laws, orders, instructions, rules and regulations
promulgated by the Monetary Board, applicable to rural banks; to require rural banks, their directors,
officers and agents to conduct and manage the affairs of the rural banks in a lawful and orderly manner; and,
upon proof that the rural bank or its Board of Directors, or officers are conducting and managing the affairs
of the bank in a manner contrary to laws, orders, instructions, rules and regulations promulgated by the
Monetary Board or in a manner substantially prejudicial to the interest of the Government, depositors or
creditors, to take over the management of such bank when specifically authorized to do so by the Monetary
Board after due hearing process until a new board of directors and officers are elected and qualified without
prejudice to the prosecution of the persons responsible for such violations under the provisions of Sections
32, 33 and 34 of Republic Act No. 265, as amended.
x x x x.
The thrust of Vivas’ argument is that ECBI did not commit any financial fraud and, hence, its placement
under receivership was unwarranted and improper. He asserts that, instead, the BSP should have taken over
the management of ECBI and extended loans to the financially distrained bank pursuant to Sections 11 and
14 of R.A. No. 7353 because the BSP’s power is limited only to supervision and management take-over of
banks, and not receivership.
Vivas argues that implementation of the questioned resolution was tainted with arbitrariness and bad faith,
stressing that ECBI was placed under receivership without due and prior hearing, invoking Section 11 of
R.A. No. 7353 which states that the BSP may take over the management of a rural bank after due
247
hearing.33 He adds that because R.A. No. 7353 is a special law, the same should prevail over R.A. No. 7653
which is a general law.
The Court has taken this into account, but it appears from all over the records that ECBI was given every
opportunity to be heard and improve on its financial standing. The records disclose that BSP officials and
examiners met with the representatives of ECBI, including Vivas, and discussed their findings. 34 There were
also reminders that ECBI submit its financial audit reports for the years 2007 and 2008 with a warning that
failure to submit them and a written explanation of such omission shall result in the imposition of a
monetary penalty.35 More importantly, ECBI was heard on its motion for reconsideration. For failure of
ECBI to comply, the MB came out with Resolution No. 1548 denying its request for reconsideration of
Resolution No. 726. Having been heard on its motion for reconsideration, ECBI cannot claim that it was
deprived of its right under the Rural Bank Act.
Close Now, Hear Later
At any rate, if circumstances warrant it, the MB may forbid a bank from doing business and place it under
receivership without prior notice and hearing. Section 30 of R.A. No. 7653 provides, viz:
Sec. 30. Proceedings in Receivership and Liquidation. – Whenever, upon report of the head of the
supervising or examining department, the Monetary Board finds that a bank or quasi-bank:
(a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided,
That this shall not include inability to pay caused by extraordinary demands induced by financial
panic in the banking community;
(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or
(c) cannot continue in business without involving probable losses to its depositors or creditors; or
(d) has wilfully violated a cease and desist order under Section 37 that has become final, involving
acts or transactions which amount to fraud or a dissipation of the assets of the institution; in which
cases, the Monetary Board may summarily and without need for prior hearing forbid the institution
from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation
as receiver of the banking institution. [Emphases supplied.]
x x x x.
Accordingly, there is no conflict which would call for the application of the doctrine that a special law
should prevail over a general law. It must be emphasized that R.A .No. 7653 is a later law and under said
act, the power of the MB over banks, including rural banks, was increased and expanded. The Court, in
several cases, upheld the power of the MB to take over banks without need for prior hearing. It is not
necessary inasmuch as the law entrusts to the MB the appreciation and determination of whether any or all
of the statutory grounds for the closure and receivership of the erring bank are present. The MB, under R.A.
No. 7653, has been invested with more power of closure and placement of a bank under receivership for
insolvency or illiquidity, or because the bank’s continuance in business would probably result in the loss to
depositors or creditors. In the case of Bangko Sentral Ng Pilipinas Monetary Board v. Hon. Antonio-
Valenzuela,36 the Court reiterated the doctrine of "close now, hear later," stating that it was justified as a
measure for the protection of the public interest. Thus:
The "close now, hear later" doctrine has already been justified as a measure for the protection of the public
interest. Swift action is called for on the part of the BSP when it finds that a bank is in dire straits. Unless
adequate and determined efforts are taken by the government against distressed and mismanaged banks,
public faith in the banking system is certain to deteriorate to the prejudice of the national economy itself, not
to mention the losses suffered by the bank depositors, creditors, and stockholders, who all deserve the
protection of the government.37[Emphasis supplied]
In Rural Bank of Buhi, Inc. v. Court of Appeals, 38 the Court also wrote that
x x x due process does not necessarily require a prior hearing; a hearing or an opportunity to be heard may
be subsequent to the closure. One can just imagine the dire consequences of a prior hearing: bank runs
would be the order of the day, resulting in panic and hysteria. In the process, fortunes may be wiped out and
disillusionment will run the gamut of the entire banking community.39
The doctrine is founded on practical and legal considerations to obviate unwarranted dissipation of the running riot. Both tests are intended to prevent a total transference of legislative authority to the delegate,
bank’s assets and as a valid exercise of police power to protect the depositors, creditors, stockholders, and who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative."44
the general public.40 Swift, adequate and determined actions must be taken against financially distressed and In this case, under the two tests, there was no undue delegation of legislative authority in the issuance of
mismanaged banks by government agencies lest the public faith in the banking system deteriorate to the R.A. No. 7653. To address the growing concerns in the banking industry, the legislature has sufficiently
prejudice of the national economy. empowered the MB to effectively monitor and supervise banks and financial institutions and, if
Accordingly, the MB can immediately implement its resolution prohibiting a banking institution to do circumstances warrant, to forbid them to do business, to take over their management or to place them under
business in the Philippines and, thereafter, appoint the PDIC as receiver. The procedure for the involuntary receivership. The legislature has clearly spelled out the reasonable parameters of the power entrusted to the
closure of a bank is summary and expeditious in nature. Such action of the MB shall be final and executory, MB and assigned to it only the manner of enforcing said power. In other words, the MB was given a wide
but may be later subjected to a judicial scrutiny via a petition for certiorari to be filed by the stockholders of discretion and latitude only as to how the law should be implemented in order to attain its objective of
record of the bank representing a majority of the capital stock. Obviously, this procedure is designed to protecting the interest of the public, the banking industry and the economy.
protect the interest of all concerned, that is, the depositors, creditors and stockholders, the bank itself and the WHEREFORE, the petition for prohibition is DENIED.
general public. The protection afforded public interest warrants the exercise of a summary closure. SO ORDERED.
In the case at bench, the ISD II submitted its memorandum, dated February 17, 2010, containing the findings
noted during the general examination conducted on ECBI with the cut-off date of September 30, 2009. The
memorandum underscored the inability of ECBI to pay its liabilities as they would fall due in the usual
course of its business, its liabilities being in excess of the assets held. Also, it was noted that ECBI’s
continued banking operation would most probably result in the incurrence of additional losses to the
prejudice of its depositors and creditors. On top of these, it was found that ECBI had willfully violated the
cease-and-desist order of the MB issued in its June 24, 2009 Resolution, and had disregarded the BSP rules
and directives. For said reasons, the MB was forced to issue the assailed Resolution No. 276 placing ECBI
under receivership. In addition, the MB stressed that it accorded ECBI ample time and opportunity to
address its monetary problem and to restore and improve its financial health and viability but it failed to do
so.
In light of the circumstances obtaining in this case, the application of the corrective measures enunciated in
Section 30 of R.A. No. 7653 was proper and justified. Management take-over under Section 11 of R.A. No.
7353 was no longer feasible considering the financial quagmire that engulfed ECBI showing serious
conditions of insolvency and illiquidity. Besides, placing ECBI under receivership would effectively put a
stop to the further draining of its assets.
No Undue Delegation of Legislative Power
Lastly, the petitioner challenges the constitutionality of Section 30 of R.A. No. 7653, as the legislature
granted the MB a broad and unrestrained power to close and place a financially troubled bank under
receivership. He claims that the said provision was an undue delegation of legislative power. The contention
deserves scant consideration.
Preliminarily, Vivas’ attempt to assail the constitutionality of Section 30 of R.A. No. 7653 constitutes
collateral attack on the said provision of law. Nothing is more settled than the rule that the constitutionality
of a statute cannot be collaterally attacked as constitutionality issues must be pleaded directly and not
collaterally.41 A collateral attack on a presumably valid law is not permissible. Unless a law or rule is
annulled in a direct proceeding, the legal presumption of its validity stands. 42
Be that as it may, there is no violation of the non-delegation of legislative power.1âwphi1 The rationale for
the constitutional proscription is that "legislative discretion as to the substantive contents of the law cannot
be delegated. What can be delegated is the discretion to determine how the law may be enforced, not what
the law shall be. The ascertainment of the latter subject is a prerogative of the legislature. This prerogative
cannot be abdicated or surrendered by the legislature to the delegate." 43
"There are two accepted tests to determine whether or not there is a valid delegation of legislative power,
viz, the completeness test and the sufficient standard test. Under the first test, the law must be complete in
all its terms and conditions when it leaves the legislature such that when it reaches the delegate the only
thing he will have to do is enforce it. Under the sufficient standard test, there must be adequate guidelines or
stations in the law to map out the boundaries of the delegate's authority and prevent the delegation from

248
 EN BANC
G.R. No. 186613 August 27, 2013
ROSENDO R. CORALES, IN HIS OFFICIAL CAPACITY AS MUNICIPAL MAYOR OF
NAGCARLAN, LAGUNA, AND DR. RODOLFO R. ANGELES, IN HIS OFFICIAL CAPACITY AS
MUNICIPAL ADMINISTRATOR OF NAGCARLAN, LAGUNA, PETITIONERS,
vs.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE COMMISSION ON AUDIT, AS
REPRESENTED BY PROVINCIAL STATE AUDITOR OF LAGUNA MAXIMO L.
ANDAL, RESPONDENT.
DECISION
PEREZ, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to nullify the Decision 1 and
Resolution2 dated 15 September 2008 and 20 February 2009, respectively, of the Court of Appeals in CA-
G.R. SP No. 101296 and, in effect, to reinstate the Petition for Prohibition and Mandamus 3 filed by herein
petitioners Rosendo R. Corales (Corales) and Dr. Rodolfo R. Angeles (Dr. Angeles) with the Regional Trial
Court (RTC) of San Pablo City, Laguna. The assailed Decision annulled and set aside the Order 4 dated 17
May 2007 of Branch 32, and the Order5 dated 5 September 2007 of Branch 29, both of the RTC of San
Pablo City, Laguna in Civil Case No. SP-6370 (07), which respectively denied herein respondent Republic
of the Philippines’ (Republic) Motion to Dismiss petitioners’ Petition for Prohibition and the subsequent
Motion for Reconsideration thereof. The Court of Appeals thereby ordered the dismissal of petitioners’
Petition for Prohibition with the court a quo. The questioned Resolution, on the other hand, denied for lack
of merit petitioners’ Motion for Reconsideration of the assailed Decision.
The antecedents, as culled from the records, are as follows:
Petitioner Corales was the duly elected Municipal Mayor of Nagcarlan, Laguna for three (3) consecutive
terms, i.e., the 1998, 2001 and 2004 elections. In his first term as local chief executive, petitioner Corales
appointed petitioner Dr. Angeles to the position of Municipal Administrator, whose appointment was
unanimously approved by the Sangguniang Bayan of Nagcarlan, Laguna (Sangguniang Bayan) per
Resolution No. 98-646 dated 22 July 1998. During his second and third terms as municipal mayor, petitioner
Corales renewed the appointment of petitioner Dr. Angeles. But, on these times, the Sangguniang Bayan per
Resolution No. 2001-0787 dated 12 July 2001 and 26 subsequent Resolutions, disapproved petitioner Dr.
Angeles’ appointment on the ground of nepotism, as well as the latter’s purported unfitness and
unsatisfactory performance. Even so, petitioner Dr. Angeles continued to discharge the functions and duties
of a Municipal Administrator for which he received an annual salary of ₱210,012.00. 8
Following an audit on various local disbursements, Maximo Andal (Andal), the Provincial State Auditor of
Laguna, issued an Audit Observation Memorandum (AOM) No. 2006-007-1009 dated 6 October 2006
addressed to petitioner Corales who was asked to comment/reply. The aforesaid AOM, in sum, states that: 1)
petitioner Dr. Angeles’ appointment as Municipal Administrator (during the second and third terms of
petitioner Corales) was without legal basis for having been repeatedly denied confirmation by the
Sangguniang Bayan; 2) petitioner Dr. Angeles can be considered, however, as a de facto officer entitled to
the emoluments of the office for the actual services rendered; 3) nonetheless, it is not the Municipality of
Nagcarlan that should be made liable to pay for petitioner Dr. Angeles’ salary; instead, it is petitioner
Corales, being the appointing authority, as explicitly provided for in Article 169(I) of the Rules and
Regulations Implementing the Local Government Code of 1991, 10 as well as Section 5, Rule IV of the
Omnibus Rules of Appointments and Other Personnel Actions; 11 4) a post audit of payrolls pertaining to the
payment of salaries, allowances and other incentives of petitioner Dr. Angeles from 15 July 2001 up to 31
May 200612 partially amounted to ₱1,282,829.99; and 5) in view thereof, it is recommended that an
appropriate Notice of Disallowance be issued for the payment of salary expenses incurred without legal
basis by the Municipality of Nagcarlan in the aforestated amount. 13
249
Instead of submitting his comment/reply thereon, petitioner Corales, together with petitioner Dr. Angeles,
opted to file a Petition for Prohibition and Mandamus against Andal and the then members of the
Sangguniang Bayan before the RTC of San Pablo City, Laguna, docketed as Civil Case No. SP-6370 (07)
and originally raffled to Branch 32. Petitioners sought, by way of prohibition, to require the Office of the
Provincial Auditor, through Andal, to recall its AOM and to eventually desist from collecting
reimbursement from petitioner Corales for the salaries paid to and received by petitioner Dr. Angeles for the
latter’s services as Municipal Administrator. Petitioners similarly sought, by way of mandamus, to compel
the then members of the Sangguniang Bayan, as a collegial body, to recall its Resolutions denying
confirmation to petitioner Dr. Angeles’ appointment as Municipal Administrator and in their stead to
confirm the validity and legitimacy of such appointment. 14
In its turn, the Office of the Solicitor General (OSG), on Andal’s behalf, who was impleaded in his official
capacity, filed a Motion to Dismiss petitioners’ Petition for Prohibition and Mandamus grounded on lack of
cause of action, prematurity and non-exhaustion of administrative remedies. It was specifically contended
therein that: (1) the issuance of the AOM was merely an initiatory step in the administrative investigation of
the Commission on Audit (COA) to allow petitioner Corales to controvert the findings and conclusions of
the Sangguniang Bayan in its Resolution No. 2001-078, as well as those of then Secretary Jose D. Lina, Jr.
in Department of Interior and Local Government (DILG) Opinion No. 124 s. 2002; (2) it was only after the
completion of the said investigation that a resolution will be issued as regards the propriety of the
disbursements made by the Municipality of Nagcarlan in the form of salaries paid to petitioner Dr. Angeles
during his tenure as Municipal Administrator; and (3) instead of resorting to judicial action, petitioner
Corales should have first responded to the AOM and, in the event of an adverse decision against him,
elevate the matter for review to a higher authorities in the COA.15 With these, petitioners’ petition should be
dismissed, as petitioner Corales has no cause of action against Andal - his resort to judicial intervention is
premature and he even failed to avail himself of, much less exhaust, the administrative remedies available to
him.16
In its Order dated 17 May 2007, the trial court denied the said Motion to Dismiss on the ground that Andal
was merely a nominal party.17 The subsequent motion for its reconsideration was also denied in another
Order dated 5 September 2007.18
Respondent Republic, as represented by COA, as represented by Andal, consequently filed a Petition for
Certiorari with the Court of Appeals ascribing grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the trial court in rendering the Orders dated 17 May 2007 and 5 September 2007,
as it unjustly denied respondent’s right to actively prosecute the case through a mere declaration that it was a
nominal party despite a clear showing that the Petition for Prohibition referred to the respondent as a real
party in interest.19
On 15 September 2008, the Court of Appeals rendered its now assailed Decision granting respondent’s
Petition for Certiorari, thereby annulling and setting aside the RTC Orders dated 17 May 2007 and 5
September 2007 and, accordingly, dismissing petitioners’ Petition for Prohibition with the court a quo. 20 The
Court of Appeals justified its decision in the following manner:
x x x We agree with the OSG’s contention that the [herein respondent Republic], herein represented by the
COA and specifically by Andal in the latter’s capacity as Provincial State Auditor of Laguna, is not merely a
nominal party to the petition for prohibition. x x x. That the [respondent] naturally has an interest in the
disposition/disbursement of said public funds as well as in the recovery thereof should the ongoing
investigative audit confirm the illegality thereof cannot be gainsaid. Rather than a mere nominal party,
therefore, the [respondent] is an indispensable party to the petition for prohibition and may thus seek its
dismissal, given that under the attendant facts there is a yet no actual case or controversy calling for [therein]
respondent court’s exercise of its judicial power.
Judicial review cannot be exercised in vacuo. Thus, as a condition precedent for the exercise of judicial
inquiry, there must be an actual case or controversy, which exists when there is a conflict of legal rights or
an assertion of opposite legal claims, which can be resolved on the basis of existing law and jurisprudence. x
x x. An actual case or controversy thus means an existing case or controversy that is appropriate or ripe for PETITIONERS HAVE A VALID, PERFECT AND LEGITIMATE CAUSE OF ACTION FOR
judicial determination, not conjectural or anticipatory, lest the decision of the court would amount to an PROHIBITION.22 (Italics supplied).
advisory opinion. The Petition is bereft of merit.
[Herein petitioners] x x x have failed to show the existence of an actual case or controversy that would The issues will be discussed in seriatim.
necessitate judicial inquiry through a petition for prohibition. As the OSG aptly observed, the issuance of the The first three issues concern the ripeness or prematurity of the Petition for Prohibition assailing the AOM
AOM is just an initiatory step in the investigative audit being then conducted by Andal[,] as Provincial State issued by Andal to petitioner Corales. Petitioners argue that from the tenor of the AOM it is clear that
Auditor of Laguna to determine the propriety of the disbursements made by the Municipal Government of petitioner Corales is being adjudged liable and personally accountable to pay or to reimburse, in his private
Nagcarlan. While Andal may have stated an opinion in the AOM that [herein petitioner] Corales should capacity, the salaries paid to and received by petitioner Dr. Angeles for the latter’s services as Municipal
reimburse the government treasury for the salaries paid to [herein petitioner Dr. Angeles] in light of the Administrator, as his appointment thereto was considered invalid for lack of necessary confirmation from
repeated disapproval and/or rejection of the latter’s appointment by the Sangguniang [Bayan] of Nagcarlan, the Sangguniang Bayan. It is further argued that contrary to the claim of respondent Republic that such
there is no showing whatsoever of any affirmative action taken by Andal to enforce such audit observation. AOM is a mere initiatory step in the course of an investigative auditing process, the wordings thereof
What Andal did, as the AOM unmistakably shows, was to merely request [petitioner] Corales to submit a unmistakably reveal that the same is a categorical disposition and enforcement measure requiring petitioner
reply/comment to the audit observation and in the process afford the latter an opportunity to controvert not Corales to reimburse the money disbursed by the Municipality of Nagcarlan to pay petitioner Dr. Angeles’
only Andal’s opinion on salary reimbursement but the other statements therein expressed by the other salaries as Municipal Administrator. Such AOM is a firm, clear and affirmative official action on the part of
members of the audit team. the Provincial State Auditor to hold petitioner Corales liable for reimbursement; thus, to require the latter to
In the absence moreover of a showing that [petitioners], particularly [petitioner] Corales, sustained actual or still comment or controvert the findings thereon is a mere frivolous and useless formality. Since the
imminent injury by reason of the issuance of the AOM, there is no reason to allow the continuance of the requirement for petitioner Corales to pay and reimburse the salaries of petitioner Dr. Angeles is actual,
petition for prohibition which was, after all, manifestly conjectural or anticipatory, filed for a speculative direct and forthcoming, the same may be the proper subject of an action for prohibition. Otherwise stated,
purpose and upon the hypothetical assumption that [petitioner] Corales would be eventually compelled to such imposition of liability for reimbursement against petitioner Corales presents a concrete justiciable
reimburse the amounts paid as [petitioner Dr. Angeles’] salaries should the audit investigation confirm the controversy and an actual dispute of legal rights.
irregularity of such disbursements. This Court will not engage in such speculative guesswork and neither Petitioners’ contention is unavailing.
should respondent court x x x.21 (Emphasis and italics supplied). To begin with, this Court deems it proper to quote the significant portions of the questioned AOM, to wit:
Disgruntled, petitioners moved for its reconsideration but it was denied for lack of merit in a Resolution
FOR : Hon. ROSENDO R. CORALES
dated 20 February 2009.
Municipal Mayor
Hence, this petition.
Nagcarlan, Laguna
In their Memorandum, petitioners raise the following issues:
I. FROM : Mr. MAXIMO L. ANDAL
WHETHER OR NOT THE COURT OF APPEALS COMMITTED A PALPABLY ERRONEOUS State Auditor IV
RESOLUTION OF A SUBSTANTIAL QUESTION OF LAW WHEN IT ORDERED THE DISMISSAL Audit Team Leader
OF PETITIONERS’ SUIT FOR PROHIBITION.
II. May we have your comment/reply on the following audit observation. Please return the duplicate within
WHETHER OR NOT THE COURT OF APPEALS ACTED UNJUSTLY AND INJUDICIOUSLY WHEN fifteen (15) days upon receipt by filling up the space provided for with your comments.
IT HELD THAT THE FACTS AND CIRCUMSTANCES SURROUNDING THE SUIT FOR AUDIT OBSERVATION MANAGEMENT COMMENT
PROHIBITION IS NOT YET RIPE FOR JUDICIAL DETERMINATION.
III. The appointment of [herein petitioner Dr. Angeles] as
WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE ERROR Municipal Administrator was repeatedly denied not
IN THE INTERPRETATION AND RESOLUTION OF A PIVOTAL LEGAL ISSUE WHEN IT confirmed/ concurred by Sangguniang Bayan hence, the
CONCLUDED THAT THERE IS NO ACTUAL DISPUTE OR CONCRETE CONTROVERSY WHICH validity of the appointment as per opinion/rulings by the
MAY BE THE PROPER SUBJECT MATTER OF A SUIT FOR PROHIBITION. then Secretary Jose D. Lina, Jr. of the DILG in opinion
IV. No. 124 s.2002 was without legal basis.
WHETHER OR NOT THE COURT OF APPEALS UNJUSTIFIABLY TRANSGRESSED AND DILG Opinion No. 124 s[.]2002 states that the
TRAMPLED UPON A CATEGORICAL JURISPRUDENTIAL DOCTRINE WHEN IT TOOK continued discharge of powers by [petitioner Dr.
COGNIZANCE OF AND FAVORABLY RESOLVED THE [HEREIN RESPONDENT’S] PETITION Angeles] as Municipal Administrator appears to have no
FOR CERTIORARI, IN BLATANT VIOLATION OF THE RULE LAID DOWN IN THE APROPOS legal basis. A person may assume public office once his
CASE OF CHINA ROAD AND BRIDGE CORPORATION [V.] COURT OF APPEALS (348 SCRA 401). appointment is already effective. The Supreme Court in
V. one case (Atty. David B. Corpuz [v.] Court of Appeals,
WHETHER OR NOT THE COURT OF APPEALS OVERSTEPPED AND WENT BEYOND THE et al[.], G.R. No. 123989, 26 January 1998) held that
BOUNDARIES OF ITS LEGITIMATE DISCRETION WHEN IT DEVIATED AND VEERED AWAY where the assent or confirmation of some other office or
FROM THE PRINCIPAL ISSUES OF THE CASE, INSTEAD OF PRONOUNCING THAT

250
body is required, the appointment may be complete only
when such assent or confirmation is obtained. Until the
process is completed, the appointee can claim no vested
right in the office nor invoke security of tenure. Since
the appointment of a Municipal Administrator requires
sanggunian concurrence (Section 443 (d), RA 7160) and
considering that the appointment never became
effective. As such, his assumption and continued
holding of the office of the Municipal Administrator
find no legal basis.
However, [petitioner Dr. Angeles] may claim salary for
the services he has actually rendered. As held in one
case (Civil Liberties Union [v.] Executive Secretary,
194 SCRA 317), a de facto officer is entitled to
emoluments of the office for the actual services
rendered. Here, [petitioner Dr. Angeles] can be
considered as a de facto officer. x x x, as held in the
Corpuz case cited above, the Supreme Court ruled that a
public official who assumed office under an incomplete
appointment is merely a de facto officer for the duration
of his occupancy of the office for the reason that he
assumed office under color of a known appointment
which is void by a reason of some defect or irregularity
in its exercise.
It is worthy to emphasize along that line that while
[petitioner Dr. Angeles] may be entitled to the salary as
a de facto officer, the municipality cannot be made
liable to pay his salaries. Instructive on this point is
Article 169 (I) of the Rules and Regulations
Implementing the Local Government Code of 1991
which explicitly provides, thus:
"The appointing authority shall be liable for the payment
of salary of the appointee for actual services rendered if
the appointment is disapproved because the appointing
authority issued it in willful violation of applicable laws,
rules and regulations thereby making the appointment
unlawful."
Corollary, Section 5 of Rule IV of the Omnibus Rules of
Appointments and Other Personnel Actions provides,
thus:
"The services rendered by any person who was required
to assume the duties and responsibilities of any position
without appointment having been issued by the
appointing authority shall not be credited nor recognized
by the Commission and shall be the personal
accountability of the person who made him assume
office.
Hence, [herein petitioner Corales] shall pay the salaries
251
of [petitioner Dr. Angeles] for the services the latter has
actually rendered.
xxx xxx xxx
Clearly, the appointment of [petitioner Dr. Angeles] per
se was bereft of legal basis in view of the absence of the
concurrence of the legislative body thus payment of his
salaries from the funds of the Municipality for actual
services rendered remained unlawful.
Further, in paragraph 4 of the letter of Mr. Allan Poe M.
Carmona, Director II of the CSC dated [1 December
2004] to Mr. Ruben C. Pagaspas, OIC, Regional Cluster
Director, COA, Cluster III, Sub-Cluster VI stated that
[petitioner Dr. Angeles] cannot be appointed to
Municipal Administrator without the concurrence of the
Sangguniang Bayan as provided under RA 7160.
Post audit of payrolls pertaining to the payment of
salaries, allowances and other incentives of [petitioner
Dr. Angeles] as Municipal Administrator for the period
from [15 July 2001] up to [31 May 2006] excluding the
period from [1 November 2001] to [31 December 2001],
[16 March 2002] to [15 May 2002], [1-31 August 2002],
[16-30 June 2003], [1-31 December 2003], [1-31
September 2004] and [1 June 2006] to [30 September
2006] were partially amounted to ₱1,282,829.99. x x x.
Issuance of Notice of Disallowance was suggested by
Atty. Eden T. Rafanan, Regional Cluster Director for
[L]egal and Adjudication Office in her 2nd Indorsement
dated [3 July 2006].
In view hereof, it is recommended that appropriate
Notice of Disallowance be issued for the payment of the
salary expenses incurred without legal basis by the
municipality in the amount mentioned in the above
paragraph.23 (Emphasis, italics and underscoring
supplied).
As can be gleaned therefrom, petitioner Corales was simply required to submit his comment/reply on the
observations stated in the AOM. As so keenly observed by the Court of Appeals, any mention in the AOM
that petitioner Corales shall reimburse the salaries paid to petitioner Dr. Angeles in light of the repeated
disapproval or rejection by the Sangguniang Bayan of his appointment as Municipal Administrator was
merely an initial opinion, not conclusive, as there was no showing that Andal had taken any affirmative
action thereafter to compel petitioner Corales to make the necessary reimbursement. Otherwise stated, it has
not been shown that Andal carried out or enforced what was stated in the AOM. On the contrary, petitioner
Corales was given an opportunity to refute the findings and observations in the AOM by requesting him to
comment/reply thereto, but he never did. More so, even though the AOM already contained a
recommendation for the issuance of a Notice of Disallowance of the payment of salary expenses, the records
are bereft of any evidence to show that a Notice of Disallowance has, in fact, been issued. Concomitantly,
the AOM did not contain any recommendation to the effect that petitioner Corales would be held personally
liable for the amount that would be disallowed. It is, therefore, incongruous to conclude that the said AOM
is tantamount to a directive requiring petitioner Corales to reimburse the salaries paid to and received by
petitioner Dr. Angeles during the latter’s stint as Municipal Administrator after his appointment thereto was
held invalid for want of conformity from the Sangguniang Bayan.
In relation thereto, as aptly observed by the OSG, to which the Court of Appeals conformed, the issuance of
the AOM is just an initiatory step in the investigative audit being conducted by Andal as Provincial State
Auditor to determine the propriety of the disbursements made by the Municipal Government of Laguna.
That the issuance of an AOM can be regarded as just an initiatory step in the investigative audit is evident
from COA Memorandum No. 2002-053 dated 26 August 2002.24 A perusal of COA Memorandum No.
2002-053, particularly Roman Numeral III, Letter A, paragraphs 1 to 5 and 9, reveals that any finding or
observation by the Auditor stated in the AOM is not yet conclusive, as the comment/justification 25 of the
head of office or his duly authorized representative is still necessary before the Auditor can make any
conclusion. The Auditor may give due course or find the comment/justification to be without merit but in
either case, the Auditor shall clearly state the reason for the conclusion reached and recommendation made.
Subsequent thereto, the Auditor shall transmit the AOM, together with the comment or justification of the
Auditee and the former’s recommendation to the Director, Legal and Adjudication Office (DLAO), for the
sector concerned in Metro Manila and/or the Regional Legal and Adjudication Cluster Director (RLACD) in
the case of regions. The transmittal shall be coursed through the Cluster Director concerned and the
Regional Cluster Director, as the case may be, for their own comment and recommendation. The DLAO for
the sector concerned in the Central Office and the RLACD shall make the necessary evaluation of the
records transmitted with the AOM. When, on the basis thereof, he finds that the transaction should be
suspended or disallowed, he will then issue the corresponding Notice of Suspension (NS), Notice of
Disallowance (ND) or Notice of Charge (NC), as the case may be, furnishing a copy thereof to the Cluster
Director. Otherwise, the Director may dispatch a team to conduct further investigation work to justify the
contemplated action. If after in-depth investigation, the DLAO for each sector in Metro Manila and the
RLACD for the regions find that the issuance of the NS, ND, and NC is warranted, he shall issue the same
and transmit such NS, ND or NC, as the case may be, to the agency head and other persons found liable
therefor.
From the foregoing, it is beyond doubt that the issuance of an AOM is, indeed, an initial step in the conduct
of an investigative audit considering that after its issuance there are still several steps to be conducted before
a final conclusion can be made or before the proper action can be had against the Auditee. There is,
therefore, no basis for petitioner Corales’ claim that his comment thereon would be a mere formality.
Further, even though the AOM issued to petitioner Corales already contained a recommendation for the
issuance of a Notice of Disallowance, still, it cannot be argued that his comment/reply to the AOM would be
a futile act since no Notice of Disallowance was yet issued. Again, the records are bereft of any evidence
showing that Andal has already taken any affirmative action against petitioner Corales after the issuance of
the AOM.
Viewed in this light, this Court can hardly see any actual case or controversy to warrant the exercise of its
power of judicial review. Settled is the rule that for the courts to exercise the power of judicial review, the
following must be extant: (1) there must be an actual case calling for the exercise of judicial power; (2) the
question must be ripe for adjudication; and (3) the person challenging must have the "standing." An actual
case or controversy involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of
judicial resolution as distinguished from a mere hypothetical or abstract difference or dispute. There must be
a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and
jurisprudence. Closely related thereto is that the question must be ripe for adjudication. A question is
considered ripe for adjudication when the act being challenged has had a direct adverse effect on the
individual challenging it. The third requisite is legal standing or locus standi, which has been defined as a
personal or substantial interest in the case such that the party has sustained or will sustain direct injury as a
result of the governmental act that is being challenged, alleging more than a generalized grievance. The gist
of the question of standing is whether a party alleges "such personal stake in the outcome of the controversy
as to assure that concrete adverseness which sharpens the presentation of issues upon which the court
252
depends for illumination of difficult constitutional questions." Unless a person is injuriously affected in any
of his constitutional rights by the operation of statute or ordinance, he has no standing. 26
The requisites of actual case and ripeness are absent in the present case. To repeat, the AOM issued by
Andal merely requested petitioner Corales to comment/reply thereto.1awp++i1 Truly, the AOM already
contained a recommendation to issue a Notice of Disallowance; however, no Notice of Disallowance was
yet issued. More so, there was no evidence to show that Andal had already enforced against petitioner
Corales the contents of the AOM. Similarly, there was no clear showing that petitioners, particularly
petitioner Corales, would sustain actual or imminent injury by reason of the issuance of the AOM. The
action taken by the petitioners to assail the AOM was, indeed, premature and based entirely on surmises,
conjectures and speculations that petitioner Corales would eventually be compelled to reimburse petitioner
Dr. Angeles’ salaries, should the audit investigation confirm the irregularity of such disbursements. Further,
as correctly pointed out by respondent Republic in its Memorandum, what petitioners actually assail is
Andal’s authority to request them to file the desired comment/reply to the AOM, which is beyond the scope
of the action for prohibition, as such request is neither an actionable wrong nor constitutive of an act
perceived to be illegal. Andal, being the Provincial State Auditor, is clothed with the authority to audit
petitioners’ disbursements, conduct an investigation thereon and render a final finding and recommendation
thereafter. Hence, it is beyond question that in relation to his audit investigation function, Andal can validly
and legally require petitioners to submit comment/reply to the AOM, which the latter cannot pre-empt by
prematurely seeking judicial intervention, like filing an action for prohibition.
Moreover, prohibition, being a preventive remedy to seek a judgment ordering the defendant to desist from
continuing with the commission of an act perceived to be illegal, may only be resorted to when there is "no
appeal or any other plain, speedy, and adequate remedy in the ordinary course of law."27
In this case, petitioners insist that it is no longer necessary to exhaust administrative remedies considering
that there is no appeal or any other plain, speedy and appropriate remedial measure to assail the imposition
under the AOM aside from an action for prohibition.
This Court finds the said contention plain self-deception.
As previously stated, petitioners’ action for prohibition was premature. The audit investigative process was
still in its initial phase. There was yet no Notice of Disallowance issued. And, even granting that the AOM
issued to petitioner Corales is already equivalent to an order, decision or resolution of the Auditor or that
such AOM is already tantamount to a directive for petitioner Corales to reimburse the salaries paid to
petitioner Dr. Angeles, still, the action for prohibition is premature since there are still many administrative
remedies available to petitioners to contest the said AOM. Section 1, Rule V of the 1997 Revised Rules of
Procedure of the COA, provides: "[a]n aggrieved party may appeal from an order or decision or ruling
rendered by the Auditor embodied in a report, memorandum, letter, notice of disallowances and charges,
Certificate of Settlement and Balances, to the Director who has jurisdiction over the agency under audit."
From the final order or decision of the Director, an aggrieved party may appeal to the Commission
proper.28 It is the decision or resolution of the Commission proper which can be appealed to this Court. 29
Clearly, petitioners have all the remedies available to them at the administrative level but they failed to
exhaust the same and instead, immediately sought judicial intervention. Otherwise stated, the auditing
process has just begun but the petitioners already thwarted the same by immediately filing a Petition for
Prohibition. In Fua, Jr. v. COA,30citing Sison v. Tablang,31 this Court declared that the general rule is that
before a party may seek the intervention of the court, he should first avail himself of all the means afforded
him by administrative processes. The issues which administrative agencies are authorized to decide should
not be summarily taken from them and submitted to the court without first giving such administrative
agency the opportunity to dispose of the same after due deliberation. Also, in The Special Audit Team,
Commission on Audit v. Court of Appeals and Government Service Insurance System, 32 this Court has
extensively pronounced that:
If resort to a remedy within the administrative machinery can still be made by giving the administrative
officer concerned every opportunity to decide on a matter that comes within his or her jurisdiction, then such
remedy should be exhausted first before the court’s judicial power can be sought. The premature invocation x x x Applying the test to the instant case, it is clear that private respondent raises pure questions of law
of the intervention of the court is fatal to one’s cause of action. The doctrine of exhaustion of administrative which are not proper in an ordinary appeal under Rule 41, but should be raised by way of a petition for
remedies is based on practical and legal reasons. The availment of administrative remedy entails lesser review on certiorari under Rule 45.1âwphi1
expenses and provides for a speedier disposition of controversies. Furthermore, the courts of justice, for We agree with private respondent that in a motion to dismiss due to failure to state a cause of action, the trial
reasons of comity and convenience, will shy away from a dispute until the system of administrative redress court can consider all the pleadings filed, including annexes, motions and the evidence on record. However
has been completed and complied with, so as to give the administrative agency concerned every opportunity in so doing, the trial court does not rule on the truth or falsity of such documents. It merely includes such
to correct its error and dispose of the case. x x x. documents in the hypothetical admission. Any review of a finding of lack of cause of action based on these
Moreover, courts have accorded respect for the specialized ability of other agencies of government to deal documents would not involve a calibration of the probative value of such pieces of evidence but would only
with the issues within their respective specializations prior to any court intervention. The Court has reasoned limit itself to the inquiry of whether the law was properly applied given the facts and these supporting
thus: documents. Therefore, what would inevitably arise from such a review are pure questions of law, and not
We have consistently declared that the doctrine of exhaustion of administrative remedies is a cornerstone of questions of fact.36 (Emphasis supplied).
our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out their In the case at bench, however, the Motion to Dismiss was denied. It is well-entrenched that an order denying
functions and discharge their responsibilities within the specialized areas of their respective competence. a motion to dismiss is an interlocutory order which neither terminates nor finally disposes of a case as it
The rationale for this doctrine is obvious. It entails lesser expenses and provides for the speedier resolution leaves something to be done by the court before the case is finally decided on the merits. 37 Therefore,
of controversies. Comity and convenience also impel courts of justice to shy away from a dispute until the contrary to the claim of petitioners, the denial of a Motion to Dismiss is not appealable, not even via Rule 45
system of administrative redress has been completed. of the Rules of Court. The only remedy for the denial of the Motion to Dismiss is a special civil action for
The 1987 Constitution created the constitutional commissions as independent constitutional bodies, tasked certiorari showing that such denial was made with grave abuse of discretion. 38
with specific roles in the system of governance that require expertise in certain fields. For COA, this role Taking into consideration all the foregoing, this Court finds no reversible error on the part of the Court of
involves: Appeals in reversing the Orders of the court a quo and consequently dismissing petitioners’ Petition for
The power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and Prohibition filed thereat.1âwphi1
receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the WHEREFORE, premises considered, the Decision and Resolution dated 15 September 2008 and 20
Government, or any of its subdivisions, agencies, instrumentalities, including government-owned and February 2009, respectively, of the Court of Appeals in CA-G.R. SP No. 101296 are hereby AFFIRMED.
controlled corporations with original charter. x x x. Costs against petitioners.
As one of the three (3) independent constitutional commissions, COA has been empowered to define the SO ORDERED.
scope of its audit and examination and to establish the techniques and methods required therefor; and to
promulgate accounting and auditing rules and regulations, including those for the prevention and
disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures or uses of
government funds and properties.
Thus, in the light of this constitutionally delegated task, the courts must exercise caution when intervening
with disputes involving these independent bodies, for the general rule is that before a party may seek the
intervention of the court, he should first avail of all the means afforded him by administrative processes. The
issues which administrative agencies are authorized to decide should not be summarily taken from them and
submitted to a court without first giving such administrative agency the opportunity to dispose of the same
after due deliberation.33(Emphasis supplied).
In their futile attempt to convince this Court to rule in their favor, petitioners aver that by filing a Motion to
Dismiss on the ground of lack of cause of action, respondent Republic, in essence, admitted all the material
averments and narration of facts stated in the Petition for Prohibition and Mandamus. As such, there is no
longer any question of fact to speak of and what remains is a pure question of law. The judgment, therefore,
of the trial court denying the Motion to Dismiss is no longer subject to any appeal or review by the Court of
Appeals. Instead, it is already appealable and reviewable by this Court under Rule 45 of the Rules of Court,
where only pure questions of law may be raised and dealt with. This is in line with the pronouncement in
China Road and Bridge Corporation v. Court of Appeals 34 (China Road Case). The Court of Appeals should
have dismissed respondent Republic’s Petition for Certiorari under Rule 65 of the Rules of Court for being
an improper and inappropriate mode of review.
Petitioners’ above argument is misplaced.
China Road Case is not at all applicable in the case at bench. Therein, the Motion to Dismiss the Complaint
was granted. As the order granting the motion to dismiss was a final, as distinguished from an interlocutory
order, the proper remedy was an appeal in due course.35 Thus, this Court in China Road Case held that:

253
 THIRD DIVISION
G.R. No. 164966 June 8, 2007
ROLANDO TAN, ELENA TAN and LAMBERTO TAN, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, HON. HERMES B. MONTERO, in his capacity as Assistant
Provincial Prosecutor, and the PEOPLE OF THE PHILIPPINES, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the November 24, 2003 Decision 1 of the Court of Appeals
in CA-G.R. SP No. 74450 dismissing the petition for prohibition and injunction, which sought to enjoin the
Presiding Judge of the Regional Trial Court of Cebu City, Branch 5, from further proceeding with Crim.
Case Nos. 64381, 64383, 64385, 64386 and 64387; and the July 14, 2004 Resolution 2 denying petitioners’
motion for reconsideration.
In a Letter-Complaint dated June 26, 2002, James L. King (King) charged Roderick Lim-Go, Lucy Go,
Nelson Go, John Doe and Peter Doe with violation of Batas Pambansa Bilang 22 (B.P. 22) and Estafa
involving two checks both dated June 21, 2002, to wit: (1) United Overseas Bank Philippines (UOB) Check
No. 00082597 in the amount of ₱20 Million; and (2) UOB Check No. 00082599 in the amount of ₱7.9
Million.
Subsequently or on July 10, 2002, King filed a Supplemental Complaint-Affidavit involving five additional
checks, to wit: (1) UOB Check No. 0000082596 dated June 21, 2002 in the amount of ₱7 Million; (2) UOB
Check No. 0000082598 dated June 21, 2002 in the amount of ₱26.68 Million; (3) UOB Check No.
0000082434 dated June 23, 2002 in the amount of ₱2.6 Million; (4) UOB Check No. 0000082495 dated
June 24, 2002 in the amount of ₱7 Million; and (5) UOB Check No. 0000082494 dated June 24, 2002 in the
amount of ₱18 Million. The complaints were docketed as I.S. Nos. 02-5997-5999-F, 02-0827-B, 02-0827-C,
02-0827-D, 02-0827-E and 02-0827-F, respectively.
On August 1, 2002, King filed a Second Supplemental Complaint-Affidavit for Estafa impleading Grace
Tan-Go, and herein petitioners Rolando Tan, Elena Tan, and Lamberto Tan, as additional respondents.
King averred that in February 2002, the spouses Roderick Lim Go and Grace Tan-Go (spouses Go)
proposed to him a business transaction wherein the spouses Go would borrow cash from King in exchange
for which Roderick Go would issue postdated checks corresponding to the amount borrowed plus interest.
Roderick Go’s parents, Go Tong Go and Lucy Go, and brother, Nelson Go, assured King that whatever
checks Roderick Go would issue would be funded on their due dates and that the checking account at the
United Overseas Bank, Carbon Branch, Cebu City is their joint account. King agreed to the business
proposal. Thereafter, Roderick Go started issuing checks, inclusive of interest, in exchange for the cash
given by King. The checks when presented for encashment were initially honored by the drawee bank;
consequently, King reposed his trust and confidence in spouses Go.
On March 22, 2002, the spouses Go, together with herein petitioners Rolando Tan (father of Grace Tan-Go),
Elena Tan (mother of Grace Tan-Go), asked ₱100 Million from King allegedly for the renovation of their
movie houses in Butuan City. However, King could only accommodate ₱40 Million, in exchange for which,
Roderick Go issued several checks to King in the amount of ₱61.28 Million, inclusive of the interest for
three months.
At first, the checks issued by Go were honored by the drawee bank when presented. However, on June 24,
2002, when several of the checks he issued were about to fall due, Roderick Go requested King for a
meeting. While at the agreed meeting place, Roderick Go allegedly attacked King with a box cutter and told
him that all the checks that he issued would be dishonored and for this reason he had to injure, kidnap and
kill him. This incident is the subject of a separate criminal case. Thereafter, all the checks dated June 21, 23
and 24, 2002 issued by Roderick Go were dishonored for having been drawn against insufficient funds.
Despite repeated demands, no payment was made; hence, King filed a complaint for violation of BP Blg. 22
and Estafa.
254
All the accused, except Roderick Go, submitted their counter-affidavits. In their Joint Counter-
Affidavit3 dated August 8, 2002, petitioners denied meeting King on March 22, 2002; that only Roderick Go
could be held liable for the bouncing checks considering that he alone issued the same; that King’s first
supplemental complaint-affidavit contradicted his second supplemental complaint-affidavit. In the first
supplemental complaint-affidavit, Roderick Go, Lucy Go, Nelson Go, John Doe and Peter Doe were made
respondents as co-conspirators relative to the issuance of the bouncing checks, while in the second
supplemental complaint-affidavit, petitioners were made co-conspirators over the same checks but under
totally different circumstances. Thus, petitioners claim that the criminal cases filed against them were an
afterthought and prayed that the same be dismissed.
The preliminary investigation of the subject criminal cases was initially assigned to 1st Assistant Provincial
Prosecutor/Officer-in-Charge Cesar Tajanlangit who voluntarily inhibited himself. On October 10, 2002,
then Secretary of Justice Hernando B. Perez issued Department Order (D.O.) No. 369, 4 designating public
respondent 3rd Assistant Provincial Prosecutor Hermes Montero (Montero) to continue with the preliminary
investigation of these cases, and, if the evidence warranted, to file the appropriate informations in court.
In a Joint Resolution5 dated November 8, 2002, public respondent Montero found probable cause for the
following crimes:
WHEREFORE, in the light of the foregoing, the following criminal Informations shall be filed against:
(1) Roderick L. Go, alias ‘Edu Ting’, for violation of B.P. 22 on seven (7) counts;
(2) Roderick L. Go, Grace Tan-Go, Go Tong Go, Lucy Go and Nelson Go, for estafa on two (2) counts
anent (a) UOB Check No. 00082597 dated June 21, 2002 in the amount of ₱20,000,000.00; and (b) UOB
Check No. 00082599 dated June 21, 2002 in the amount of ₱7,800,000.00;
(3) Roderick L. Go, Grace Tan-Go, Go Tong Go, Lucy Go, Nelson Go, [petitioners] Rolando Tan, Elena
Tan and Lamberto Tan, for estafa on five (5) counts anent (c) UOB Check No. 0000082596 dated June 21,
2002, in the amount of ₱7,000,000.00, (d) UOB Check No. 0000082598 dated June 21, 2002, in the amount
of ₱26,680,000.00, (e) UOB Check No. 0000082434 dated June 23, 2002, in the amount of ₱2,600,000.00,
(f) UOB Check No. 0000082495 dated June 24, 2002, in the amount of ₱7,000,000.00, and (g) UOB Check
No. 0000082494 dated June 24, 2002, in the amount of ₱18,000,000.00. 6
On November 11, 2002, five informations for estafa under Article 315, 2(a) of the Revised Penal Code were
filed against Roderick L. Go, Grace Tan-Go, Go Tong Go, Lucy Go, Nelson Go, and herein petitioners,
docketed as Criminal Case Nos. CBU- 64381, 64383, 64385, 64386, and 64387 and raffled to the Regional
Trial Court, Branch 5 of Cebu City. From the above-quoted adverse Resolution of public respondent
Montero, only Roderick Go and Grace Tan-Go separately appealed to the Secretary of Justice.
On November 18, 2002, before any warrant of arrest could be issued, petitioners posted bail. The following
day or on November 19, 2002, they were arraigned and pleaded not guilty.
On December 17, 2002, petitioners filed a Petition for Prohibition and Injunction with Preliminary
Injunction and Prayer for Temporary Restraining Order7 before the Court of Appeals. They sought to
restrain the trial court from proceeding with the subject criminal cases against them and prayed that the same
be dismissed.
On November 24, 2003, the Court of Appeals issued the assailed Decision dismissing the petition for lack of
merit. It found that (1) petitioners failed to avail themselves of other plain, speedy and adequate remedies to
challenge the public prosecutor’s finding of probable cause; (2) the petition failed to establish that it falls
under any of the exceptions to the general rule that the court will not issue writs of prohibition or injunction,
preliminary or final, to enjoin or restrain a criminal prosecution; (3) public respondent Montero was duly
authorized by the Secretary of Justice to conduct the preliminary investigation and, if the evidence so
warranted, to file the corresponding informations relative to the subject criminal cases; (4) petitioners failed
to prove that public respondents acted with grave abuse of discretion; and (5) petitioners’ claims contesting
the public prosecutor’s finding of probable cause are matters of defense that should be threshed out during
the trial of the criminal cases and not through the extraordinary remedy of prohibition.
After their motion for reconsideration was denied, petitioners interposed the instant petition raising nine
issues8revolving around the factual and legal bases of the finding of probable cause for estafa against them
as well as the authority of public respondent Montero to file the subject criminal cases with the trial court.
At the outset, it must be stressed that petitioners are asking us to review the Decision of the Court of
Appeals which dismissed their petition for prohibition. Therefore, the principal issue is whether resort to the
extraordinary remedy of prohibition was proper.
We rule in the negative.
Basic is the rule that the writ of prohibition is an extraordinary remedy to prevent the unlawful and
oppressive exercise of legal authority and to provide for a fair and orderly administration of justice. 9 It is
available only when there is no appeal or any plain, speedy and adequate remedy in the ordinary course of
law, and when the proceedings are done without or in excess of jurisdiction or with grave abuse of
discretion. The petitioner must allege in his petition and establish facts to show that any other existing
remedy is not speedy or adequate.10 A remedy is plain, speedy and adequate if it will promptly relieve the
petitioner from the injurious effects of that judgment and the acts of the tribunal or inferior court.11 Further,
the writ will not lie to correct errors of judgment but only errors of jurisdiction. As long as the tribunal acts
within its jurisdiction, any alleged errors committed in the exercise of its discretion will amount to nothing
more than mere errors of judgment which are correctible by a timely appeal. 12 In determining whether a
tribunal acted in grave abuse of discretion, mere abuse of discretion is not enough. There must be grave
abuse of discretion as where the tribunal exercised its power in an arbitrary or despotic manner, by reason of
passion or personal hostility, and it must be so patent or gross as would amount to an evasion, or virtual
refusal to perform the duty enjoined, or to act in contemplation of law. 13
In the case at bar, petitioners contend that there was no appeal or other plain, speedy or adequate remedy
available in the ordinary course of law because they were prevented by the trial court from appealing public
respondent Montero’s Joint Resolution dated November 8, 2002 which found, among others, probable cause
for estafa against them. They claim that the trial court "forced arraigned" them on November 19, 2002. This
was allegedly done in order to prevent them from appealing the Joint Resolution dated November 8, 2002 to
the Secretary of Justice as a consequence of paragraph 2, section 7 of DOJ Circular No. 70 14 ("2000
National Prosecution Service Rule on Appeal") which provides in part that "[i]f an information has been
filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused
has already been arraigned x x x."
We are not persuaded.
Petitioners admit15 that they received a copy of the Joint Resolution dated November 8, 2002 as early as
November 13, 2002. However, from the time they received the copy of the aforesaid Resolution to the time
they were arraigned on November 19, 2002, petitioners did not take steps to move for reconsideration, or
appeal the aforesaid Resolution to the Secretary of Justice. More importantly, the Court of Appeals observed
that there is no evidence on record to support petitioners’ claim that they were "forced arraigned." In fact,
the arraignment of petitioners proceeded without objections on the part of petitioners or their
counsel.16 Absent proof of force or intimidation, the trial judge enjoys the presumption of regularity in the
performance of his functions.17 We also note that petitioners’ other co-accused, Roderick Lim Go and Grace
Tan-Go, were able to timely appeal the Joint Resolution dated November 8, 2002 to the Secretary of Justice
while petitioners failed to appeal the same before their arraignment.
In fine, the arguments raised in their petition for prohibition ineluctably shows that petitioners are
principally questioning the factual and legal bases of the finding of probable cause against them. This is but
a veiled attempt to litigate issues which should have been timely appealed to the Secretary of Justice via a
petition for review. However, petitioners, through their own fault, failed to avail themselves of this remedy.
Countless times we have ruled that the extraordinary remedy of certiorari or prohibition is not a substitute
for a lost appeal.18 This case is no different.
255
There is another equally important reason why the instant petition should be denied outright. After the Court
of Appeals issued the assailed Decision dated November 24, 2003 which dismissed petitioners’ petition for
prohibition, several supervening events took place.
As earlier noted, petitioners failed to appeal from the Joint Resolution dated November 8, 2002 issued by
public respondent Montero which found, among others, probable cause against them for estafa. Only co-
accused Grace Tan-Go and Roderick Go separately and timely appealed to the Secretary of Justice. Then
Secretary of Justice Simeon A. Datumanong subsequently issued a Resolution 19 dated December 23, 2003
granting Grace Tan-Go’s petition for review. The aforesaid Resolution was, likewise, favorable to
petitioners’ cause and ordered, among others, the withdrawal of the informations for estafa against them:
WHEREFORE, the assailed Joint Resolution is hereby SET ASIDE and, conformably with Department
Order No. 473, dated December 8, 2003, which recalls and supersedes Department Order No. 369
previously authorizing Provincial Prosecutor Cezar Tajanlangit to conduct the preliminary investigation and
prosecution of the foregoing cases, the City Prosecutor of Cebu, is hereby directed to—
(1) To withdraw the informations filed in Court against all the respondents for Estafa.
(2) To file the corresponding Informations in Court against RODERICK LIM GO only, for violations of BP
22 on eight (8) counts and proceed with the prosecution thereof; and
(3) To submit to this Office, within ten (10) days from receipt of this Resolution, the appropriate action or
actions taken.
SO ORDERED.20
When King moved for reconsideration of the above Resolution, petitioners participated in the proceedings
before the Secretary of Justice by opposing the same together with Grace Tan-Go.21 In a Resolution22 dated
February 11, 2004, then Acting Secretary of Justice Merceditas N. Guitierrez granted King’s motion for
reconsideration and reinstated public respondent Montero’s Joint Resolution dated November 8, 2002.
Grace Tan-Go then filed a motion for reconsideration which was joined by petitioners through their motion
for leave to join the motion for reconsideration.23 However, Acting Secretary Guiterrez denied the same in a
Resolution dated August 18, 2004. Thereafter, Grace Tan-Go filed a motion to resolve the second ground
raised in her motion for reconsideration. In a Resolution 24 dated December 17, 2004, Secretary of Justice
Raul M. Gonzalez reversed and set aside the February 11, 2004 and August 18, 2004 Resolutions of Acting
Secretary Gutierrez, and reinstated former Secretary Datumanong’s Resolution dated December 23, 2003.
Consequently, a motion to withdraw informations 25 was filed by the prosecution before the trial court.
By participating in the proceedings before the Secretary of Justice, petitioners have actively litigated the
issues regarding the factual and legal bases of the finding of probable cause against them as well as the
authority of public respondent Montero to file the subject criminal informations. This is clearly borne by the
tenor of the Resolution dated December 17, 2004 issued by the Secretary of Justice. Yet, these issues are
exactly the same issues being raised by petitioners before this Court through the instant petition which is
separate and distinct from the proceedings before the Secretary of Justice whose aforesaid Resolution is not
the one before us for review. To reiterate, what is before us for review is the Decision of the Court of
Appeals which dismissed the petition for prohibition filed by petitioners to restrain the trial court from
proceeding with the criminal cases against them.
In effect, by taking these two distinct courses of actions, petitioners have pursued the same or related causes,
prayed for the same or substantially the same reliefs, and, in the process, have created the possibility of
conflicting decisions being rendered by the different fora upon the same issues which is precisely the evil
that the rule on forum-shopping seeks to prevent.26 Doubtless, they have engaged in a form of forum-
shopping. Their attempt to trifle with the courts and abuse their processes must not be countenanced. As a
consequence of petitioners’ violation of the rule against forum-shopping and in order to preserve the
laudable objectives of the rule against forum-shopping, the dismissal of the petition for prohibition should
be upheld.27
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated November 24, 2003 in
CA-G.R. SP No. 74450 dismissing petitioners’ petition for prohibition, and the Resolution dated July 14,
2004 denying reconsideration thereof, are AFFIRMED.
Costs against petitioners.
SO ORDERED.

256
 THIRD DIVISION
G.R. Nos. 174813-15 March 17, 2009
NILO HIPOS, SR. REPRESENTING DARRYL HIPOS, BENJAMIN CORSIÑO REPRESENTING
JAYCEE CORSIÑO, and ERLINDA VILLARUEL REPRESENTING ARTHUR
VILLARUEL, Petitioners,
vs.
HONORABLE RTC JUDGE TEODORO A. BAY, Presiding Judge, RTC, Hall of Justice, Quezon City,
Branch 86, Respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Mandamus under Rule 65 of the Rules of Court seeking a reversal of the Order dated 2
October 2006 of respondent Judge Teodoro A. Bay of Branch 86 of the Regional Trial Court (RTC) of
Quezon City, which denied the Motion to Withdraw Informations of the Office of the City Prosecutor of
Quezon City.
The facts of the case are as follows.
On 15 December 2003, two Informations for the crime of rape and one Information for the crime of acts of
lasciviousness were filed against petitioners Darryl Hipos, Jaycee Corsiño, Arthur Villaruel and two others
before Branch 86 of the Regional Trial Court of Quezon City, acting as a Family Court, presided by
respondent Judge Bay. The cases were docketed as Criminal Cases No. Q-03-123284, No. Q-03-123285 and
No. Q-03-123286. The Informations were signed by Assistant City Prosecutor Ronald C. Torralba.
On 23 February 2004, private complainants AAA1 and BBB filed a Motion for Reinvestigation asking Judge
Bay to order the City Prosecutor of Quezon City to study if the proper Informations had been filed against
petitioners and their co-accused. Judge Bay granted the Motion and ordered a reinvestigation of the cases.
On 19 May 2004, petitioners filed their Joint Memorandum to Dismiss the Case[s] before the City
Prosecutor. They claimed that there was no probable cause to hold them liable for the crimes charged.
On 10 August 2004, the Office of the City Prosecutor issued a Resolution on the reinvestigation affirming
the Informations filed against petitioners and their co-accused in Criminal Cases No. Q-03-123284-86. The
Resolution was signed by Assistant City Prosecutor Raniel S. Cruz and approved by City Prosecutor Claro
A. Arellano.
On 3 March 2006, 2nd Assistant City Prosecutor Lamberto C. de Vera, treating the Joint Memorandum to
Dismiss the Case as an appeal of the 10 August 2004 Resolution, reversed the Resolution dated 10 August
2004, holding that there was lack of probable cause. On the same date, the City Prosecutor filed a Motion to
Withdraw Informations before Judge Bay.
On 2 October 2006, Judge Bay denied the Motion to Withdraw Informations in an Order of even date.
Without moving for a reconsideration of the above assailed Order, petitioners filed the present Petition for
Mandamus, bringing forth this lone issue for our consideration:
CAN THE HON. SUPREME COURT COMPEL RESPONDENT JUDGE BAY TO DISMISS THE CASE
THROUGH A WRIT OF MANDAMUS BY VIRTUE OF THE RESOLUTION OF THE OFFICE OF THE
CITY PROSECUTOR OF QUEZON CITY FINDING NO PROBABLE CAUSE AGAINST THE
ACCUSED AND SUBSEQUENTLY FILING A MOTION TO WITHDRAW INFORMATION?2
Mandamus is an extraordinary writ commanding a tribunal, corporation, board, officer or person,
immediately or at some other specified time, to do the act required to be done, when the respondent
unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an
office, trust, or station; or when the respondent excludes another from the use and enjoyment of a right or
office to which the latter is entitled, and there is no other plain, speedy and adequate remedy in the ordinary
course of law.3
As an extraordinary writ, the remedy of mandamus lies only to compel an officer to perform a ministerial
duty, not a discretionary one; mandamus will not issue to control the exercise of discretion by a public
257
officer where the law imposes upon him the duty to exercise his judgment in reference to any manner in
which he is required to act, because it is his judgment that is to be exercised and not that of the court. 4
In the case at bar, the act which petitioners pray that we compel the trial court to do is to grant the Office of
the City Prosecutor’s Motion for Withdrawal of Informations against petitioners. In effect, petitioners seek
to curb Judge Bay’s exercise of judicial discretion.
There is indeed an exception to the rule that matters involving judgment and discretion are beyond the reach
of a writ of mandamus, for such writ may be issued to compel action in those matters, when
refused.5 However, mandamus is never available to direct the exercise of judgment or discretion in a
particular way or the retraction or reversal of an action already taken in the exercise of either. 6 In other
words, while a judge refusing to act on a Motion to Withdraw Informations can be compelled by mandamus
to act on the same, he cannot be compelled to act in a certain way, i.e., to grant or deny such Motion. In the
case at bar, Judge Bay did not refuse to act on the Motion to Withdraw Informations; he had already acted
on it by denying the same. Accordingly, mandamus is not available anymore. If petitioners believed that
Judge Bay committed grave abuse of discretion in the issuance of such Order denying the Motion to
Withdraw Informations, the proper remedy of petitioners should have been to file a Petition for Certiorari
against the assailed Order of Judge Bay.
Petitioners counter that the above conclusion, which has been argued by the Solicitor General, is contrary to
a ruling of this Court, which allegedly states that the proper remedy in such cases is a Petition for
Mandamus and not Certiorari. Petitioners cite the following excerpt from our ruling in Sanchez v.
Demetriou7:
The appreciation of the evidence involves the use of discretion on the part of the prosecutor, and we do not
find in the case at bar a clear showing by the petitioner of a grave abuse of such discretion.
The decision of the prosecutor may be reversed or modified by the Secretary of Justice or in special cases by
the President of the Philippines. But even this Court cannot order the prosecution of a person against whom
the prosecutor does not find sufficient evidence to support at least a prima facie case. The courts try and
absolve or convict the accused but as a rule have no part in the initial decision to prosecute him.
The possible exception is where there is an unmistakable showing of grave abuse of discretion that will
justify a judicial intrusion into the precincts of the executive. But in such a case the proper remedy to call for
such exception is a petition for mandamus, not certiorari or prohibition.8 (Emphases supplied.)
Petitioners have taken the above passage way out of its context. In the case of Sanchez, Calauan Mayor
Antonio Sanchez brought a Petition for Certiorari before this Court, challenging the order of the respondent
Judge therein denying his motion to quash the Information filed against him and six other persons for
alleged rape and homicide. One of the arguments of Mayor Sanchez was that there was discrimination
against him because of the non-inclusion of two other persons in the Information. We held that even this
Court cannot order the prosecution of a person against whom the prosecutor does not find sufficient
evidence to support at least a prima facie case. However, if there was an unmistakable showing of grave
abuse of discretion on the part of the prosecutors in that case, Mayor Sanchez should have filed a Petition
for Mandamus to compel the filing of charges against said two other persons.
In the case at bar, the Petition for Mandamus is directed not against the prosecution, but against the trial
court, seeking to compel the trial court to grant the Motion to Withdraw Informations by the City
Prosecutor’s Office. The prosecution has already filed a case against petitioners. Recently, in Santos v.
Orda, Jr.,9 we reiterated the doctrine we established in the leading case of Crespo v. Mogul, 10 that once a
criminal complaint or an information is filed in court, any disposition or dismissal of the case or acquittal or
conviction of the accused rests within the jurisdiction, competence, and discretion of the trial court. Thus,
we held:
In Crespo v. Mogul, the Court held that once a criminal complaint or information is filed in court, any
disposition of the case or dismissal or acquittal or conviction of the accused rests within the exclusive
jurisdiction, competence, and discretion of the trial court. The trial court is the best and sole judge on what
to do with the case before it. A motion to dismiss the case filed by the public prosecutor should be addressed
to the court who has the option to grant or deny the same. Contrary to the contention of the petitioner, the
rule applies to a motion to withdraw the Information or to dismiss the case even before or after arraignment
of the accused. The only qualification is that the action of the court must not impair the substantial rights of
the accused or the right of the People or the private complainant to due process of law. When the trial court
grants a motion of the public prosecutor to dismiss the case, or to quash the Information, or to withdraw the
Information in compliance with the directive of the Secretary of Justice, or to deny the said motion, it does
so not out of subservience to or defiance of the directive of the Secretary of Justice but in sound exercise of
its judicial prerogative.
Petitioners also claim that since Judge Bay granted a Motion for Reinvestigation, he should have "deferred
to the Resolution of Asst. City Prosecutor De Vera withdrawing the case."11 Petitioners cite the following
portion of our Decision in People v. Montesa, Jr. 12:
In the instant case, the respondent Judge granted the motion for reinvestigation and directed the Office of the
Provincial Prosecutor of Bulacan to conduct the reinvestigation. The former was, therefore, deemed to have
deferred to the authority of the prosecution arm of the Government to consider the so-called new relevant
and material evidence and determine whether the information it had filed should stand. 13
Like what was done to our ruling in Sanchez, petitioners took specific statements from our Decision,
carefully cutting off the portions which would expose the real import of our pronouncements. The Petition
for Certiorari in Montesa, Jr. was directed against a judge who, after granting the Petition for
Reinvestigation filed by the accused, proceeded nonetheless to arraign the accused; and, shortly thereafter,
the judge decided to dismiss the case on the basis of a Resolution of the Assistant Provincial Prosecutor
recommending the dismissal of the case. The dismissal of the case in Montesa, Jr. was done despite the
disapproval of the Assistant Provincial Prosecutor’s Resolution by the Provincial Prosecutor (annotated in
the same Resolution), and despite the fact that the reinvestigation the latter ordered was still ongoing, since
the Resolution of the Assistant Provincial Prosecutor had not yet attained finality. We held that the judge
should have waited for the conclusion of the Petition for Reinvestigation he ordered, before acting on
whether or not the case should be dismissed for lack of probable cause, and before proceeding with the
arraignment. Thus, the continuation of the above paragraph of our Decision in Montesa, Jr. reads:
Having done so, it behooved the respondent Judge to wait for a final resolution of the incident. In Marcelo
vs. Court of Appeals, this Court ruled:
Accordingly, we rule that the trial court in a criminal case which takes cognizance of an accused's motion
for review of the resolution of the investigating prosecutor or for reinvestigation and defers the arraignment
until resolution of the said motion must act on the resolution reversing the investigating prosecutor's finding
or on a motion to dismiss based thereon only upon proof that such resolution is already final in that no
appeal was taken thereon to the Department of Justice.
The resolution of Assistant Provincial Prosecutor Rutor recommending the dismissal of the case never
became final, for it was not approved by the Provincial Prosecutor. On the contrary, the latter disapproved it.
As a consequence, the final resolution with respect to the reinvestigation is that of the Provincial Prosecutor,
for under Section 4, Rule 112 of the Rules of Court, no complaint or information may be filed or dismissed
by an investigating fiscal without the prior written authority or approval of the provincial or city fiscal or
chief state prosecutor. Also, under Section l(d) of R.A. No. 5180, as amended by P.D. No. 77 and P.D. No.
911.14
As can be clearly seen, the statement quoted by petitioners from Montesa, Jr. is not meant to establish a
doctrine that the judge should just follow the determination by the prosecutor of whether or not there is
probable cause. On the contrary, Montesa, Jr. states:
The rule is settled that once a criminal complaint or information is filed in court, any disposition thereof,
such as its dismissal or the conviction or acquittal of the accused, rests in the sound discretion of the court.
While the prosecutor retains the discretion and control of the prosecution of the case, he cannot impose his
opinion on the court. The court is the best and sole judge on what to do with the case. Accordingly, a motion
to dismiss the case filed by the prosecutor before or after the arraignment, or after a reinvestigation, or upon
258
instructions of the Secretary of Justice who reviewed the records upon reinvestigation, should be addressed
to the discretion of the court. The action of the court must not, however, impair the substantial rights of the
accused or the right of the People to due process of law.15
In a seemingly desperate attempt on the part of petitioners’ counsel, he tries to convince us that a judge is
allowed to deny a Motion to Withdraw Informations from the prosecution only when there is grave abuse of
discretion on the part of the prosecutors moving for such withdrawal; and that, where there is no grave abuse
of discretion on the part of the prosecutors, the denial of the Motion to Withdraw Informations is void.
Petitioners’ counsel states in the Memorandum:
6.10. Furthermore, the ORDER dated October 2, 2006 of the Respondent Judge BAY consisting of 9 pages
which was attached to the URGENT PETITION did not point out any iota of grave abuse of discretion
committed by Asst. City Prosecutor De Vera in issuing his Resolution in favor of the sons of the Petitioners.
Hence, the ORDER issued by RJBAY is NULL and VOID in view of the recent ruling of the Hon. Supreme
Court in Ledesma vs. Court of Appeals, G.R. No. 113216, September 5, 1997, 86 SCAD 695, 278 SCRA
657 which states that:
"In the absence of a finding of grave abuse of discretion, the court’s bare denial of a motion to withdraw
information pursuant to the Secretary’s resolution is void." (Underscoring ours).
6.11. It is therefore respectfully submitted that the Hon. Supreme Court disregard the argument of the OSG
because of its falsity.16
This statement of petitioners’ counsel is utterly misleading. There is no such statement in our Decision in
Ledesma.17 The excerpt from Ledesma, which appears to have a resemblance to the statement allegedly
quoted from said case, provides:
No Grave Abuse of Discretion in the Resolution of the Secretary of Justice
In the light of recent holdings in Marcelo and Martinez; and considering that the issue of the correctness of
the justice secretary's resolution has been amply threshed out in petitioner's letter, the information, the
resolution of the secretary of justice, the motion to dismiss, and even the exhaustive discussion in the motion
for reconsideration - all of which were submitted to the court - the trial judge committed grave abuse of
discretion when it denied the motion to withdraw the information, based solely on his bare and ambiguous
reliance on Crespo. The trial court's order is inconsistent with our repetitive calls for an independent and
competent assessment of the issue(s) presented in the motion to dismiss. The trial judge was tasked to
evaluate the secretary's recommendation finding the absence of probable cause to hold petitioner criminally
liable for libel. He failed to do so. He merely ruled to proceed with the trial without stating his reasons for
disregarding the secretary's recommendation.18 (Emphasis supplied.)
It very much appears that the counsel of petitioners is purposely misleading this Court, in violation of Rule
10.02 of the Code of Professional Responsibility, which provides:
Rule 10.02 – A lawyer shall not knowingly misquote or misrepresent the contents of a paper, the language
or the argument of opposing counsel, or the text of a decision or authority, or knowingly cite as law a
provision already rendered inoperative by repel or amendment, or assert as a fact that which has not been
proved.
Counsel’s use of block quotation and quotation marks signifies that he intends to make it appear that the
passages are the exact words of the Court. Furthermore, putting the words "Underscoring ours" after the text
implies that, except for the underscoring, the text is a faithful reproduction of the original. Accordingly, we
are ordering Atty. Procopio S. Beltran, Jr. to show cause why he should not be disciplined as a member of
the Bar.
To clarify, we never stated in Ledesma that a judge is allowed to deny a Motion to Withdraw Information
from the prosecution only when there is grave abuse of discretion on the part of the prosecutors moving for
such withdrawal. Neither did we rule therein that where there is no grave abuse of discretion on the part of
the prosecutors, the denial of the Motion to Withdraw Information is void. What we held therein is that a
trial judge commits grave abuse of discretion if he denies a Motion to Withdraw Information without an
independent and complete assessment of the issues presented in such Motion. Thus, the opening paragraph court, when confronted with a Motion to Withdraw an Information on the ground of lack of probable cause,
of Ledesma states: is not bound by the resolution of the prosecuting arm of the government, but is required to make an
When confronted with a motion to withdraw an information on the ground of lack of probable cause based independent assessment of the merits of such motion, a requirement satisfied by the respondent judge in the
on a resolution of the secretary of justice, the bounden duty of the trial court is to make an independent case at bar.25
assessment of the merits of such motion. Having acquired jurisdiction over the case, the trial court is not Finally, if only to appease petitioners who came to this Court seeking a review of the finding of probable
bound by such resolution but is required to evaluate it before proceeding further with the trial. While the cause by the trial court, we nevertheless carefully reviewed the records of the case. After going through the
secretary's ruling is persuasive, it is not binding on courts. A trial court, however, commits reversible error same, we find that we are in agreement with the trial court that there is indeed probable cause against the
or even grave abuse of discretion if it refuses/neglects to evaluate such recommendation and simply insists petitioners sufficient to hold them for trial. We decided to omit a detailed discussion of the merits of the
on proceeding with the trial on the mere pretext of having already acquired jurisdiction over the criminal case, as we are not unmindful of the undue influence that might result should this Court do so, even if such
action.19 (Emphases supplied.)1avvphi1.zw+ discussion is only intended to focus on the finding of probable cause.
Petitioners also try to capitalize on the fact that the dispositive portion of the assailed Order apparently states WHEREFORE, the instant Petition for Mandamus is DISMISSED. Let the records of this case be remanded
that there was no probable cause against petitioners: to the Regional Trial Court of Quezon City for the resumption of the proceedings therein. The Regional
WHEREFORE, finding no probable cause against the herein accused for the crimes of rapes and acts of Trial Court is directed to act on the case with dispatch.
lasciviousness, the motion to withdraw informations is DENIED. Atty. Procopio S. Beltran, Jr. is ORDERED to SHOW CAUSE why he should not be disciplined as a
Let the case be set for arraignment and pre-trial on October 24, 2006 at 8:30 o’clock in the member of the Bar for his disquieting conduct as herein discussed.
morning.20(Underscoring ours.) SO ORDERED.
Thus, petitioners claim that since even the respondent judge himself found no probable cause against them,
the Motion to Withdraw Informations by the Office of the City Prosecutor should be granted. 21
Even a cursory reading of the assailed Order, however, clearly shows that the insertion of the word "no" in
the above dispositive portion was a mere clerical error. The assailed Order states in full:
After a careful study of the sworn statements of the complainants and the resolution dated March 3, 2006 of
2nd Assistant City Prosecutor Lamberto C. de Vera, the Court finds that there was probable cause against
the herein accused. The actuations of the complainants after the alleged rapes and acts of lasciviousness
cannot be the basis of dismissal or withdrawal of the herein cases. Failure to shout or offer tenatious
resistance did not make voluntary the complainants’ submission to the criminal acts of the accused (People
v. Velasquez, 377 SCRA 214, 2002). The complainants’ affidavits indicate that the accused helped one
another in committing the acts complained of. Considering that the attackers were not strangers but their
trusted classmates who enticed them to go to the house where they were molested, the complainants cannot
be expected to react forcefully or violently in protecting themselves from the unexpected turn of events.
Considering also that both complainants were fifteen (15) years of age and considered children under our
laws, the ruling of the Supreme Court in People v. Malones, G.R. Nos. 124388-90, March 11, 2004 becomes
very relevant. The Supreme Court ruled as follows:
Rape victims, especially child victims, should not be expected to act the way mature individuals would
when placed in such a situation. It is not proper to judge the actions of children who have undergone
traumatic experience by the norms of behavior expected from adults under similar circumstances. The range
of emotions shown by rape victim is yet to be captured even by calculus. It is, thus, unrealistic to expect
uniform reactions from rape victims (People v. Malones, G.R. Nos. 124388-90, March 11, 2004).
The Court finds no need to discuss in detail the alleged actuations of the complainants after the alleged rapes
and acts of lasciviousness. The alleged actuations are evidentiary in nature and should be evaluated after full
blown trial on the merits. This is necessary to avoid a suspicion of prejudgment against the accused. 22
As can be seen, the body of the assailed Order not only plainly stated that the court found probable cause
against the petitioners, but likewise provided an adequate discussion of the reasons for such finding. Indeed,
the general rule is that where there is a conflict between the dispositive portion or the fallo and the body of
the decision, the fallo controls. However, where the inevitable conclusion from the body of the decision is so
clear as to show that there was a mistake in the dispositive portion, the body of the decision will prevail. 23
In sum, petitioners’ resort to a Petition for Mandamus to compel the trial judge to grant their Motion to
Withdraw Informations is improper. While mandamus is available to compel action on matters involving
judgment and discretion when refused, it is never available to direct the exercise of judgment or discretion in
a particular way or the retraction or reversal of an action already taken in the exercise of either. 24 The trial

259
 THIRD DIVISION
G.R. No. 161735 September 25, 2007
EX-C1C JIMMY B. SANCHEZ and EX-C2C SALVADOR A. METEORO, Petitioners,
vs.
ROBERTO T. LASTIMOSO, in his capacity as DIRECTOR GENERAL OF THE PHILIPPINE
NATIONAL POLICE,Respondent.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the June
18, 2003 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 68989 and the January 15, 2004
Resolution3 denying the motion for reconsideration thereof.
In 1989, petitioner Sanchez, a constable in the Philippine Constabulary (PC), was discharged from the
service for allegedly losing his service firearm. Petitioner Meteoro, also a constable, was likewise
discharged from the service in 1990 for being absent without leave. On appeal, they were both cleared of all
charges. They then applied for reinstatement but their applications were not acted upon even up to the
integration of the PC into the Philippine National Police (PNP).4
On January 27, 1998, the National Police Commission (NAPOLCOM) issued Resolution No. 98-037
considering as absorbed into the police force, among others, those who had been discharged by virtue of
pending administrative or criminal cases but who were later acquitted or had their cases dismissed, and who
subsequently filed petitions for reinstatement that were not acted upon by the PNP. 5 Then, on April 3, 1998,
NAPOLCOM
issued Resolution No. 98-105 affirming and confirming the absorption into the PNP, effective on January
27, 1998, of the 126 ex-PC constables named in the list submitted by Director Edgar C. Galvante of the PNP
Directorate for Personnel and Records Management (DPRM). 6 Petitioners Sanchez and Meteoro are in
numbers 90 and 122, respectively, of the Galvante list. 7
Subsequently, on May 28, 1998, NAPOLCOM Commissioner Rogelio A. Pureza issued a Memorandum to
then Chief of the PNP Santiago Alino for the issuance of absorption orders to the 45 PC constables included
in the initial batch of those covered by the PNP Board Resolutions. 8 Petitioner Sanchez is in number 45 of
that list.9
As no absorption order had yet been issued by the Chief of the PNP, the constables in the list requested the
assistance of the Secretary of the Department of Interior and Local Government (DILG). On July 29, 1998,
the Office of the Secretary of the DILG sent a memorandum to respondent Roberto T. Lastimoso, then the
Chief of the PNP, endorsing the constables’ entreaties and requesting for a feedback thereon. 10
Without any response from the Chief of the PNP, and their pleas for the issuance of the absorption orders
still unacted upon, petitioners instituted, on September 30, 1998, a petition for mandamus docketed as Civil
Case No. Q-98-35659 in the Regional Trial Court (RTC) of Quezon City.11
During the pendency of the said petition, NAPOLCOM issued Resolution No. 99-061 on April 19, 1999
recalling the earlier Resolution No. 98-105.12 The recall was based on the Commission’s finding that the list
submitted by Galvante was not actually of the constables whose applications for absorption were indorsed
for approval, but of those whose applications were still to be reviewed, evaluated and disposed of. In other
words, the 126 named in the list were still to be interviewed and their applications to be deliberated upon by
the PNP Special Committee.13
On November 15, 2001, however, the RTC rendered its Decision 14 in the mandamus case declaring as void
ab initio NAPOLCOM Resolution No. 99-061 and ruling in favor of the petitioners. The dispositive portion
of the Decision reads:
Accordingly, therefore, the petition is hereby granted. The Director-General of the Philippine National
Police is hereby directed to immediately issue absorption orders to the petitioners.
Resolution No. 99-061 is declared void ab initio.
IT IS SO ORDERED.15
260
On appeal, the CA, in the assailed June 18, 2003 Decision, 16 reversed the ruling of the trial court and ruled
that a writ of mandamus could not be issued because petitioners had not established with distinct clarity their
right to be absorbed into the PNP. The CA disposed of the appeal as follows:
WHEREFORE, the appeal is GRANTED. The decision of the trial court dated November 15, 2001 is hereby
REVERSED and SET ASIDE.
SO ORDERED.17
The appellate court later denied petitioners’ motion for reconsideration in the likewise assailed January 15,
2004 Resolution.18
Aggrieved, petitioners brought the case before us via a petition for review on certiorari, raising for our
disposition the following issues:
I
WHETHER OR NOT PETITIONERS HAVE A CLEAR LEGAL RIGHT TO BE ABSORBED IN
THE PHILIPPINE NATIONAL POLICE.
II.
WHETHER OR NOT RESOLUTION NO. 99-061 IS VOID FOR BEING VIOLATIVE OF THE
PROVISIONS OF R.A. 7965 AND ITS IMPLEMENTING RESOLUTIONS NO. 98-037 AND
98-105.
III.
WHETHER OR NOT PETITIONERS HAVE A CAUSE OF ACTION FOR MANDAMUS TO
COMPEL THE RESPONDENT TO ABSORB THE PETITIONERS IN THE PHILIPPINE
NATIONAL POLICE.19
The petition has no merit.
We have repeatedly stressed in our prior decisions that the remedy of mandamus is employed only to
compel the performance, when refused, of a ministerial duty, but not to require anyone to fulfill a
discretionary one. The issuance of the writ is simply a command to exercise a power already possessed and
to perform a duty already imposed.20 In Manila International Airport Authority v. Rivera Village Lessee
Homeowners Association, Inc.,21 we emphasized, through the erudite and eloquent ponencia of Justice
Dante O. Tinga, that the writ can be issued only when the applicant’s legal right to the performance of a
particular act sought to be compelled is clear and complete, one which is indubitably granted by law or is
inferable as a matter of law, thus:
In order that a writ of mandamus may aptly issue, it is essential that, on the one hand, petitioner has a clear
legal right to the claim that is sought and that, on the other hand, respondent has an imperative duty to
perform that which is demanded of him. Mandamus will not issue to enforce a right, or to compel
compliance with a duty, which is questionable or over which a substantial doubt exists. The principal
function of the writ of mandamus is to command and to expedite, not to inquire and to adjudicate. Thus, it is
neither the office nor the aim of the writ to secure a legal right but to implement that which is already
established. Unless the right to relief sought is unclouded, mandamus will not issue. 22
Viewed in light of the said guideposts, the PNP Chief’s issuance of the orders for the absorption of herein
petitioners in the police force is not compellable by a writ of mandamus precisely because the same does not
involve a performance of a ministerial duty. Let it be noted that petitioners were discharged from the PC
service, subsequently cleared of the charges against them, applied for reinstatement but their applications
were not acted upon until the integration of the PC into the PNP in 1990 when R.A. No. 697523 was enacted.
Thus, we no longer speak of the reinstatement of the petitioners to the service because the Philippine
Constabulary no longer exists, but of their employment in the PNP which is, as we held in Gloria v. De
Guzman,24 technically an issuance of a new appointment. The power to appoint is essentially discretionary
to be performed by the officer in which it is vested according to his best lights, the only condition being that
the appointee should possess the qualifications required by law. 25 Consequently, it cannot be the subject of
an application for a writ of mandamus.26
Furthermore, the petitioners do not have a clear legal right over the issuance of the absorption
orders.1âwphi1 They cannot claim the right to be issued an appointment based on the NAPOLCOM
issuances, specifically Resolution Nos. 98-037 and 98-105. Suffice it to state that R.A. No. 6975 clearly
provides that the power to appoint PNP personnel with the rank of "Police Officer I" to "Senior Police
Officer IV" to which petitioners may be appointed27 is vested in the PNP regional director or in the Chief of
the PNP as the case may be, and not in the NAPOLCOM, thus:
Section 31. Appointment of PNP Officers and Members.—The appointment of the officers and members of
the PNP shall be effected in the following manner:
(a) Police Officer I to Senior Police Officer IV.—Appointed by the PNP regional director for regional
personnel or by the Chief of the PNP for the national headquarters personnel and attested by the Civil
Service Commission.
x x x28
Even if, for the sake of argument, petitioners can derive a right from NAPOLCOM Resolution Nos. 98-037
and 98-105, still their right collapses and their mandamus petition becomes moot with the issuance by
NAPOLCOM of Resolution No. 99-061 recalling the approval of their absorption. The trial court should
then have immediately dismissed the mandamus petition when the OSG submitted a copy of Resolution No.
99-061 because well-settled is the rule that courts will not resolve a moot question. 29
Also improper is the trial court’s declaration that NAPOLCOM Resolution No. 99-061 is void ab initio. In
the petition filed below, only the Chief of the PNP is impleaded as the party-defendant.30 NAPOLCOM was
never impleaded. As it was the latter, a separate entity, which had issued Resolution No. 99-061,
NAPOLCOM was an indispensable party over which the trial court should have acquired jurisdiction. Since
it was not impleaded, NAPOLCOM remains a stranger to the case, and strangers are not bound by the
judgment rendered by the court.31 The absence of an indispensable party renders all subsequent actions of
the court null and void for want of authority to act, not only as to the absent parties but even as to those
present.32
WHEREFORE, premises considered, the petition is DENIED. The June 18, 2003 Decision and the January
15, 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 68989 are AFFIRMED.
SO ORDERED.

261
 FIRST DIVISION
G.R. No. 156052 March 7, 2007
SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO, and BONIFACIO S.
TUMBOKON, Petitioners,
vs.
HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of Manila, Respondent.
DECISION
CORONA, J.:
In this original petition for mandamus,1 petitioners Social Justice Society (SJS), Vladimir Alarique T.
Cabigao and Bonifacio S. Tumbokon seek to compel respondent Hon. Jose L. Atienza, Jr., mayor of the City
of Manila, to enforce Ordinance No. 8027.
The antecedents are as follows.
On November 20, 2001, the Sangguniang Panlungsod of Manila enacted Ordinance No. 8027.2 Respondent
mayor approved the ordinance on November 28, 2001. 3 It became effective on December 28, 2001, after its
publication.4
Ordinance No. 8027 was enacted pursuant to the police power delegated to local government units, a
principle described as the power inherent in a government to enact laws, within constitutional limits, to
promote the order, safety, health, morals and general welfare of the society.5 This is evident from Sections 1
and 3 thereof which state:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety, and
general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land use of
[those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the east, Beata St.
in the south, Palumpong St. in the southwest, and Estero de Pancacan in the west[,] PNR Railroad in the
northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in
the southwest. The area of Punta, Sta. Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St.,
and F. Manalo Street, are hereby reclassified from Industrial II to Commercial I.
xxx xxx xxx
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no longer
permitted under Section 1 hereof, are hereby given a period of six (6) months from the date of effectivity of
this Ordinance within which to cease and desist from the operation of businesses which are hereby in
consequence, disallowed.
Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed the
owners and operators of businesses disallowed under Section 1 to cease and desist from operating their
businesses within six months from the date of effectivity of the ordinance. Among the businesses situated in
the area are the so-called "Pandacan Terminals" of the oil companies Caltex (Philippines), Inc., Petron
Corporation and Pilipinas Shell Petroleum Corporation.
However, on June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a
memorandum of understanding (MOU)6 with the oil companies in which they agreed that "the scaling down
of the Pandacan Terminals [was] the most viable and practicable option." Under the MOU, the oil
companies agreed to perform the following:
Section 1. - Consistent with the objectives stated above, the OIL COMPANIES shall, upon signing of this
MOU, undertake a program to scale down the Pandacan Terminals which shall include, among others, the
immediate removal/decommissioning process of TWENTY EIGHT (28) tanks starting with the LPG spheres
and the commencing of works for the creation of safety buffer and green zones surrounding the Pandacan
Terminals. xxx
Section 2. – Consistent with the scale-down program mentioned above, the OIL COMPANIES shall
establish joint operations and management, including the operation of common, integrated and/or shared
facilities, consistent with international and domestic technical, safety, environmental and economic
considerations and standards. Consequently, the joint operations of the OIL COMPANIES in the Pandacan
262
Terminals shall be limited to the common and integrated areas/facilities. A separate agreement covering the
commercial and operational terms and conditions of the joint operations, shall be entered into by the OIL
COMPANIES.
Section 3. - The development and maintenance of the safety and green buffer zones mentioned therein,
which shall be taken from the properties of the OIL COMPANIES and not from the surrounding
communities, shall be the sole responsibility of the OIL COMPANIES.
The City of Manila and the DOE, on the other hand, committed to do the following:
Section 1. - The City Mayor shall endorse to the City Council this MOU for its appropriate action with the
view of implementing the spirit and intent thereof.
Section 2. - The City Mayor and the DOE shall, consistent with the spirit and intent of this MOU, enable the
OIL COMPANIES to continuously operate in compliance with legal requirements, within the limited area
resulting from the joint operations and the scale down program.
Section 3. - The DOE and the City Mayor shall monitor the OIL COMPANIES’ compliance with the
provisions of this MOU.
Section 4. - The CITY OF MANILA and the national government shall protect the safety buffer and green
zones and shall exert all efforts at preventing future occupation or encroachment into these areas by illegal
settlers and other unauthorized parties.
The Sangguniang Panlungsod ratified the MOU in Resolution No. 97.7 In the same resolution,
the Sangguniandeclared that the MOU was effective only for a period of six months starting July 25,
2002.8 Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No. 139 extending the validity
of Resolution No. 97 to April 30, 2003 and authorizing Mayor Atienza to issue special business permits to
the oil companies. Resolution No. 13, s. 2003 also called for a reassessment of the ordinance. 10
Meanwhile, petitioners filed this original action for mandamus on December 4, 2002 praying that Mayor
Atienza be compelled to enforce Ordinance No. 8027 and order the immediate removal of the terminals of
the oil companies.11
The issues raised by petitioners are as follows:
1. whether respondent has the mandatory legal duty to enforce Ordinance No. 8027 and order the
removal of the Pandacan Terminals, and
2. whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal Ordinance
No. 8027.12
Petitioners contend that respondent has the mandatory legal duty, under Section 455 (b) (2) of the Local
Government Code (RA 7160),13 to enforce Ordinance No. 8027 and order the removal of the Pandacan
Terminals of the oil companies. Instead, he has allowed them to stay.
Respondent’s defense is that Ordinance No. 8027 has been superseded by the MOU and the
resolutions.14However, he also confusingly argues that the ordinance and MOU are not inconsistent with
each other and that the latter has not amended the former. He insists that the ordinance remains valid and in
full force and effect and that the MOU did not in any way prevent him from enforcing and implementing it.
He maintains that the MOU should be considered as a mere guideline for its full implementation. 15
Under Rule 65, Section 316 of the Rules of Court, a petition for mandamus may be filed when any tribunal,
corporation, board, officer or person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust or station. Mandamus is an extraordinary writ
that is employed to compel the performance, when refused, of a ministerial duty that is already imposed on
the respondent and there is no other plain, speedy and adequate remedy in the ordinary course of law. The
petitioner should have a well-defined, clear and certain legal right to the performance of the act and it must
be the clear and imperative duty of respondent to do the act required to be done. 17
Mandamus will not issue to enforce a right, or to compel compliance with a duty, which is questionable or
over which a substantial doubt exists. The principal function of the writ of mandamus is to command and to
expedite, not to inquire and to adjudicate; thus, it is neither the office nor the aim of the writ to secure a legal
right but to implement that which is already established. Unless the right to the relief sought is
unclouded, mandamus will not issue.18
To support the assertion that petitioners have a clear legal right to the enforcement of the ordinance,
petitioner SJS states that it is a political party registered with the Commission on Elections and has its
offices in Manila. It claims to have many members who are residents of Manila. The other petitioners,
Cabigao and Tumbokon, are allegedly residents of Manila.
We need not belabor this point. We have ruled in previous cases that when a mandamus proceeding
concerns a public right and its object is to compel a public duty, the people who are interested in the
execution of the laws are regarded as the real parties in interest and they need not show any specific
interest.19 Besides, as residents of Manila, petitioners have a direct interest in the enforcement of the city’s
ordinances. Respondent never questioned the right of petitioners to institute this proceeding.
On the other hand, the Local Government Code imposes upon respondent the duty, as city mayor, to
"enforce all laws and ordinances relative to the governance of the city.">20 One of these is Ordinance No.
8027. As the chief executive of the city, he has the duty to enforce Ordinance No. 8027 as long as it has not
been repealed by the Sanggunian or annulled by the courts.21 He has no other choice. It is his ministerial duty to do so. In Dimaporo v.
Mitra, Jr.,22 we stated the reason for this:
These officers cannot refuse to perform their duty on the ground of an alleged invalidity of the statute imposing the duty. The reason for this is obvious. It might seriously
hinder the transaction of public business if these officers were to be permitted in all cases to question the constitutionality of statutes and ordinances imposing duties upon
them and which have not judicially been declared unconstitutional. Officers of the government from the highest to the lowest are creatures of the law and are bound to obey
it.23
The question now is whether the MOU entered into by respondent with the oil companies and the subsequent resolutions passed by the Sanggunian have made the
respondent’s duty to enforce Ordinance No. 8027 doubtful, unclear or uncertain. This is also connected to the second issue raised by petitioners, that is, whether the MOU
and Resolution Nos. 97, s. 2002 and 13, s. 2003 of the Sanggunian can amend or repeal Ordinance No. 8027.
We need not resolve this issue. Assuming that the terms of the MOU were inconsistent with Ordinance No. 8027, the resolutions which ratified it and made it binding on
the City of Manila expressly gave it full force and effect only until April 30, 2003. Thus, at present, there is nothing that legally hinders respondent from enforcing
Ordinance No. 8027.24
Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world, witnessed the horror of the September 11, 2001 attack on the Twin Towers of
the World Trade Center in New York City. The objective of the ordinance is to protect the residents of Manila from the catastrophic devastation that will surely occur in
case of a terrorist attack25 on the Pandacan Terminals. No reason exists why such a protective measure should be delayed.
WHEREFORE, the petition is hereby GRANTED. Respondent Hon. Jose L. Atienza, Jr., as mayor of the City of Manila, is directed to immediately enforce Ordinance No.
8027.
SO ORDERED.

263
 EN BANC
G.R. No. 193462 February 4, 2014
DENNIS A.B. FUNA, Petitioner,
vs.
MANILA ECONOMIC AND CULTURAL OFFICE and the COMMISSION ON AUDIT, Respondents.
DECISION
PEREZ, J.:
This is a petition for mandamus1 to compel:
1.) the Commission on Audit (COA) to audit and examine the funds of the Manila Economic and
Cultural Office (MECO), and
2.) the MECO to submit to such audit and examination.
The antecedents:
Prelude
The aftermath of the Chinese civil war2 left the country of China with two (2) governments in a stalemate
espousing competing assertions of sovereignty.3 On one hand is the communist People’s Republic of China
(PROC) which controls the mainland territories, and on the other hand is the nationalist Republic of China
(ROC) which controls the island of Taiwan. For a better part of the past century, both the PROC and ROC
adhered to a policy of "One China" i.e., the view that there is only one legitimate government in China, but
differed in their respective interpretation as to which that government is. 4
With the existence of two governments having conflicting claims of sovereignty over one country, came the
question as to which of the two is deserving of recognition as that country’s legitimate government. Even
after its relocation to Taiwan, the ROC used to enjoy diplomatic recognition from a majority of the world’s
states, partly due to being a founding member of the United Nations (UN). 5 The number of states partial to
the PROC’s version of the One China policy, however, gradually increased in the 1960s and 70s, most
notably after the UN General Assembly adopted the monumental Resolution 2758 in 1971. 6 Since then,
almost all of the states that had erstwhile recognized the ROC as the legitimate government of China,
terminated their official relations with the said government, in favor of establishing diplomatic relations with
the PROC.7 The Philippines is one of such states.
The Philippines formally ended its official diplomatic relations with the government in Taiwan on 9 June
1975, when the country and the PROC expressed mutual recognition thru the Joint Communiqué of the
Government of the Republic of the Philippines and the Government of the People’s Republic of China (Joint
Communiqué).8
Under the Joint Communiqué, the Philippines categorically stated its adherence to the One China policy of
the PROC. The pertinent portion of the Joint Communiqué reads: 9
The Philippine Government recognizes the Government of the People’s Republic of China as the sole legal
government of China, fully understands and respects the position of the Chinese Government that there is
but one China and that Taiwan is an integral part of Chinese territory, and decides to remove all its official
representations from Taiwan within one month from the date of signature of this communiqué. (Emphasis
supplied)
The Philippines’ commitment to the One China policy of the PROC, however, did not preclude the country
from keeping unofficial relations with Taiwan on a "people-to-people" basis.10 Maintaining ties with Taiwan
that is permissible by the terms of the Joint Communiqué, however, necessarily required the Philippines, and
Taiwan, to course any such relations thru offices outside of the official or governmental organs.
Hence, despite ending their diplomatic ties, the people of Taiwan and of the Philippines maintained an
unofficial relationship facilitated by the offices of the Taipei Economic and Cultural Office, for the former,
and the MECO, for the latter.11
The MECO12 was organized on 16 December 1997 as a non-stock, non-profit corporation under Batas
Pambansa Blg. 68 or the Corporation Code.13 The purposes underlying the incorporation of MECO, as stated
in its articles of incorporation,14 are as follows:
264
1. To establish and develop the commercial and industrial interests of Filipino nationals here and
abroad, and assist on all measures designed to promote and maintain the trade relations of the
country with the citizens of other foreign countries;
2. To receive and accept grants and subsidies that are reasonably necessary in carrying out the
corporate purposes provided they are not subject to conditions defeatist for or incompatible with
said purpose;
3. To acquire by purchase, lease or by any gratuitous title real and personal properties as may be
necessary for the use and need of the corporation, and to dispose of the same in like manner when
they are no longer needed or useful; and
4. To do and perform any and all acts which are deemed reasonably necessary to carry out the
purposes. (Emphasis supplied)
From the moment it was incorporated, the MECO became the corporate entity "entrusted" by the Philippine
government with the responsibility of fostering "friendly" and "unofficial" relations with the people of
Taiwan, particularly in the areas of trade, economic cooperation, investment, cultural, scientific and
educational exchanges.15To enable it to carry out such responsibility, the MECO was "authorized" by the
government to perform certain "consular and other functions" that relates to the promotion, protection and
facilitation of Philippine interests in Taiwan.16
At present, it is the MECO that oversees the rights and interests of Overseas Filipino Workers (OFWs) in
Taiwan; promotes the Philippines as a tourist and investment destination for the Taiwanese; and facilitates
the travel of Filipinos and Taiwanese from Taiwan to the Philippines, and vice versa. 17
Facts Leading to the Mandamus Petition
On 23 August 2010, petitioner sent a letter18 to the COA requesting for a "copy of the latest financial and
audit report" of the MECO invoking, for that purpose, his "constitutional right to information on matters of
public concern." The petitioner made the request on the belief that the MECO, being under the "operational
supervision" of the Department of Trade and Industry (DTI), is a government owned and controlled
corporation (GOCC) and thus subject to the audit jurisdiction of the COA. 19
Petitioner’s letter was received by COA Assistant Commissioner Jaime P. Naranjo, the following day.
On 25 August 2010, Assistant Commissioner Naranjo issued a memorandum 20 referring the petitioner’s
request to COA Assistant Commissioner Emma M. Espina for "further disposition." In this memorandum,
however, Assistant Commissioner Naranjo revealed that the MECO was "not among the agencies audited by
any of the three Clusters of the Corporate Government Sector."21
On 7 September 2010, petitioner learned about the 25 August 2010 memorandum and its contents.
Mandamus Petition
Taking the 25 August 2010 memorandum as an admission that the COA had never audited and examined the
accounts of the MECO, the petitioner filed the instant petition for mandamus on 8 September 2010.
Petitioner filed the suit in his capacities as "taxpayer, concerned citizen, a member of the Philippine Bar and
law book author."22 He impleaded both the COA and the MECO.
Petitioner posits that by failing to audit the accounts of the MECO, the COA is neglecting its duty under
Section 2(1), Article IX-D of the Constitution to audit the accounts of an otherwise bona fide GOCC or
government instrumentality. It is the adamant claim of the petitioner that the MECO is a GOCC without an
original charter or, at least, a government instrumentality, the funds of which partake the nature of public
funds.23
According to petitioner, the MECO possesses all the essential characteristics of a GOCC and an
instrumentality under the Executive Order No. (EO) 292, s. 1987 or the Administrative Code: it is a non-
stock corporation vested with governmental functions relating to public needs; it is controlled by the
government thru a board of directors appointed by the President of the Philippines; and while not integrated
within the executive departmental framework, it is nonetheless under the operational and policy supervision
of the DTI.24 As petitioner substantiates:
 1. The MECO is vested with government functions. It performs functions that are equivalent to
those of an embassy or a consulate of the Philippine government. 25 A reading of the authorized
functions of the MECO as found in EO No. 15, s. 2001, reveals that they are substantially the same
functions performed by the Department of Foreign Affairs (DFA), through its diplomatic and
consular missions, per the Administrative Code.26
2. The MECO is controlled by the government. It is the President of the Philippines that actually
appoints the directors of the MECO, albeit indirectly, by way of "desire letters" addressed to the
MECO’s board of directors.27 An illustration of this exercise is the assumption by Mr. Antonio
Basilio as chairman of the board of directors of the MECO in 2001, which was accomplished when
former President Gloria Macapagal-Arroyo, through a memorandum28 dated 20 February 2001,
expressed her "desire" to the board of directors of the MECO for the election of Mr. Basilio as
chairman.29
3. The MECO is under the operational and policy supervision of the DTI. The MECO was placed
under the operational supervision of the DTI by EO No. 328, s. of 2004, and again under the policy
supervision of the same department by EO No. 426, s. 2005. 30
To further bolster his position that the accounts of the MECO ought to be audited by the COA, the petitioner
calls attention to the practice, allegedly prevailing in the United States of America, wherein the American
Institute in Taiwan (AIT)—the counterpart entity of the MECO in the United States—is supposedly audited
by that country’s Comptroller General.31 Petitioner claims that this practice had been confirmed in a decision
of the United States Court of Appeals for the District of Columbia Circuit, in the case of Wood, Jr., ex rel.
United States of America v. The American Institute in Taiwan, et al. 32
The Position of the MECO
The MECO prays for the dismissal of the mandamus petition on procedural and substantial grounds.
On procedure, the MECO argues that the mandamus petition was prematurely filed. 33
The MECO posits that a cause of action for mandamus to compel the performance of a ministerial duty
required by law only ripens once there has been a refusal by the tribunal, board or officer concerned to
perform such a duty.34The MECO claims that there was, in this case, no such refusal either on its part or on
the COA’s because the petitioner never made any demand for it to submit to an audit by the COA or for the
COA to perform such an audit, prior to filing the instant mandamus petition. 35 The MECO further points out
that the only "demand" that the petitioner made was his request to the COA for a copy of the MECO’s latest
financial and audit report— which request was not even finally disposed of by the time the instant petition
was filed.36
On the petition’s merits, the MECO denies the petitioner’s claim that it is a GOCC or a government
instrumentality.37While performing public functions, the MECO maintains that it is not owned or controlled
by the government, and its funds are private funds.38 The MECO explains:
1. It is not owned or controlled by the government. Contrary to the allegations of the petitioner, the
President of the Philippines does not appoint its board of directors. 39 The "desire letter" that the
President transmits is merely recommendatory and not binding on the corporation. 40 As a
corporation organized under the Corporation Code, matters relating to the election of its directors
and officers, as well as its membership, are governed by the appropriate provisions of the said
code, its articles of incorporation and its by-laws.41 Thus, it is the directors who elect the
corporation’s officers; the members who elect the directors; and the directors who admit the
members by way of a unanimous resolution. All of its officers, directors, and members are private
individuals and are not government officials.42
2. The government merely has policy supervision over it. Policy supervision is a lesser form of
supervision wherein the government’s oversight is limited only to ensuring that the corporation’s
activities are in tune with the country’s commitments under the One China policy of the
PROC.43 The day-to-day operations of the corporation, however, remain to be controlled by its
duly elected board of directors.44
265
The MECO emphasizes that categorizing it as a GOCC or a government instrumentality can potentially
violate the country’s commitment to the One China policy of the PROC. 45 Thus, the MECO cautions against
applying to the present mandamus petition the pronouncement in the Wood decision regarding the alleged
auditability of the AIT in the United States.46
The Position of the COA
The COA, on the other hand, advances that the mandamus petition ought to be dismissed on procedural
grounds and on the ground of mootness.
The COA argues that the mandamus petition suffers from the following procedural defects:
1. The petitioner lacks locus standi to bring the suit. The COA claims that the petitioner has not
shown, at least in a concrete manner, that he had been aggrieved or prejudiced by its failure to
audit the accounts of the MECO.47
2. The petition was filed in violation of the doctrine of hierarchy of courts. The COA faults the
filing of the instant mandamus petition directly with this Court, when such petition could have very
well been presented, at the first instance, before the Court of Appeals or any Regional Trial
Court.48 The COA claims that the petitioner was not able to provide compelling reasons to justify a
direct resort to the Supreme Court.49
At any rate, the COA argues that the instant petition already became moot when COA Chairperson Maria
Gracia M. Pulido-Tan (Pulido-Tan) issued Office Order No. 2011-69850 on 6 October 2011.51 The COA
notes that under Office Order No. 2011-698, Chairperson Pulido-Tan already directed a team of auditors to
proceed to Taiwan, specifically for the purpose of auditing the accounts of, among other government
agencies based therein, the MECO.52
In conceding that it has audit jurisdiction over the accounts of the MECO, however, the COA clarifies that it
does not consider the former as a GOCC or a government instrumentality. On the contrary, the COA
maintains that the MECO is a non-governmental entity.53
The COA argues that, despite being a non-governmental entity, the MECO may still be audited with respect
to the "verification fees" for overseas employment documents that it collects from Taiwanese employers on
behalf of the DOLE.54 The COA claims that, under Joint Circular No. 3-99,55 the MECO is mandated to
remit to the Department of Labor and Employment (DOLE) a portion of such "verification fees."56 The
COA, therefore, classifies the MECO as a non-governmental entity "required to pay xxx government share"
subject to a partial audit of its accounts under Section 26 of the Presidential Decree No. 1445 or the State
Audit Code of the Philippines (Audit Code).57
OUR RULING
We grant the petition in part. We declare that the MECO is a non-governmental entity. However, under
existing laws, the accounts of the MECO pertaining to the "verification fees" it collects on behalf of the
DOLE as well as the fees it was authorized to collect under Section 2(6) of EO No. 15, s. 2001, are subject
to the audit jurisdiction of the COA. Such fees pertain to the government and should be audited by the COA.
I
We begin with the preliminary issues.
Mootness of Petition
The first preliminary issue relates to the alleged mootness of the instant mandamus petition, occasioned by
the COA’s issuance of Office Order No. 2011-698. The COA claims that by issuing Office Order No. 2011-
698, it had already conceded its jurisdiction over the accounts of the MECO and so fulfilled the objective of
the instant petition.58 The COA thus urges that the instant petition be dismissed for being moot and
academic.59
We decline to dismiss the mandamus petition on the ground of mootness.
A case is deemed moot and academic when, by reason of the occurrence of a supervening event, it ceases to
present any justiciable controversy.60 Since they lack an actual controversy otherwise cognizable by courts,
moot cases are, as a rule, dismissible.61
The rule that requires dismissal of moot cases, however, is not absolute. It is subject to exceptions. In David
v. Macapagal-Arroyo,62 this Court comprehensively captured these exceptions scattered throughout our
jurisprudence:
The "moot and academic" principle is not a magical formula that can automatically dissuade the courts in
resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there is a grave violation
of the Constitution;63second, the exceptional character of the situation and the paramount public interest is
involved;64 third, when constitutional issue raised requires formulation of controlling principles to guide the
bench, the bar, and the public;65and fourth, the case is capable of repetition yet evading review.66
In this case, We find that the issuance by the COA of Office Order No. 2011-698 indeed qualifies as a
supervening event that effectively renders moot and academic the main prayer of the instant mandamus
petition. A writ of mandamus to compel the COA to audit the accounts of the MECO would certainly be a
mere superfluity, when the former had already obliged itself to do the same.
Be that as it may, this Court refrains from dismissing outright the petition. We believe that the mandamus
petition was able to craft substantial issues presupposing the commission of a grave violation of the
Constitution and involving paramount public interest, which need to be resolved nonetheless:
First. The petition makes a serious allegation that the COA had been remiss in its constitutional or legal duty
to audit and examine the accounts of an otherwise auditable entity in the MECO.
Second. There is paramount public interest in the resolution of the issue concerning the failure of the COA
to audit the accounts of the MECO. The propriety or impropriety of such a refusal is determinative of
whether the COA was able to faithfully fulfill its constitutional role as the guardian of the public treasury, in
which any citizen has an interest.
Third. There is also paramount public interest in the resolution of the issue regarding the legal status of the
MECO; a novelty insofar as our jurisprudence is concerned. We find that the status of the MECO—whether
it may be considered as a government agency or not—has a direct bearing on the country’s commitment to
the One China policy of the PROC.67
An allegation as serious as a violation of a constitutional or legal duty, coupled with the pressing public
interest in the resolution of all related issues, prompts this Court to pursue a definitive ruling thereon, if not
for the proper guidance of the government or agency concerned, then for the formulation of controlling
principles for the education of the bench, bar and the public in general. 68 For this purpose, the Court invokes
its symbolic function.69
If the foregoing reasons are not enough to convince, We still add another:
Assuming that the allegations of neglect on the part of the COA were true, Office Order No. 2011-698 does
not offer the strongest certainty that they would not be replicated in the future. In the first place, Office
Order No. 2011-698 did not state any legal justification as to why, after decades of not auditing the accounts
of the MECO, the COA suddenly decided to do so. Neither does it state any determination regarding the true
status of the MECO. The justifications provided by the COA, in fact, only appears in the memorandum 70 it
submitted to this Court for purposes of this case.
Thus, the inclusion of the MECO in Office Order No. 2011-698 appears to be entirely dependent upon the
judgment of the incumbent chairperson of the COA; susceptible of being undone, with or without reason, by
her or even her successor. Hence, the case now before this Court is dangerously capable of being repeated
yet evading review.
Verily, this Court should not dismiss the mandamus petition on the ground of mootness.
Standing of Petitioner
The second preliminary issue is concerned with the standing of the petitioner to file the instant mandamus
petition. The COA claims that petitioner has none, for the latter was not able to concretely establish that he
had been aggrieved or prejudiced by its failure to audit the accounts of the MECO. 71
Related to the issue of lack of standing is the MECO’s contention that petitioner has no cause of action to
file the instant mandamus petition. The MECO faults petitioner for not making any demand for it to submit
to an audit by the COA or for the COA to perform such an audit, prior to filing the instant petition. 72
266
We sustain petitioner’s standing, as a concerned citizen, to file the instant petition.
The rules regarding legal standing in bringing public suits, or locus standi, are already well-defined in our
case law. Again, We cite David, which summarizes jurisprudence on this point: 73
By way of summary, the following rules may be culled from the cases decided by this
Court.1a\^/phi1 Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue,
provided that the following requirements are met:
(1) the cases involve constitutional issues;
(2) for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax
measure is unconstitutional;
(3) for voters, there must be a showing of obvious interest in the validity of the election law in
question;
(4) for concerned citizens, there must be a showing that the issues raised are of transcendental
importance which must be settled early; and
(5) for legislators, there must be a claim that the official action complained of infringes upon their
prerogatives as legislators.
We rule that the instant petition raises issues of transcendental importance, involved as they are with the
performance of a constitutional duty, allegedly neglected, by the COA. Hence, We hold that the petitioner,
as a concerned citizen, has the requisite legal standing to file the instant mandamus petition.
To be sure, petitioner does not need to make any prior demand on the MECO or the COA in order to
maintain the instant petition. The duty of the COA sought to be compelled by mandamus, emanates from the
Constitution and law, which explicitly require, or "demand," that it perform the said duty. To the mind of
this Court, petitioner already established his cause of action against the COA when he alleged that the COA
had neglected its duty in violation of the Constitution and the law.
Principle of Hierarchy of Courts
The last preliminary issue is concerned with the petition’s non-observance of the principle of hierarchy of
courts. The COA assails the filing of the instant mandamus petition directly with this Court, when such
petition could have very well been presented, at the first instance, before the Court of Appeals or any
Regional Trial Court.74 The COA claims that the petitioner was not able to provide compelling reasons to
justify a direct resort to the Supreme Court.75
In view of the transcendental importance of the issues raised in the mandamus petition, as earlier mentioned,
this Court waives this last procedural issue in favor of a resolution on the merits. 76
II
To the merits of this petition, then.
The single most crucial question asked by this case is whether the COA is, under prevailing law, mandated
to audit the accounts of the MECO. Conversely, are the accounts of the MECO subject to the audit
jurisdiction of the COA?
Law, of course, identifies which accounts of what entities are subject to the audit jurisdiction of the COA.
Under Section 2(1) of Article IX-D of the Constitution,77 the COA was vested with the "power, authority
and duty" to "examine, audit and settle" the "accounts" of the following entities:
1. The government, or any of its subdivisions, agencies and instrumentalities;
2. GOCCs with original charters;
3. GOCCs without original charters;
4. Constitutional bodies, commissions and offices that have been granted fiscal autonomy under
the Constitution; and
5. Non-governmental entities receiving subsidy or equity, directly or indirectly, from or through
the government, which are required by law or the granting institution to submit to the COA for
audit as a condition of subsidy or equity.78
The term "accounts" mentioned in the subject constitutional provision pertains to the "revenue," "receipts,"
"expenditures" and "uses of funds and property" of the foregoing entities. 79
Complementing the constitutional power of the COA to audit accounts of "non-governmental entities
receiving subsidy or equity xxx from or through the government" is Section 29(1) 80 of the Audit Code,
which grants the COA visitorial authority over the following non-governmental entities:
1. Non-governmental entities "subsidized by the government";
2. Non-governmental entities "required to pay levy or government share";
3. Non-governmental entities that have "received counterpart funds from the government"; and
4. Non-governmental entities "partly funded by donations through the government."
Section 29(1) of the Audit Code, however, limits the audit of the foregoing non-governmental entities only
to "funds xxx coming from or through the government."81 This section of the Audit Code is, in turn,
substantially reproduced in Section 14(1), Book V of the Administrative Code.82
In addition to the foregoing, the Administrative Code also empowers the COA to examine and audit "the
books, records and accounts" of public utilities "in connection with the fixing of rates of every nature, or in
relation to the proceedings of the proper regulatory agencies, for purposes of determining franchise tax." 83
Both petitioner and the COA claim that the accounts of the MECO are within the audit jurisdiction of the
COA, but vary on the extent of the audit and on what type of auditable entity the MECO is. The petitioner
posits that all accounts of the MECO are auditable as the latter is a bona fide GOCC or government
instrumentality.84 On the other hand, the COA argues that only the accounts of the MECO that pertain to the
"verification fees" it collects on behalf of the DOLE are auditable because the former is merely a non-
governmental entity "required to pay xxx government share" per the Audit Code. 85
We examine both contentions.
The MECO Is Not a GOCC or
Government Instrumentality
We start with the petitioner’s contention.
Petitioner claims that the accounts of the MECO ought to be audited by the COA because the former is a
GOCC or government instrumentality. Petitioner points out that the MECO is a non-stock corporation
"vested with governmental functions relating to public needs"; it is "controlled by the government thru a
board of directors appointed by the President of the Philippines"; and it operates "outside of the
departmental framework," subject only to the "operational and policy supervision of the DTI." 86 The MECO
thus possesses, petitioner argues, the essential characteristics of a bona fide GOCC and government
instrumentality.87
We take exception to petitioner’s characterization of the MECO as a GOCC or government instrumentality.
The MECO is not a GOCC or government instrumentality.
Government instrumentalities are agencies of the national government that, by reason of some "special
function or jurisdiction" they perform or exercise, are allotted "operational autonomy" and are "not
integrated within the department framework."88 Subsumed under the rubric "government instrumentality"
are the following entities:89
1. regulatory agencies,
2. chartered institutions,
3. government corporate entities or government instrumentalities with corporate powers
(GCE/GICP),90 and
4. GOCCs
The Administrative Code defines a GOCC:91
(13) Government-owned or controlled corporation refers to any agency organized as a stock or non-stock
corporation, vested with functions relating to public needs whether governmental or proprietary in nature,
and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as
in the case of stock corporations, to the extent of at least fifty-one (51) per cent of its capital stock: x x x.
The above definition is, in turn, replicated in the more recent Republic Act No. 10149 or the GOCC
Governance Act of 2011, to wit:92
267
(o) Government-Owned or -Controlled Corporation (GOCC) refers to any agency organized as a stock or
non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in
nature, and owned by the Government of the Republic of the Philippines directly or through its
instrumentalities either wholly or, where applicable as in the case of stock corporations, to the extent of at
least a majority of its outstanding capital stock: x x x.
GOCCs, therefore, are "stock or non-stock" corporations "vested with functions relating to public needs"
that are "owned by the Government directly or through its instrumentalities." 93 By definition, three attributes
thus make an entity a GOCC: first, its organization as stock or non-stock corporation;94 second, the public
character of its function; and third, government ownership over the same.
Possession of all three attributes is necessary to deem an entity a GOCC.
In this case, there is not much dispute that the MECO possesses the first and second attributes. It is the third
attribute, which the MECO lacks.
The MECO Is Organized as a Non-Stock Corporation
The organization of the MECO as a non-stock corporation cannot at all be denied. Records disclose that the
MECO was incorporated as a non-stock corporation under the Corporation Code on 16 December
1977.95 The incorporators of the MECO were Simeon R. Roxas, Florencio C. Guzon, Manuel K. Dayrit, Pio
K. Luz and Eduardo B. Ledesma, who also served as the corporation’s original members and directors. 96
The purposes for which the MECO was organized also establishes its non-profit character, to wit:97
1. To establish and develop the commercial and industrial interests of Filipino nationals here and
abroad and assist on all measures designed to promote and maintain the trade relations of the
country with the citizens of other foreign countries;
2. To receive and accept grants and subsidies that are reasonably necessary in carrying out the
corporate purposes provided they are not subject to conditions defeatist for or incompatible with
said purpose;
3. To acquire by purchase, lease or by any gratuitous title real and personal properties as may be
necessary for the use and need of the corporation, and in like manner when they are
4. To do and perform any and all acts which are deemed reasonably necessary to carry out the
purposes. (Emphasis supplied)
The purposes for which the MECO was organized are somewhat analogous to those of a trade, business or
industry chamber,98 but only on a much larger scale i.e., instead of furthering the interests of a particular line
of business or industry within a local sphere, the MECO seeks to promote the general interests of the
Filipino people in a foreign land.
Finally, it is not disputed that none of the income derived by the MECO is distributable as dividends to any
of its members, directors or officers.
Verily, the MECO is organized as a non-stock corporation.
The MECO Performs Functions with a Public Aspect.
The public character of the functions vested in the MECO cannot be doubted either. Indeed, to a certain
degree, the functions of the MECO can even be said to partake of the nature of governmental functions. As
earlier intimated, it is the MECO that, on behalf of the people of the Philippines, currently facilitates
unofficial relations with the people in Taiwan.
Consistent with its corporate purposes, the MECO was "authorized" by the Philippine government to
perform certain "consular and other functions" relating to the promotion, protection and facilitation of
Philippine interests in Taiwan.99The full extent of such authorized functions are presently detailed in
Sections 1 and 2 of EO No. 15, s. 2001:
SECTION 1. Consistent with its corporate purposes and subject to the conditions stated in Section 3 hereof,
MECO is hereby authorized to assist in the performance of the following functions:
1. Formulation and implementation of a program to attract and promote investments from Taiwan
to Philippine industries and businesses, especially in manufacturing, tourism, construction and
other preferred areas of investments;
 2. Promotion of the export of Philippine products and Filipino manpower services, including
Philippine management services, to Taiwan;
3. Negotiation and/or assistance in the negotiation and conclusion of agreements or other
arrangements concerning trade, investment, economic cooperation, technology transfer, banking
and finance, scientific, cultural, educational and other modes of cooperative endeavors between the
Philippines and Taiwan, on a people-to-people basis, in accordance with established rules and
regulations;
4. Reporting on, and identification of, employment and business opportunities in Taiwan for the
promotion of Philippine exports, manpower and management services, and tourism;
5. Dissemination in Taiwan of information on the Philippines, especially in the fields of trade,
tourism, labor, economic cooperation, and cultural, educational and scientific endeavors;
6. Conduct of periodic assessment of market conditions in Taiwan, including submission of trade
statistics and commercial reports for use of Philippine industries and businesses; and
7. Facilitation, fostering and cultivation of cultural, sports, social, and educational exchanges
between the peoples of the Philippines and Taiwan.
SECTION 2. In addition to the above-mentioned authority and subject to the conditions stated in Section 3
hereof, MECO, through its branch offices in Taiwan, is hereby authorized to perform the following
functions:
1. Issuance of temporary visitors’ visas and transit and crew list visas, and such other visa services
as may be authorized by the Department of Foreign Affairs;
2. Issuance, renewal, extension or amendment of passports of Filipino citizens in accordance with
existing regulations, and provision of such other passport services as may be required under the
circumstances;
3. Certification or affirmation of the authenticity of documents submitted for authentication;
4. Providing translation services;
5. Assistance and protection to Filipino nationals and other legal/juridical persons working or
residing in Taiwan, including making representations to the extent allowed by local and
international law on their behalf before civil and juridical authorities of Taiwan; and
6. Collection of reasonable fees on the first four (4) functions enumerated above to defray the cost
of its operations.
A perusal of the above functions of the MECO reveals its uncanny similarity to some of the functions
typically performed by the DFA itself, through the latter’s diplomatic and consular missions. 100 The
functions of the MECO, in other words, are of the kind that would otherwise be performed by the
Philippines’ own diplomatic and consular organs, if not only for the government’s acquiescence that they
instead be exercised by the MECO.
Evidently, the functions vested in the MECO are impressed with a public aspect.
The MECO Is Not Owned or Controlled by the Government Organization as a non-stock corporation and
the mere performance of functions with a public aspect, however, are not by themselves sufficient to
consider the MECO as a GOCC. In order to qualify as a GOCC, a corporation must also, if not more
importantly, be owned by the government.
The government owns a stock or non-stock corporation if it has controlling interest in the corporation. In a
stock corporation, the controlling interest of the government is assured by its ownership of at least fifty-one
percent (51%) of the corporate capital stock.101 In a non-stock corporation, like the MECO, jurisprudence
teaches that the controlling interest of the government is affirmed when "at least majority of the members
are government officials holding such membership by appointment or designation" 102 or there is otherwise
"substantial participation of the government in the selection" of the corporation’s governing board. 103
In this case, the petitioner argues that the government has controlling interest in the MECO because it is the
President of the Philippines that indirectly appoints the directors of the corporation.104 The petitioner claims
that the President appoints directors of the MECO thru "desire letters" addressed to the corporation’s
268
board.105 As evidence, the petitioner cites the assumption of one Mr. Antonio Basilio as chairman of the
board of directors of the MECO in 2001, which was allegedly accomplished when former President
Macapagal-Arroyo, through a memorandum dated 20 February 2001, expressed her "desire" to the board of
directors of the MECO for the election of Mr. Basilio as chairman. 106
The MECO, however, counters that the "desire letters" that the President transmits are merely
recommendatory and not binding on it.107 The MECO maintains that, as a corporation organized under the
Corporation Code, matters relating to the election of its directors and officers, as well as its membership, are
ultimately governed by the appropriate provisions of the said code, its articles of incorporation and its by-
laws.108
As between the contrasting arguments, We find the contention of the MECO to be the one more consistent
with the law.
The fact of the incorporation of the MECO under the Corporation Code is key. The MECO was correct in
postulating that, as a corporation organized under the Corporation Code, it is governed by the appropriate
provisions of the said code, its articles of incorporation and its by-laws. In this case, it is the by-laws109 of
the MECO that stipulates that its directors are elected by its members; its officers are elected by its directors;
and its members, other than the original incorporators, are admitted by way of a unanimous board resolution,
to wit:
SECTION II. MEMBERSHIP
Article 2. Members shall be classified as (a) Regular and (b) Honorary.
(a) Regular members – shall consist of the original incorporators and such other members who,
upon application for membership, are unanimously admitted by the Board of Directors.
(b) Honorary member – A person of distinction in business who as sympathizer of the objectives of
the corporation, is invited by the Board to be an honorary member.
SECTION III. BOARD OF DIRECTORS
Article 3. At the first meeting of the regular members, they shall organize and constitute themselves as a
Board composed of five (5) members, including its Chairman, each of whom as to serve until such time as
his own successor shall have been elected by the regular members in an election called for the purpose. The
number of members of the Board shall be increased to seven (7) when circumstances so warrant and by
means of a majority vote of the Board members and appropriate application to and approval by the
Securities and Exchange Commission. Unless otherwise provided herein or by law, a majority vote of all
Board members present shall be necessary to carry out all Board resolutions.
During the same meeting, the Board shall also elect its own officers, including the designation of the
principal officer who shall be the Chairman. In line with this, the Chairman shall also carry the title Chief
Executive Officer. The officer who shall head the branch or office for the agency that may be established
abroad shall have the title of Director and Resident Representative. He will also be the Vice-Chairman. All
other members of the Board shall have the title of Director.
xxxx
SECTION IV. EXECUTIVE COMMITTEE
Article 5. There shall be established an Executive Committee composed of at least three (3) members of the
Board. The members of the Executive Committee shall be elected by the members of the Board among
themselves.
xxxx
SECTION VI. OFFICERS: DUTIES, COMPENSATION
Article 8. The officers of the corporation shall consist of a Chairman of the Board, Vice-Chairman, Chief
Finance Officer, and a Secretary. Except for the Secretary, who is appointed by the Chairman of the Board,
other officers and employees of the corporation shall be appointed by the Board.
The Deputy Representative and other officials and employees of a branch office or agency abroad are
appointed solely by the Vice Chairman and Resident Representative concerned. All such appointments
however are subject to ratification by the Board.
It is significant to note that none of the original incorporators of the MECO were shown to be government
officials at the time of the corporation’s organization. Indeed, none of the members, officers or board of
directors of the MECO, from its incorporation up to the present day, were established as government
appointees or public officers designated by reason of their office. There is, in fact, no law or executive order
that authorizes such an appointment or designation. Hence, from a strictly legal perspective, it appears that
the presidential "desire letters" pointed out by petitioner—if such letters even exist outside of the case of Mr.
Basilio—are, no matter how strong its persuasive effect may be, merely recommendatory.
The MECO Is Not a Government Instrumentality; It Is a Sui Generis Entity.
The categorical exclusion of the MECO from a GOCC makes it easier to exclude the same from any other
class of government instrumentality. The other government instrumentalities i.e., the regulatory agencies,
chartered institutions and GCE/GICP are all, by explicit or implicit definition, creatures of the law.110 The
MECO cannot be any other instrumentality because it was, as mentioned earlier, merely incorporated under
the Corporation Code.
Hence, unless its legality is questioned, and in this case it was not, the fact that the MECO is operating under
the policy supervision of the DTI is no longer a relevant issue to be reckoned with for purposes of this case.
For whatever it is worth, however, and without justifying anything, it is easy enough for this Court to
understand the rationale, or necessity even, of the executive branch placing the MECO under the policy
supervision of one of its agencies.
It is evident, from the peculiar circumstances surrounding its incorporation, that the MECO was not intended
to operate as any other ordinary corporation. And it is not. Despite its private origins, and perhaps
deliberately so, the MECO was "entrusted"111 by the government with the "delicate and
precarious"112 responsibility of pursuing "unofficial"113 relations with the people of a foreign land whose
government the Philippines is bound not to recognize. The intricacy involved in such undertaking is the
possibility that, at any given time in fulfilling the purposes for which it was incorporated, the MECO may
find itself engaged in dealings or activities that can directly contradict the Philippines’ commitment to the
One China policy of the PROC. Such a scenario can only truly be avoided if the executive department
exercises some form of oversight, no matter how limited, over the operations of this otherwise private entity.
Indeed, from hindsight, it is clear that the MECO is uniquely situated as compared with other private
corporations. From its over-reaching corporate objectives, its special duty and authority to exercise certain
consular functions, up to the oversight by the executive department over its operations—all the while
maintaining its legal status as a non-governmental entity—the MECO is, for all intents and purposes, sui
generis.
Certain Accounts of the MECO May
Be Audited By the COA.
We now come to the COA’s contention.
The COA argues that, despite being a non-governmental entity, the MECO may still be audited with respect
to the "verification fees" for overseas employment documents that the latter collects from Taiwanese
employers on behalf of the DOLE.114 The COA claims that, under Joint Circular No. 3-99, the MECO is
mandated to remit to the national government a portion of such "verification fees." 115 The COA, therefore,
classifies the MECO as a non-governmental entity "required to pay xxx government share" per the Audit
Code.116
We agree that the accounts of the MECO pertaining to its collection of "verification fees" is subject to the
audit jurisdiction of the COA. However, We digress from the view that such accounts are the only ones that
ought to be audited by the COA. Upon careful evaluation of the information made available by the records
vis-à-vis the spirit and the letter of the laws and executive issuances applicable, We find that the accounts of
the MECO pertaining to the fees it was authorized to collect under Section 2(6) of EO No. 15, s. 2001, are
likewise subject to the audit jurisdiction of the COA.
Verification Fees Collected by the MECO
269
In its comment,117 the MECO admitted that roughly 9% of its income is derived from its share in the
"verification fees" for overseas employment documents it collects on behalf of the DOLE.
The "verification fees" mentioned here refers to the "service fee for the verification of overseas employment
contracts, recruitment agreement or special powers of attorney" that the DOLE was authorized to collect
under Section 7 of EO No. 1022,118 which was issued by President Ferdinand E. Marcos on 1 May 1985.
These fees are supposed to be collected by the DOLE from the foreign employers of OFWs and are intended
to be used for "the promotion of overseas employment and for welfare services to Filipino workers within
the area of jurisdiction of [concerned] foreign missions under the administration of the [DOLE]." 119
Joint Circular 3-99 was issued by the DOLE, DFA, the Department of Budget Management, the Department
of Finance and the COA in an effort to implement Section 7 of Executive Order No. 1022. 120 Thus, under
Joint Circular 3-99, the following officials have been tasked to be the "Verification Fee Collecting Officer"
on behalf of the DOLE:121
1. The labor attaché or duly authorized overseas labor officer at a given foreign post, as duly
designated by the DOLE Secretary;
2. In foreign posts where there is no labor attaché or duly authorized overseas labor officer, the
finance officer or collecting officer of the DFA duly deputized by the DOLE Secretary as approved
by the DFA Secretary;
3. In the absence of such finance officer or collecting officer, the alternate duly designated by the
head of the foreign post.
Since the Philippines does not maintain an official post in Taiwan, however, the DOLE entered into a
"series" of Memorandum of Agreements with the MECO, which made the latter the former’s collecting
agent with respect to the "verification fees" that may be due from Taiwanese employers of OFWs. 122 Under
the 27 February 2004 Memorandum of Agreement between DOLE and the MECO, the "verification fees" to
be collected by the latter are to be allocated as follows: (a) US$ 10 to be retained by the MECO as
administrative fee, (b) US $10 to be remitted to the DOLE, and (c) US$ 10 to be constituted as a common
fund of the MECO and DOLE.123
Evidently, the entire "verification fees" being collected by the MECO are receivables of the DOLE. 124 Such
receipts pertain to the DOLE by virtue of Section 7 of EO No. 1022.
Consular Fees Collected by the MECO
Aside from the DOLE "verification fees," however, the MECO also collects "consular fees," or fees it
collects from the exercise of its delegated consular functions.
The authority behind "consular fees" is Section 2(6) of EO No. 15, s. 2001. The said section authorizes the
MECO to collect "reasonable fees" for its performance of the following consular functions:
1. Issuance of temporary visitors’ visas and transit and crew list visas, and such other visa services
as may be authorized by the DFA;
2. Issuance, renewal, extension or amendment of passports of Filipino citizens in accordance with
existing regulations, and provision of such other passport services as may be required under the
circumstances;
3. Certification or affirmation of the authenticity of documents submitted for authentication; and
4. Providing translation services.
Evidently, and just like the peculiarity that attends the DOLE "verification fees," there is no consular office
for the collection of the "consular fees." Thus, the authority for the MECO to collect the "reasonable fees,"
vested unto it by the executive order.
The "consular fees," although held and expended by the MECO by virtue of EO No. 15, s. 2001, are,
without question, derived from the exercise by the MECO of consular functions—functions it performs by
and only through special authority from the government. There was never any doubt that the visas, passports
and other documents that the MECO issues pursuant to its authorized functions still emanate from the
Philippine government itself.
Such fees, therefore, are received by the MECO to be used strictly for the purpose set out under EO No. 15,
s. 2001. They must be reasonable as the authorization requires. It is the government that has ultimate control
over the disposition of the "consular fees," which control the government did exercise when it provided in
Section 2(6) of EO No. 15, s. 2001 that such funds may be kept by the MECO "to defray the cost of its
operations."
The Accounts of the MECO Pertaining to the Verification Fees and Consular Fees May Be Audited by the
COA.
Section 14(1), Book V of the Administrative Code authorizes the COA to audit accounts of non-
governmental entities "required to pay xxx or have government share" but only with respect to "funds xxx
coming from or through the government." This provision of law perfectly fits the MECO:
First. The MECO receives the "verification fees" by reason of being the collection agent of the DOLE—a
government agency. Out of its collections, the MECO is required, by agreement, to remit a portion thereof to
the DOLE. Hence, the MECO is accountable to the government for its collections of such "verification fees"
and, for that purpose, may be audited by the COA.
Second. Like the "verification fees," the "consular fees" are also received by the MECO through the
government, having been derived from the exercise of consular functions entrusted to the MECO by the
government. Hence, the MECO remains accountable to the government for its collections of "consular fees"
and, for that purpose, may be audited by the COA.
Tersely put, the 27 February 2008 Memorandum of Agreement between the DOLE and the MECO and
Section 2(6) of EO No. 15, s. 2001, vis-à-vis, respectively, the "verification fees" and the "consular fees,"
grant and at the same time limit the authority of the MECO to collect such fees. That grant and limit require
the audit by the COA of the collections thereby generated.
Conclusion
The MECO is not a GOCC or government instrumentality. It is a sui generis private entity especially
entrusted by the government with the facilitation of unofficial relations with the people in Taiwan without
jeopardizing the country’s faithful commitment to the One China policy of the PROC. However, despite its
non-governmental character, the MECO handles government funds in the form of the "verification fees" it
collects on behalf of the DOLE and the "consular fees" it collects under Section 2(6) of EO No. 15, s. 2001.
Hence, under existing laws, the accounts of the MECO pertaining to its collection of such "verification fees"
and "consular fees" should be audited by the COA.
WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The Manila Economic and
Cultural Office is hereby declared a non-governmental entity. However, the accounts of the Manila
Economic and Cultural Office pertaining to: the verification fees contemplated by Section 7 of Executive
Order No. 1022 issued 1 May 1985, that the former collects on behalf of the Department of Labor and
Employment, and the fees it was authorized to collect under Section 2(6) of Executive Order No. 15 issued
16 May 2001, are subject to the audit jurisdiction of the COA.
No costs.
SO ORDERED.

270
 EN BANC
G.R. No. 211362 February 24, 2015
FIRST CLASS CADET ALDRIN JEFF P. CUDIA of the Philippine Military Academy, represented
by his father RENATO P. CUDIA, who also acts on his own behalf, and BERTENI CATALUNA
CAUSING, Petitioners,
vs.
THE SUPERINTENDENT OF THE PHILIPPINE MILITARY ACADEMY (PMA), THE HONOR
COMMITTEE (HC) OF 2014 OF THE PMA and HC MEMBERS, and the CADET REVIEW AND
APPEALS BOARD (CRAB),Respondents.
x-----------------------x
FILIPINA P. CUDIA, in behalf of CADET FIRST CLASS ALDRIN JEFF P. CUDIA, and on her own
behalf,Petitioner-Intervenor.
DECISION
PERALTA, J.:
The true test of a cadet's character as a leader rests on his personal commitment to uphold what is morally
and ethically righteous at the most critical and trying times, and at the most challenging circumstances.
When a cadet must face a dilemma between what is true and right as against his security, well-being,
pleasures and comfort, or dignity, what is at stake is his honor and those that [define] his values. A man of
an honorable character does not think twice and chooses the fore. This is the essence of and. the Spirit of the
Honor Code - it is championing truth and righteousness even if it may mean the surrender of one's basic
rights and privileges.1
The Procedural Antecedents
Six days prior to the March 16, 2014 graduation ceremonies of the Philippine Military Academy (PMA),
petitioners Renato P. Cudia, acting for himself and in behalf of his son, Cadet First Class Aldrin Jeff P.
Cudia (Cadet JCL Cudia), and Berteni Catalufta Causing filed this petition for certiorari, prohibition, and
mandamus with application for extremely urgent temporary restraining order (TRO). 2
In a Resolution dated March 1 7, 2014, the Court denied the prayer for TRO and instead, required
respondents to file their comment on the petition.3
On March 25, 2014, Filipina P. Cudia, acting for herself and in behalf of her son Cadet 1 CL Cudia, filed a
motion for leave to intervene, attaching thereto the petition-in-intervention.4 Per Resolution dated March 31,
2014, the Court granted the motion and resolved to await respondents' comment on the petition. 5
A manifestation was then filed by petitioners on April 3, 2014, recommending the admission of the petition-
in-intervention and adopting it as an integral part of their petition. 6 On May 20, 2014, petitioner-intervenor
filed a manifestation with motion for leave to admit the Final Investigation Report of the Commission on
Human Rights (CHR) dated April 25, 2014.7 The Report8 was relative to CHR-CAR Case No. 2014-0029
271
filed by the spouses Renato and Filipina Cudia (Spouses Cudia), for themselves and in behalf of their son,
against the PMA Honor Committee (HC) members and Major Vladimir P. Gracilla (Maj. Gracilla)9 for
violation of Cadet lCL Cudia's rights to due process, education, and privacy of communication.
Subsequently, on June 3, 2014, petitioners filed a motion for leave to adopt the submission of the CHR
Report.10 The manifestation was granted and the motion was noted by the Court in its Resolution dated July
7, 2014.
After filing three motions for extension of time,11 respondents filed their Consolidated Comment12 on June
19, 2014. In a motion, petitioner-intervenor filed a Reply, which was later adopted by
petitioners.13 Submitted as Annex "A" of the Reply was a copy of the CHR Resolution dated May 22, 2014
regarding CHR-CAR Case No. 2014-0029.14 We noted and granted the same on August 11, 2014 and
October 13, 2014.
Petitioner-intervenor twice filed a manifestation with motion to submit the case for early resolution, 15 which
the Court noted in a Resolution dated August 11, 2014 and October 3, 2014. 16
The Facts
Cadet 1 CL Cudia was a member of Siklab Diwa Class of 2014 of the PMA, the country's premiere military
academy located at Fort Gregorio del Pilar in Baguio City. He belonged to the "A" Company and was the
Deputy Baron of his class. As claimed by petitioners and petitioner-intervenor (hereinafter collectively
called "petitioners," unless otherwise indicated), he was supposed to graduate with honors as the class
salutatorian, receive the Philippine Navy Saber as the top Navy cadet graduate, and be commissioned as an
ensign of the Philippine Navy.
On November 14, 2013, the combined classes of the Navy and Air Force 1 CL cadets had a lesson
examination (LE) on Operations Research (OR432) under Dr. Maria Monica C. Costales (Dr. Costales) at
the PMAFI Room. Per published schedule from the Headquarters Academic Group, the 4th period class in
OR432 was from 1 :30-3:00 p.m. (1330H-1500H), while the 5th period class in ENG412 was from 3:05-
4:05 p.m. (1505H-1605H).
Five days after, Professor Juanita Berong (Prof. Berong) of the 5th period class issued a Delinquency Report
(DR) against Cadet 1 CL Cudia because he was "[/]ate for two (2) minutes in his Eng 412 class x x x.
"17 Cadets 1 CL Narciso, Arcangel, Miranda, Pontillas, Diaz, Otila, and Dela Cruz were also reported late
for five minutes.18
On December 4, 2013, the DRs reached the Department of Tactical Officers. They were logged and
transmitted to the Company Tactical Officers ( CTO) for explanation of the concerned cadets. Two days
later, Cadet lCL Cudia received his DR.
In his Explanation of Report dated December 8, 2013, Cadet lCL Cudia reasoned out that: "I came directly
from OR432 Class. We were dismissed a bit late by our instructor Sir." 19
On December 19, 2013, Major Rommel Dennis Hindang (Maj. Hindang), the CTO of Cadet 1 CL Cudia,
meted out to him the penalty of 11 demerits and 13 touring hours. Immediately, Cadet lCL Cudia clarified
with Maj. Hindang his alleged violation. The latter told him that the basis of the punishment was the result
of his conversation with Dr. Costales, who responded that she never dismissed her class late, and the
protocol to dismiss the class 10-15 minutes earlier than scheduled. When he expressed his intention to
appeal and seek reconsideration of the punishment, he was · advised to put the request in writing. Hence,
that same day, Cadet 1 CL Cudia addressed his Request for Reconsideration of Meted Punishment to Maj.
Benjamin L. Leander, Senior Tactical Officer (STO), asserting:
answered our question. She then told me that she will give the copy of our section grade, so I waited at the
hallway outside the ACAD5 office, and then she came out of the room and gave me a copy of the grades.
Cadet Arcangel, Cadet Narciso and I immediately went to our 5ti period class which is ENG412.
With these statements, I would like to clarify the following:

I strongly believe that I am not in control of the circumstances, our 4th period class ended 1500H and our 1. How could this be lying?
5th period class, which is ENG412, started 1500H also. Immediately after 4t period class, I went to my next
class without any intention of being late Sir.20
2. What is wrong with the side of Maj. Hindang (why did he come up to that honor report)?
A day after, Maj. Leander instructed Maj. Hindang to give his comments on the request of Cadet 1 CL
3. What are his assumptions?
Cudia and to indicate if there were other cadets belonging to the same section who were also late.

On December 28, 2013, Maj. Hindang submitted his reply to Maj. Leander pointing out that, based on his
investigation, the 4th period class was not dismissed late. As a result, Maj. Leander sustained the penalty
imposed. Petitioners alleged that Cadet 1 CL Cudia came to know of the denial of his request only on
January 24, 2014 upon inquiry with Maj. Leander.
Several days passed, and on January 7, 2014, Cadet lCL Cudia was informed that Maj. Hindang reported
him to the HC21 for violation of the Honor Code. The Honor Report stated:
I appeal, in the name of clarity, fairness and truth[,] that my case be reopened and carefully reviewed for I
did not violate the honor code/system, I can answer NO to both questions (Did I intend to deceive? Did I
intend to take undue advantage?) and for the following reasons:
1. The honor report of Maj. Hindang was already settled and finalized given the fact that no face-
to-face personal conversation with Ms. Costales was conducted to clarify what and when exactly
was the issue at hand.

2. Statements of the respondents support my explanation.

Lying that is giving statement that perverts the truth in his written appeal, stating that his 4th period class
ended at l 500H that made him late in the succeeding class.22
Upon asking the HC Chairman, Cadet 1 CL Mike Anthony P. Mogol (Cadet 1 CL Mogol), as to what Maj.
Hindang meant in his Report, Cadet lCL Cudia learned that it was based on Maj. Hindang's conversations
with their instructors and classmates as well as his statement in the request for reconsideration to Maj.
Leander. He then verbally applied for and was granted an extension of time to answer the charge against him
because Dr. Costales, who could shed light on the matter, was on emergency leave.
On January 13, 2014, Dr. Costales sent text messages to Cadet lCL Cudia, conveying:
3. My explanation to my appeal to my DR (Request for reconsideration of meted punishment)
further supports my explanation in my delinquency report.
4. My understanding of the duration of the "CLASS" covers not just a lecture in a typical
classroom instruction but includes every transaction and communication a teacher does with her
students, especially that in our case some cadets asked for queries, and I am given instruction by
which (sic) were directly related to our CLASS. Her transaction and communication with our other
classmates may have already ended but ours extended for a little bit.

Gud pm cdt cudia. Mam belandres gave me bkground na. She told me its a report dated november. When I agree and consider that because Cadet CUDIA is under my instruction to wait, and the other
cadets still have business with me, it is reasonable enough for him to say that "Our class was
maj hindang ask me, no time referens. (04:25:11 P.M.)
dismissed a bit late" (dealing with matter of seconds or a minute particularly 45 seconds to 1
minute and 30 seconds)
All the while I thot he was refering to dismisal during last day last december. Whc i told, i wud presume
they wil finish early bee its grp work. (04:29:21 P.M.)23
And with concern to (sic) OR432 class, I can say it ended on time (1500H).
The next day, Cadets lCL Cudia and Arcangel approached Dr. Costales, who reaffirmed that she and Maj.
(signed)
Hindang were not in the same time reference when the latter asked her.
M COSTALES
Later, Cadet 1 CL Cudia submitted his letter of explanation on the Honor Report. He averred:
w/ attached certification
Sir, We had an LE that day (14 November 2013) in OR432 class. When the first bell rang (1455), I stood up,
5. I was transparent and honest in explaining the 2-minute delay and did not attempt to conceal
reviewed my paper and submitted it to my instructor, Ms. Costales. After which, I and Cadet lcl Arcangel
anything that happened or I did.
asked for some query with regards (sic) to the deductions of our previous LE. Our instructor gladly

272
 6. Furthermore, CPT DULA WAN PA, the Tactical Officer of Hawk Company[,] and I had a
conversation with regards (sic) to the same matter for which he can give important points of my
case.
7. Cadet lcl DIAZ "D" Co can also stand as a witness that I waited for Ms. Costales. 24
On January 15, 2014, the HC constituted a team to conduct a preliminary investigation on the reported honor
violation of Cadet 1 CL Cudia. The Foxtrot Company was designated as the investigating team and was
composed of Cadet 1 CL Hasigan as Presiding Officer, and Cadets 1 CL Mogol, lCL Raguindin, 2CL
Gumilab, 2CL Saldua, 3CL Espejo, and 3CL Poncardas as members. 25 Soon after, the team submitted its
Preliminary Investigation Report recommending that the case be formalized.
The formal investigation against Cadet 1 CL Cu di a then ensued. The Presiding Officer was Cadet 1 CL
Rhona K. Salvacion, while the nine (9) voting members were Cadets lCL Jairus 0. Fantin, lCL Bryan Sonny
S. Arlegui, 1 CL Kim Adrian R. Martal, 1 CL J eanelyn P. Cabrido, 1 CL ShuAydan G. Ayada, 1 CL Dalton
John G. Lagura, 2CL Renato A. Carifio, Jr., 2CL Arwi C. Martinez, and 2CL Niko Angelo C.
Tarayao.26 Acting as recorders tasked to document the entire proceedings were 4CL Jennifer A. Cuarteron
and 3CL Leoncio Nico A. de Jesus 11.27 Those who observed the trial were Cadets 1 CL Balmeo, Dag-
uman, Hasigan, Raguindin, Paulino, Arcangel, and Narciso; Cadets 2CL Jocson and Saldua, Jr.; and Cadet
3CL Umaguing.28
The first formal hearing started late evening of January 20, 2014 and lasted until early morning the next day.
Cadet lCL Cudia was informed of the charge against him, as to which he pleaded "Not Guilty." Among
those who testified were Cadet 1 CL Cudia, Maj. Hindang, and Cadets 1 CL Arcangel and Narciso. On the
second night of the hearing held on January 21, 2014, Cadet 1 CL Cudia again appeared and was called to
the witness stand along with Cadets Brit and Barrawed. Dr. Costales also testified under oath via phone on a
loudspeaker. Deliberation among the HC voting members followed. After that, the ballot sheets were
distributed. The members cast their votes through secret balloting and submitted their accomplished ballot
sheets together with their written justification. The result was 8-1 in favor of a guilty verdict. Cadet lCL
Dalton John G. Lagura (Cadet lCL Lagura) was the lone dissenter. Allegedly, upon the order ofHC
Chairman Cadet 1 CL Mogol, the Presiding Officer and voting members went inside a chamber adjoining
the court room for further deliberation. After several minutes, they went out and the Presiding Officer
announced the 9-0 guilty verdict. Cadet 1 CL Cudia, who already served nine (9) touring hours, was then
informed of the unanimous votes finding him guilty of violating the Honor Code. He was immediately
placed in the PMA Holding Center until the resolution of his appeal.
On January 24, 2014, Cadet ICL Cudia filed a written appeal addressed to the HC Chairman, the full text of
which stated:
WRITTEN APPEAL
14 NOVEMBER 2013
This is when I was reported for "Late for two (2) minutes in Eng412 class", my explanation on this
delinquency report when I received it, is that "Our class was dismissed a (little) bit late and I came directly
from 4th period class ... etc". Knowing the fact that in my delinquency report, it is stated that ENG412
classes started 1500H and I am late for two minutes, it is logical enough for I (sic) to interpret it as "I came
273
1502H during that class". This is the explanation that came into my mind that time. (I just cannot recall the
exact words I used in explaining that delinquency report, but what I want to say is that I have no intention to
be late). In my statements, I convey my message as "since I was not the only one left in that class, and the
instructor is with us, I used the term "CLASS", I used the word "DISMISSED" because I was under
instruction (to wait for her to give the section grade) by the instructor, Ms. Costales. The other cadets (lCL
MIRANDA, lCL ARCANGEL) still have queries and business with her that made me decide to use the
word "CLASS", while the others who don't have queries and business with her (ex: lCL NARCISO and 1
CL DIAZ) were also around.
Note:
The four named cadets were also reported late.
Reference: Para 171. 0. (Leaving the Classroom Prior to Dismissal Time)(Sec XVII, CCAFPR s2008)
It is stated in this reference that "Cadets shall not linger in the place of instruction after the section has been
dismissed. EXCEPT when told or allowed to do so by the instructor or by any competent authority for
official purposes. "
The instruction by Ms. Costales was given to me before the two bells rang (indicating the end of class hour,
1500H). I waited for her for about 45 seconds to 1 minute and 30 seconds, that made me to decide to write
"a little bit late" in my explanation. Truly, the class ENDED 1500H but due to official purpose (instruction
by Ms. Costales to wait) and the conflict in academic schedule (to which I am not in control of the
circumstances, 4th PD class 1330H-1500H and 5th PD class 1500H-1 600H), and since Ms. Costales, my
other classmates, and I were there, I used the word "CLASS".
19 December 2013
I was informed that my delinquency report was awarded, 11 Demerits and 13 Touring hours. Not because I
don't want to serve punishment, but because I know I did nothing wrong, I obeyed instruction, and believing
that my reason is justifiable and valid, that is why I approached our tactical officer, MAJ HINDANG PAF,
to clarify and ask why it was awarded that day.
In our conversation, he said that he had a phone call to my instructor and he even added that they have a
protocol to dismiss the class, 15 minutes or 10 minutes before 1500H. I explained:
Sir, I strongly believe that I am not in control of the circumstances, our 4th period class ended 1500H and
our 5th period class, which is ENG412, started 1500H also. Immediately after 4th period class, I went to my
next class without any intention of being late Sir.
These statements are supplementary to my explanation in my delinquency report, in here, I specified the
conflict in the schedule and again, I have no intention to be late. After explaining it further with these
statements, my tactical officer said that since I was reported in a written form, I should make an appeal in a
written form. Thinking that he already understood what I want to say, I immediately made an appeal that
day stating the words that I used in having conversation with him. 29
Attached to the written appeal was a Certification dated January 24, 2014, wherein Dr. Costales attested:
1. That Cadet MIRANDA, ARCANGEL, [and] NARCISO was (sic) with Cadet CUDIA in making
query about their latest grades in OR432 and/or results of UEl outside the ACADS office. The
following facts may explain their queries on 14 November 2013:
a. That I held my class in the PMAFI room instead of room 104.
b. That OR432 releases grades every Wednesday and cadets are informed during
Thursday, either in class or posted grades in the bulletin board (grades released was [sic J
based on the previous LEs: latest LE before UE was Decision Trees).
c. That UE papers were already checked but not yet recorded due to (sic) other cadets
have not taken the UE. Cadets were allowed to verify scores but not to look at the papers.
d. Last 23 January 2014, Captain Dulawan clarified if indeed Cadet NARCISO and
ARCANGEL verified grades. The two cadets said that they verified something with me
after the OR432 class and they were with Cadet CUD IA. That the statements of the three
(3) cadets are all the same and consistent, thus[,] I honor that as true.
2. As to the aspect of dismissing late, I could not really account for the specific time that I
dismissed the class. To this date, I [cannot] really recall an account that is more than two (2)
months earlier. According to my records, there was a lecture followed by an LE during (sic) on 14
November 2013. To determine the time of my dismissal, maybe it can be verified with the other
members of class I was handling on that said date. 30
Respondents contend that the HC denied the appeal the same day, January · 24, as it found no reason to
conduct a re-trial based on the arguments and evidence presented. 31 Petitioners, however, claim that the
written appeal was not acted upon until the filing of the petition-in-intervention.32
From January 25 to February 7, 2014, respondents allege that the Headquarters Tactics Group (HTG)
conducted an informal review to check the findings of the HC. During the course of the investigation, Prof.
Berong was said to have confirmed with the Officer-in-Charge of the HC that classes started as scheduled
(i.e., 3:05 p.m. or 1505H), and that Cadet lCL Barrawed, the acting class marcher of ENG412, verified
before the Commandant, Assistant Commandant, and STO that the class started not earlier than scheduled.
Meantime, on February 4, 2014, the OIC of the HC forwarded the Formal Investigation Report to the Staff
Judge Advocate (SJA) for review. The next day, the SJA found the report to be legally in order.
On February 8, 2014, Colonel Rozzano D. Briguez (Col. Briguez), the Commandant of Cadets, affirmed the
HC findings and recommended to Vice Admiral Edgar Abogado, then PMA Superintendent, the separation
from the PMA of Cadet lCL Cudia for violation of the First Tenet of the Honor Code (Lying, pursuant to
Sec. VII.12.b of the CCAFPR S-2008). On the same date, Special Orders No. 26 was issued by the PMA
Headquarters placing Cadet 1 CL Cudia on indefinite leave of absence without pay and allowances effective
February 10, 2014 pending approval of his separation by the AFPGHQ, barring him from future
274
appointment and/or admission as cadet, and not permitting him to qualify for any entrance requirements to
the PMA. 33
Two days later, Vice Admiral Abogado approved the recommendation to dismiss Cadet 1 CL Cudia.
On February 13, 2014, Cadet lCL Cudia submitted a letter to the Office of the Commandant of Cadets
requesting for reinstatement by the PMA of his status as a cadet. 34
Four days passed, Annavee P. Cudia (Annavee ), the sister of Cadet 1 CL Cudia, posted his plight in her
Face book account. The day after, the Spouses Cudia gave a letter to Major General Oscar Lopez (Maj. Gen.
Lopez), the new PMA Superintendent, asking to recognize the 8-1 voting of the HC.35 Copies of which were
furnished to the AFP Chief of Staff and other concerned military officials. Subsequently, Maj. Gen. Lopez
was directed to review Cadet lCL Cudia's case. The latter, in turn, referred the matter to the Cadet Review
and Appeals Board (CRAB).
On February 19, 2014, Cadet lCL Cudia made his personal appeal letter to Maj. Gen. Lopez. On even date,
the AFP Chief of Staff ordered a reinvestigation following the viral Facebook post of Annavee demanding
the intervention of the military leadership.
Petitioners claim that, on February 21, 2014, Special Order No. 1 was issued directing all PMA cadets to
ostracize Cadet 1 CL Cudia by not talking to him and by separating him from all activities/functions of the
cadets. It is said that any violation shall be a "Class 1" offense entailing 45 demerits, 90 hours touring, and
90 hours confinement. Cadet 1 CL Cudia was not given a copy of the order and learned about it only from
the media.36 According to an alleged news report, PMA Spokesperson Major Agnes Lynette Flores (Maj.
Flores) confirmed the HC order to ostracize Cadet 1 CL Cudia. Among his offenses were: breach of
confidentiality by putting documents in the social media, violation of the PMA Honor Code, lack of
initiative to resign, and smearing the name of the PMA.37
On February 24, 2014, Cadet 1CL Cudia requested the CRAB for additional time, until March 4, 2014, to
file an appeal on the ground that his intended witnesses are in on-the-job training ( OJT).38 As additional
evidence to support his appeal, he also requested for copies of the Minutes of the HC proceedings, relevant
documents pertaining to the case, and video footages and recordings of the HC hearings.
The next day, Cadet 1 CL Cudia and his family engaged the services of the Public Attorney's Office (PAO)
in Baguio City.
The CRAB conducted a review of the case based on the following: (a) letter of appeal of the Spouses Cudia
dated February 18, 2014; (b) directive from the AFP-GHQ to reinvestigate the case; and ( c) guidance from
Maj. Gen. Lopez.
On February 26, 2014, Brigadier General Andre M. Costales, Jr. (Brig. Gen. Costales, Jr.), the CRAB
Chairman, informed Cadet lCL Cudia that, pending approval of the latter's request for extension, the CRAB
would continue to review the case and submit its recommendations based on whatever evidence and
testimonies received, and that it could not favorably consider his request for copies of the HC minutes,
relevant documents, and video footages and recordings of the HC hearings since it was neither the
appropriate nor the authorized body to take action thereon. 39Subsequently, upon verbal advice, Cadet 1 CL
Cudia wrote a letter to Maj. Gen. Lopez reiterating his request.40
Two days after, the Spouses Cudia filed a letter-complaint before the CHR-Cordillera Administrative
Region (CAR) Office against the HC members and Maj. Gracilla for alleged violation of the human rights of
Cadet lCL Cudia, particularly his rights to due process, education, and privacy of communication. 41
On March 4, 2014, Cadet 1 CL Cudia, through the PAO, moved for additional time, until March 19, 2014, to
file his appeal and submit evidence. PAO also wrote a letter to AFP Chief of Staff General Emmanuel T.
Bautista (Gen. Bautista) seeking for immediate directive to the PMA to expeditiously and favorably act on
Cadet 1CL Cudia's requests.42
Exactly a week prior to the commencement exercises of Siklab Diwa Class, the following events transpired:
On March 10, 2014, Annavee sought the assistance of PAO Chief Public Attorney Persida V. Rueda-
Acosta.43 On the other hand, the CRAB submitted a report to the AFP-GHQ upholding the dismissal of
Cadet 1 CL Cudia.44
On March 11, 2014, PAO received a letter from Maj. Gen. Lopez stating the denial of Cadet 1CL Cudia's
requests for extension of time to file an Appeal Memorandum in view of the ample time already given, and
to be furnished with a copy of relevant documents because of confidentiality and presumption of regularity
of the HC proceedings.45Cadet 1CL Cudia, through PAO, then filed an Appeal Memorandum46 before the
CRAB.
On March 12, 2014, Spouses Cudia wrote a letter to President Benigno Simeon C. Aquino III (Pres.
Aquino), who is the Commander-in-Chief of the AFP, attaching thereto the Appeal Memorandum. 47 On the
same day, Special Orders No. 48 was issued by the PMA constituting a Fact-Finding Board/Investigation
Body composed of the CRAB members and PMA senior officers to conduct a deliberate investigation
pertaining to Cadet 1CL Cudia's Appeal Memorandum. 48 The focus of the inquiry was not just to find out
whether the appeal has merit or may be considered but also to investigate possible involvement of other
cadets and members of the command related to the incident and to establish specific violation of policy or
regulations that had been violated by other cadets and members of the HC. 49
On March 13, 2014, the Cudia family and the Chief Public Attorney had a dialogue with Maj. Gen. Lopez.
On March 14, 2014, the CHR-CAR came out with its preliminary findings, which recommended the
following:
a. For the PMA and the Honor Committee to respect and uphold the 8 Guilty - 1 Not guilty vote;
b. For the PMA and the Honor Committee to officially pronounce Cdt Cudia as Not Guilty of the
charge filed against him before the Honor Committee;
c. For the PMA to restore Cadet Cudia's rights and entitlements as a full-fledge graduating cadet
and allow him to graduate on Sunday, 16 March 2014;
d. For the PMA to fully cooperate with the CHR in the investigation of Cudia's Case. 50
275
On March 15, 2014, Cadet 1CL Cudia and his family had a meeting with Pres. Aquino and Department of
National Defense (DND) Secretary Voltaire T. Gazmin. The President recommended that they put in writing
their appeal, requests, and other concerns. According to respondents, the parties agreed that Cadet 1 CL
Cudia would not join the graduation but it was without prejudice to the result of the appeal, which was
elevated to the AFP Chief of Staff. The President then tasked Gen. Bautista to handle the reinvestigation of
the case, with Maj. Gen. Oscar Lopez supervising the group conducting the review.
Four days after Siklab Diwa Class' graduation day, petitioner Renato S. Cudia received a letter dated March
11, 2014 from the Office of the AFP Adjutant General and signed by Brig. Gen. Ronald N. Albano for the
AFP Chief of Staff, affirming the CRAB' s denial of Cadet 1 CL Cudia' s appeal. It held:
After review, The Judge Advocate General, APP finds that the action of the PMA CRAB in denying the
appeal for reinvestigation is legally in order. There was enough evidence to sustain the finding of guilt and
the proprietary (sic) of the punishment imposed. Also, your son was afforded sufficient time to file his
appeal from the date he was informed of the final verdict on January 21, 2014, when the decision of the
Honor Committee was read to him in person, until the time the PMA CRAB conducted its review on the
case. Moreover, the continued stay of your son at the Academy was voluntary. As such, he remained subject
to the Academy's policy regarding visitation. Further, there was no violation of his right to due process
considering that the procedure undertaken by the Honor Committee and PMA CRAB was consistent with
existing policy. Thus, the previous finding and recommendation of the Honor Committee finding your son,
subject Cadet guilty of "Lying" and recommending his separation from the Academy is sustained.
In view of the foregoing, this Headquarters resolved to deny your appeal for lack of merit. 51 Thereafter, the
Fact-Finding Board/Investigating Body issued its Final Investigation Report on March 23, 2014 denying
Cadet 1 CL Cudia's appeal.52 Subsequently, on April 28, 2014, the special investigation board tasked to
probe the case submitted its final report to the President. 53 Pursuant to the administrative appeals process,
the DND issued a Memorandum dated May 23, 2014, directing the Office of AFP Chief of Staff to submit
the complete records of the case for purposes of DND review and recommendation for disposition by the
President.54
Meanwhile, on May 22, 2014, the CHR-CAR issued its Resolution with respect to CHR-CAR Case No.
2014-0029, concluding and recommending as follows:
WHEREFORE, PREMISES CONSIDERED, the Commission on Human Rights-CAR Office finds
PROBABLE CAUSE FOR HUMAN RIGHTS VIOLATIONS against the officers and members of the
PMA Honor Committee and .. certain PMA officials, specifically for violations of the rights of CADET
ALDRIN JEFF P. CUDIA to dignity, due process, education, privacy/privacy of communication, and good
life.
IN VIEW OF THE FOREGOING, the CHR-CAR Office RESOLVED to indorse to competent authorities
for their immediate appropriate action on the following recommendations:
1. The Philippine Military Academy must set aside the "9-Guilty, 0-Not Guilty" verdict against
Cadet Aldrin Jeff P. Cudia, for being null and void; to uphold and respect the "8-Guilty, 1-Not
Guilty" voting result and make an official pronouncement of NOT GUILTY in favor of Cadet
Cudia;
2. The PMA, the AFP Chief of Staff, and the President in whose hands rest the ends of justice and
fate of Cadet Cudia, to:
2.1 officially proclaim Cadet Cudia a graduate and alumnus of the Philippine Military
Academy;
2.2 issue to Cadet Cudia the corresponding Diploma for the degree of Bachelors of
Science; and
2.3 Issue to Cadet Cudia the corresponding official transcript 'of his academic records for
his BS degree, without conditions therein as to his status as a PMA cadet.
3. The Public Attorneys' Office to provide legal services to Cadet Cudia in pursuing administrative,
criminal and civil suits against the officers and members of the Honor Committee named
hereunder, for violation of the Honor Code and System and the Procedure in Formal Investigation,
dishonesty, violation of the secrecy of the ballot, tampering the true result of the voting, perjury,
intentional omission in the Minutes of substantive part of the formal trial proceedings which are
prejudicial to the interest of justice and Cadet Cudia's fundamental rights to dignity, non-
discrimination and due process, which led to the infringement of his right to education and even
transgressing his right to a good life.
3.1 Cdt lCL MIKE ANTHONY MOGUL, now 2nd Lt. of the AFP
3.2 Cdt lCL RHONA K. SALVACION, now 2nd Lt. of the AFP
3.3 Cdt 2CL ARWI C. MARTINEZ
3.4 Cdt 2CL RENATO A. CARINO, JR.
3.5 Cdt 2CL NIKOANGELOC. TARAYAO
3.6 Cdt lCL JEANEL YN P. CABRIDO, now 2nd Lt. of the AFP
3.7 Cdt lCL KIM ADRIAN R. MARTAL, now 2nd Lt. of the AFP
3.8 Cdt lCL JAIRUS 0. FANTIN, now 2nd Lt. of the AFP
3.9 Cdt lCL BRYAN SONNY S. ARLEGUI, now 2nd Lt. of the AFP
3.10 Cdt lCL DALTON JOHN G. LAGURA, now 2nd Lt. of the AFP
3.11 Cdt 1 CL BIANCHIHEIMER L. EDRA, now 2nd Lt. of the AFP
3.12 Cdt 4CL JENNIFER A. CUARTERON (recorder)
276
3.13 Cdt 3CL LEONCIO NICO A. DE JESUS II (record)
4. The Office of the AFP Chief of Staff and the PMA competent authorities should investigate and
file appropriate charges against Maj. VLADIMIR P. GRACILLA, for violation of the right to
privacy of Cadet Cudia and/or failure, as intelligence officer, to ensure the protection of the right to
privacy of Cudia who was then billeted at the PMA Holding Center;
5. The Office of the AFP Chief of Staff and PMA competent authorities should investigate Maj.
DENNIS ROMMEL HINDANG for his failure and ineptness to exercise his responsibility as a
competent Tactical Officer and a good father of his cadets, in this case, to Cadet Cudia; for failure
to respect exhaustion of administrative remedies;
6. The Secretary of National Defense, the Chief of Staff of the Armed Forces of the Philppines, the
PMA Superintendent, to immediately cause the comprehensive review of all rules of procedures,
regulations, policies, including the so-called practices in the implementation of the Honor Code;
and, thereafter, adopt new policies, rules of procedures and relevant regulations which are human-
rights based and consistent with the Constitution and other applicable laws;
7. The Congress of the Philippines to consider the enactment of a law defining and penalizing
ostracism and discrimination, which is apparently being practiced in the PMA, as a criminal
offense in this jurisdiction;
8. His Excellency The President of the Philippines to certify as priority, the passage of an anti-
ostracism and/or anti-discrimination law; and
9. Finally, for the AFP Chief of Staff and the PMA authorities to ensure respect and protection of
the rights of those who testified for the cause of justice and truth as well as human rights of Cadet
Cudia.
RESOLVED FURTHER, to monitor the actions by the competent authorities on the foregoing CHR
recommendations.
Let copy of this resolution be served by personal service or by substituted service to the complainants (the
spouses Renato and Filipina Cudia; and Aldrin Jeff P. Cudia), and all the respondents. Also, to the PMA
Superintendent, the AFP Chief of Staff, the Secretary of National Defense, His Excellency The President of
the Philippines, The Public Attorneys' Office.
SO RESOLVED.55
On June 11, 2014, the Office of the President sustained the findings of the AFP Chief of Staff and the
CRAB. The letter, which was addressed to the Spouses Cudia and signed by Executive Secretary Paquito N.
Ochoa, Jr., stated in whole:
This refers to your letters to the President dated 12 March 2014 and 26 March 2014 appealing for a
reconsideration of the decision of the Philippine Military Academy (PMA) Honor Committee on the case of
your son, Cadet 1 CL Aldrin Jeff Cudia.
After carefully studying the records of the case of Cadet Cudia, the decision of the Chief of Staff of the
Armed Forces of the Philippines (AFP), and the Honor Code System of the AFP Cadet Corps, this Office
has found no substantial basis to disturb the findings of the AFP and the PMA Cadet Review Appeals Board
(CRAB). There is no competent evidence to support the claim that the decision of the Honor Committee
members was initially at 8 "Guilty" votes and 1 "Not Guilty" vote. The lone affidavit of an officer, based on
his purported conversation with one Honor Committee member, lacks personal knowledge on the
deliberations of the said Committee and is hearsay at best.
Similarly, the initial recommendations of the Commission on Human Rights cannot be adopted as basis that
Cadet Cudia's due process rights were violated. Apart from being explicitly preliminary in nature, such
recommendations are anchored on a finding that there was an 8-1 vote which, as discussed above, is not
supported by competent evidence.
In the evaluation of Cadet Cudia's case, this Office has been guided by the precept that military law is
regarded to be in a class of its own, "applicable only to military personnel because the military constitutes an
armed organization requiring a system of discipline separate from that of civilians" (Gonzales v. Abaya,
G.R. No. 164007, 10 August 2005 citing Calley v. Callaway, 519 F. 2d 184 [1975] and Orloff v.
Willoughby, 345 US 83 [1953]). Thus, this Office regarded the findings of the AFP Chief, particularly his
conclusion that there was nothing irregular in the proceedings that ensued, as carrying great weight.
Accordingly, please be informed that the President has sustained the findings of the AFP Chief and the PMA
CRAB.56
The Issues
To petitioners, the issues for resolution are:
I.
WHETHER THE PHILIPPINE MILITARY ACADEMY, THE HONOR COMMITTEE AND THE
CADET REVIEW AND APPEALS BOARD COMMITTED GRAVE ABUSE OF DISCRETION IN
DISMISSING CADET FIRST CLASS ALDRIN JEFF P. CUDIA FROM THE ACADEMY IN UTTER
DISREGARD OF HIS RIGHT TO DUE PROCESS CONSIDERING THAT:
A. Despite repeated requests for relevant documents regarding his case, Cadet First Class Aldrin
Jeff Cudia was deprived of his right to have access to evidence which would have proven his
defense, would have totally belied the charge against him, and more importantly, would have
shown the irregularity in the Honor Committee's hearing and rendition of decision
B. Cadet First Class Aldrin Jeff Cudia was vaguely informed of the decisions arrived at by the
Honor Committee, the Cadet Review and Appeals Board and the Philippine Military Academy
C. The Honor Committee, the Cadet Review and Appeals Board and the Philippine Military
Academy have afforded Cadet First Class Aldrin Jeff Cudia nothing but a sham trial
277
D. The Honor Committee, the Cadet Review and Appeals Board and the Philippine Military
Academy violated their own rules and principles as embodied in the Honor Code
E. The Honor Committee, the Cadet Review and Appeals Board and the Philippine Military
Academy, in deciding Cadet First Class Aldrin Jeff Cudia's case, grossly and in bad faith,
misapplied the Honor Code so as to defy the 1987 Constitution, notwithstanding the
unquestionable fact that the former should yield to the latter.
II
WHETHER THE PHILIPPINE MILITARY ACADEMY, THE HONOR COMMITTEE AND THE
CADET REVIEW AND APPEALS BOARD COMMITTED GRAVE ABUSE OF DISCRETION IN
HOLDING THAT CADET FIRST CLASS ALDRIN JEFF P. CUDIA LIED, THEREBY VIOLATING
THE HONOR CODE
III
WHETHER THE RESULT OF THE FACT-FINDING INVESTIGATION INDEPENDENTLY
CONDUCTED BY THE COMMISSION ON HUMAN RIGHTS IS OF SUCH GREAT WEIGHT AND
PERSUASIVE NATURE THAT THIS HONORABLE COURT MAY HONOR, UPHOLD AND
RESPECT57
On the other hand, in support of their prayer to dismiss the petition, respondents presented the issues below:
PROCEDURAL GROUNDS
I.
THE MANDAMUS PETITION PRAYING THAT CADET CUDIA BE INCLUDED IN THE LIST OF
GRADUATES OF SIKLAB DIWA CLASS OF 2014 AND BE ALLOWED TO TAKE PART IN THE
COMMENCEMENT EXERCISES HAS ALREADY BEEN RENDERED MOOT.
II.
THE ISSUES RAISED IN THE PETITIONS ARE ACTUALLY FACTUAL WHICH ARE BEYOND THE
SCOPE OF A PETITION FOR CERTIORARI, PROHIBITION AND MANDAMUS.
III.
MANDAMUS DOES NOT LIE TO COMPEL RESPONDENTS TO GRANT THE RELIEFS PRAYED
FOR. IV. IT IS PREMATURE TO INVOKE JUDICIAL REDRESS PENDING THE DECISION OF THE
PRESIDENT ON CADET CUDIA'S APPEAL.
V.
WITH UTMOST DUE RESPECT, THE HONORABLE COURT MUST EXERCISE CAREFUL
RESTRAINT AND REFRAIN FROM UNDULY OR PREMATURELY INTERFERING WITH
LEGITIMATE MILITARY MATTERS.
SUBSTANTIVE GROUNDS
VI.
CADET CUDIA HAS NECESSARILY AND VOLUNTARILY RELINQUISHED CERTAIN CIVIL
LIBERTIES BY VIRTUE OF HIS ENTRY INTO THE PMA.
VII.
THE PMA ENJOYS THE ACADEMIC FREEDOM WHICH AUTHORIZES IT TO IMPOSE
DISCIPLINARY MEASURES AND PUNISHMENT AS IT DEEMS FIT AND CONSISTENT WITH
THE PECULIAR NEEDS OF THE ACADEMY.
VIII.
CADET CUDIA WAS PROPERLY AFFORDED PROCEDURAL DUE PROCESS.
The PMA has regulatory authority to administratively terminate cadets despite the absence of statutory
authority.
Violation of the Honor Code warrants the administrative dismissal of a guilty cadet.
Cadet Cudia violated the first tenet of the Honor Code by providing untruthful statements in the explanation
for his tardiness.
The higher authorities of the PMA did not blindly adopt the findings of the Honor Committee.
The procedural safeguards in a student disciplinary case were properly accorded to Cadet Cudia.
The subtle evolution in the voting process of the Honor Committee, by incorporating executive
session/chambering, was adopted to further strengthen the voting procedure of the Honor Committee. Cadet
Lagura voluntarily changed his vote without any pressure from the other voting members of the Honor
Committee.
Ostracism is not a sanctioned practice of the PMA.
The findings of the Commission on Human Rights are not binding on the Honorable Court, and are, at best,
recommendatory.
Cadet Cudia was not effectively deprived of his future when he was dismissed from the PMA. 58
278
The Ruling of the Court
PROCEDURAL GROUNDS
Propriety of a petition for mandamus
Respondents argue that the mandamus aspect of the petition praying that Cadet 1 CL Cudia be included in
the list of graduating cadets and for him to take part in the commencement exercises was already rendered
moot and academic when the graduation ceremonies of the PMA Siklab Diwa Class took place on March
16, 2014. Also, a petition for mandamus is improper since it does not lie to compel the performance of a
discretionary duty. Invoking Garcia v. The Faculty Admission Committee, Loyola School of
Theology,59 respondents assert that a mandamus petition could not be availed of to compel an academic
institution to allow a student to continue studying therein because it is merely a privilege and not a right. In
this case, there is a clear failure on petitioners' part to establish that the PMA has the, ministerial duty to
include Cadet 1 CL Cudia in the list, much less award him with academic honors and commission him to the
Philippine Navy. Similar to the case of University of San Agustin, Inc. v. Court of Appeals,60 it is submitted
that the PMA may rightfully exercise its discretionary power on who may be admitted to study pursuant to
its academic freedom.
In response, petitioners contend that while the plea to allow Cadet 1 CL Cudia to participate in the PMA
2014 commencement exercises could no longer be had, the Court may still grant the other reliefs prayed for.
They add that Garcia enunciated that a respondent can be ordered to act in a particular manner when there is
a violation of a constitutional right, and that the certiorari aspect of the petition must still be considered
because it is within the province of the Court to determine whether a branch of the government or any of its
officials has acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or
excess thereof.
We agree that a petition for mandamus is improper.
Under Section 3, Rule 65 of the Rules of Civil Procedure, a petition for mandamus may be filed when any
tribunal, corporation, board, officer, or person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust, or station. It may also be filed when any
tribunal, corporation, board, officer, or person unlawfully excludes another from the use and enjoyment of a
right or office to which such other is entitled.
For mandamus to lie, the act sought to be enjoined must be a ministerial act or duty. An act is ministerial if
the act should be performed "[under] a given state of facts, in a prescribed manner, in obedience to the
mandate of a legal authority, without regard to or the exercise of [the tribunal or corporation's] own
judgment upon the propriety or impropriety of the act done." The tribunal, corporation, board, officer, or
person must have no choice but to perform the act specifically enjoined by law. This is opposed to a
discretionary act whereby the officer has the choice to decide how or when to perform the duty.61
In this case, petitioners pray for, among others: Also, after due notice and hearing, it is prayed of the Court
to issue a Writ of Mandamus to:
 1. direct the PMA to include Cadet Cudia in the list of graduates of Siklab Diwa Class of 2014 of
the PMA, including inclusion in the yearbook;
2. direct the PMA to allow Cadet Cudia to take part in the commencement exercises if he
completed all the requirements for his baccalaureate degree;
3. direct the PMA to award unto Cadet Cudia the academic honors he deserves, and the
commission as a new Philippine Navy ensign;
4. direct the Honor Committee to submit to the CRAB of the PMA all its records of the
proceedings taken against Cadet Cudia, including the video footage and audio recordings of the
deliberations and voting, for the purpose of allowing the CRAB to conduct intelligent review of the
case of Cadet Cudia;
5. direct the PMA's CRAB to conduct a review de nova of all the records without requiring Cadet
Cudia to submit new evidence if it was physically impossible to do so;
6. direct the PMA's CRAB to take into account the certification signed by Dr. Costales, the new
evidence consisting of the affidavit of a military officer declaring under oath that the cadet who
voted "not guilty" revealed to this officer that this cadet was coerced into changing his vote, and
other new evidence if there is any;
7. direct the PMA's CRAB to give Cadet Cudia the right to a counsel who is allowed to participate
actively in the proceedings as well as in the cross-examinations during the exercise of the right to
confront witnesses against him; and
8. direct the Honor Committee in case of remand of the case by the CRAB to allow Cadet Cudia a
representation of a counsel.62
Similarly, petitioner-intervenor seeks for the following reliefs:
A. xxx
B. a Writ of Mandamus be issued commanding:
a.) The PMA, Honor Committee, and CRAB to respect and uphold the 8 Guilty -1 Not
Guilty vote;
b.) The PMA, Honor Committee, and CRAB to officially pronounce Cadet Cudia as Not
Guilty of the charge filed against him before the Honor Committee;
c.) The PMA to restore Cadet Cudia's rights and entitlements as a full-fledged graduating
cadet, including his diploma and awards.63
279
Anent the plea to direct the PMA to include Cadet 1 CL Cudia in the list of graduates of Siklab Diwa Class
of 2014 and to allow him to take part in the commencement exercises, the same was rendered moot and
academic when the graduation ceremonies pushed through on March 16, 2014 without including Cadet 1 CL
Cudia in the roll of graduates.
With respect to the prayer directing the PMA to restore Cadet 1 CL Cudia's rights and entitlements as a full-
fledged graduating cadet, including his diploma, awards, and commission as a new Philippine Navy ensign,
the same cannot be granted in a petition for mandamus on the basis of academic freedom, which We shall
discuss in more detail below. Suffice it to say at this point that these matters are within the ambit of or
encompassed by the right of academic freedom; therefore, beyond the province of the Court to decide. 64 The
powers to confer degrees at the PMA, grant awards, and commission officers in the military service are
discretionary acts on the part of the President as the AFP Commander-in-Chief. Borrowing the words of
Garcia:
There are standards that must be met. There are policies to be pursued. Discretion appears to be of the
essence. In terms of Hohfeld's terminology, what a student in the position of petitioner possesses is a
privilege rather than a right. She [in this case, Cadet 1 CL Cudia] cannot therefore satisfy the prime and
indispensable requisite of a mandamus proceeding.65
Certainly, mandamus is never issued in doubtful cases. It cannot be availed against an official or
government agency whose duty requires the exercise of discretion or judgment.66 For a writ to issue,
petitioners should have a clear legal right to the thing demanded, and there should be an imperative duty on
the part of respondents to perform the act sought to be mandated. 67
The same reasons can be said as regards the other reliefs being sought by petitioners, which pertain to the
HC and the CRAB proceedings. In the absence of a clear and unmistakable provision of a law, a mandamus
petition does not lie to require anyone to a specific course of conduct or to control or review the exercise of
discretion; it will not issue to compel an official to do anything which is not his duty to do or which is his
duty not to do or give to the applicant anything to which he is not entitled by law. 68
The foregoing notwithstanding, the resolution of the case must proceed since, as argued by petitioners, the
Court is empowered to settle via petition for certiorari whether there is grave abuse of discretion on the part
of respondents in dismissing Cadet 1 CL Cudia from the PMA.
Factual nature of the issues
According to respondents, the petition raises issues that actually require the Court to make findings of fact
because it sets forth several factual disputes which include, among others: the tardiness of Cadet 1 CL Cudia
in , his ENG412 class and his explanation thereto, the circumstances that transpired in the investigation of
his Honor Code violation, the proceedings before the HC, and the allegation that Cadet 1 CL Lagura was
forced to change his vote during the executive session/"chambering."
In opposition, petitioners claim that the instant controversy presents legal issues. Rather than determining
which between the two conflicting versions of the parties is true, the case allegedly centers on the
application, appreciation, and interpretation of a person's rights to due process, to education, and to property;
the interpretation of the PMA Honor Code and Honor System; and the conclusion on whether Cadet 1 CL
Cudia's explanation constitutes lying. Even if the instant case involves questions of fact, petitioners still hold
that the Court is empowered to settle mixed questions of fact and law. Petitioners are correct.
There is a question of law when the issue does not call for an examination of the probative value of evidence
presented, the truth or falsehood of facts being admitted and the doubt concerns the correct application of
law and jurisprudence on the matter. On the other hand, there is a question of fact when the doubt or
controversy arises as to the truth or falsity of the alleged facts. When there is no dispute as to fact, the
question of whether or not the conclusion drawn therefrom is correct is a question of law. 69 The petition
does not exclusively present factual matters for the Court to decide. As pointed out, the all-encompassing
issue of more importance is the determination of whether a PMA cadet has rights to due process, to
education, and to property in the context of the Honor Code and the Honor System, and, if in the affirmative,
the extent or limit thereof. Notably, even respondents themselves raise substantive grounds that We have to
resolve. In support of their contention that the Court must exercise careful restraint and should refrain from
unduly or prematurely interfering in legitimate military matters, they argue that Cadet 1 CL Cudia has
necessarily and voluntarily relinquished certain civil liberties by virtue of his entry into the PMA, and that
the Academy enjoys academic freedom authorizing the imposition of disciplinary measures and punishment
as it deems fit and consistent with the peculiar needs of the PMA. These issues, aside from being purely
legal being purely legal questions, are of first impression; hence, the Court must not hesitate to make a
categorical ruling.
Exhaustion of administrative remedies
Respondents assert that the Court must decline jurisdiction over the petition pending President Aquino’s
resolution of Cadet 1 CL Cudia' appeal. They say that there is an obvious non-exhaustion of the full
administrative process. While Cadet 1 CL Cudia underwent the review procedures of his guilty verdict at the
Academy level - the determination by the SJA of whether the HC acted according to the established
procedures of the Honor System, the assessment by the Commandant of Cadets of the procedural and legal
correctness of the guilty verdict, the evaluation of the PMA Superintendent to warrant the administrative
separation of the guilty cadet, and the appellate review proceedings before the CRAB - he still appealed to
the President, who has the utmost latitude in making decisions affecting the military. It is contended that the
President's power over the persons and actions of the members of the armed forces is recognized in B/Gen.
(Ret.) Gudani v. Lt./Gen. Senga70 and in Section 3171 of Commonwealth Act (CA.) No. 1 (also known as
"The National Defense Act''). As such, the President could still overturn the decision of the PMA. In
respondents' view, the filing of this petition while the case is pending resolution of the President is an
irresponsible defiance, if not a personal affront. For them, comity dictates that courts of justice should shy
away from a dispute until the system of administrative redress has been completed.
In general, no one is entitled to judicial relief for a supposed or threatened injury until the prescribed
administrative remedy has been exhausted. The rationale behind the doctrine of exhaustion of administrative
remedies is that "courts, for reasons of law, comity, and convenience, should not entertain suits unless the
available administrative remedies have first been resorted to and the proper authorities, who are competent
to act upon the matter complained of, have been given the appropriate opportunity to act and correct their
alleged errors, if any, committed in the administrative forum."74 In the U.S. case of Ringgold v. United
States,75 which was cited by respondents, it was specifically held that in a typical case involving a decision
by military authorities, the plaintiff must exhaust his remedies within the military before appealing to the
court, the doctrine being designed both to preserve the balance between military and civilian authorities and
to conserve judicial resources.
Nonetheless, there are exceptions to the rule. In this jurisdiction, a party may directly resort to judicial
remedies if any of the following is present:
1. when there is a violation of due process;
2. when the issue involved is purely a legal question;
3. when the administrative action is patently illegal amounting to lack or excess of jurisdiction;
4. when there is estoppel on the part of the administrative agency concerned;
5. when there is irreparable injury;
6. when the respondent is a department secretary whose acts as an alter ego of the President bear
the implied and assumed approval of the latter;
7. when to require exhaustion of administrative remedies would be unreasonable;
8. when it would amount to a nullification of a claim;
9. when the subject matter is a private land in land case proceedings;
10. when the rule does not provide a plain, speedy and adequate remedy; and

From the unfolding of events, petitioners, however, consider that President Aquino effectively denied the 11. when there are circumstances indicating the urgency of judicial intervention.76
appeal of Cadet 1 CL Cudia. They claim that his family exerted insurmountable efforts to seek
reconsideration of the HC recommendation from the APP officials and the President, but was in vain. The
Petitioners essentially raise the lack of due process in the dismissal of Cadet 1 CL Cudia from the PMA.
circumstances prior to, during, and after the PMA 2014 graduation rites, which was attended by President
Thus, it may be a ground to give due course to the petition despite the non-exhaustion of administrative
Aquino after he talked to Cadet lCL Cudia's family the night before, foreclose the possibility that the
remedies. Yet more significant is the fact that during the pendency of this case, particularly on June 11,
challenged findings would still be overturned. In any case, petitioners insist that the· rule on exhaustion of
2014, the Office of the President finally issued its ruling, which sustained the findings of the AFP Chief and
administrative remedies is not absolute based on the Corsiga v. Defensor 72 and Verceles v. BLR-
the CRAB. Hence, the occurrence of this supervening event bars any objection to the petition based on
DOLE73 rulings.
failure to exhaust administrative remedies.

We rule for petitioners.

Court's interference within military affairs

280
Respondents cite the U.S. cases of Bois v. Marsh77 and Schlesinger v. Councilman78 to support their
contention that judicial intervention would pose substantial threat to military discipline and that there should
be a deferential review of military statutes and regulations since political branches have particular expertise
and competence in assessing military needs. Likewise, in Orloff v. Willoughby79 and Parker v. Levy,80 it
was allegedly opined by the U.S. Supreme Court that the military constitutes a specialized community
governed by a separate discipline from that of the civilian. According to respondents, the U.S. courts' respect
to the military recognizes that constitutional rights may apply differently in the military context than in
civilian society as a whole. Such military deference is exercised either by refusing to apply due process and
equal protection doctrines in military cases or applying them but with leniency.
In respondents' view, although Philippine courts have the power of judicial review in cases attended with
grave abuse of discretion amounting to lack or excess of jurisdiction, policy considerations call for the
widest latitude of deference to military affairs. Such respect is exercised by the court where the issues to be
resolved entail a substantial consideration of legitimate governmental interest. They suppose that allowing
Cadet 1 CL Cudia's case to prosper will set an institutionally dangerous precedent, opening a Pandora's box
of other challenges against the specialized system of discipline of the PMA. They state that with the PMA's
mandate to train cadets for permanent commission in the AFP, its disciplinary rules and procedure
necessarily must impose h different standard of conduct compared with civilian institutions.
Petitioners, on the other hand, consider that this Court is part of the State's check-and-balance machinery,
specifically mandated by Article VIII of the 1987 Constitution to ensure that no branch of the government or
any of its officials acts without or in excess of jurisdiction or with grave abuse of, discretion amounting to
lack or excess of jurisdiction. They assert that judicial non-interference in military affairs is not deemed as
absolute even in the U.S. They cite Schlesinger and Parker, which were invoked by respondents, as well as
Burns v. Wilson81 and Harmon v. Brucker,82 wherein the U.S. Supreme Court reviewed the proceedings of
military tribunals on account of issues posed concerning due process and violations of constitutional rights.
Also, in Magno v. De Villa83 decided by this Court, petitioners note that We, in fact, exercised the judicial
power to determine whether the APP and the members of the court martial acted with grave abuse o.f
discretion in their military investigation.
Petitioners' contentions are tenable.
Admittedly, the Constitution entrusts the political branches of the government, not the courts, with
superintendence and control over the military because the courts generally lack the competence and
expertise necessary to evaluate military decisions and they are ill-equipped to determine the impact upon
discipline that any particular intrusion upon military authority might have.84 Nevertheless, for the sake of
brevity, We rule that the facts as well as the legal issues in the U.S. cases cited by respondents are not on all
fours with the case of Cadet 1 CL Cudia. Instead, what applies is the 1975 U.S. case of Andrews v.
Knowlton,85 which similarly involved cadets who were separated from the United States Military Academy
due to Honor Code violations. Following Wasson v. Trowbridge 86 and Hagopian v. Knowlton,87 Andrews
re-affirmed the power of the district courts to review procedures used at the service academies in the
separation or dismissal of cadets and midshipmen. While it recognized the "constitutional permissibility of
the military to set and enforce uncommonly high standards of conduct and ethics," it said that the courts
"have expanded at an accelerated pace the scope of judicial access for review of military determinations."
Later, in Kolesa v. Lehman,88 it was opined that it has been well settled that federal courts have jurisdiction
"where there is a substantial claim that prescribed military procedures violates one's constitutional rights."
By 1983, the U.S. Congress eventually made major revisions to the Uniform Code of Military Justice
281
(UCMJ) by expressly providing, among others; for a direct review by the U.S. Supreme Court of decisions
by the military's highest appellate authority.89
Even without referring to U.S. cases, the position of petitioners is still formidable. In this jurisdiction,
Section 1 Article VIII of the 1987 Constitution expanded the scope of judicial power by mandating that the
duty of the courts of justice includes not only "to settle actual controversies involving rights which are
legally demandable and enforceable" but also "to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government" even if the latter does not exercise judicial, quasi-judicial or ministerial functions.90 Grave
abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction or where the power is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, which 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 or to act at all in contemplation of law.91
The proceedings of the Cadet Honor Committee can, for purposes of the Due Process Clause, be considered
a governmental activity. As ruled in Andrews:
The relationship between the Cadet Honor Committee and the separation process at the Academy has been
sufficiently formalized, and is sufficiently interdependent, so as to bring that committee's activities within
the definition of governmental activity for the purposes of our review. While the Academy has long had the
informal practice of referring all alleged violations to the Cadet Honor Committee, the relationship between
that committee and the separation process has to a degree been formalized. x x x
Regardless of whether the relationship be deemed formal or informal, the Honor Committee under its own
procedures provides that a single "not guilty" vote by a member ends the matter, while a "guilty" finding
confronts a cadet with the hard choice of either resigning or electing to go before a Board of Officers. An
adverse finding there results not only in formal separation from the Academy but also in a damaging record
that will follow the cadet through life. Accordingly, we conclude that the Cadet Honor Committee, acting
not unlike a grand jury, is clearly part of the process whereby a cadet can ultimately be adjudged to have
violated the Cadet Honor Code and be separated from the Academy. Therefore, the effect of the committee's
procedures and determinations on the separation process is sufficiently intertwined with the formal
governmental activity which may follow as to bring it properly under judicial review 92
No one is above the law, including the military. In fact, the present Constitution declares it as a matter of
principle that civilian authority is, at all times, supreme over the military. 93 Consistent with the republican
system of checks and balances, the Court has been entrusted, expressly or by necessary implication, with
both the duty and the obligation of determining, in appropriate cases, the validity of any assailed legislative
or executive action.94
SUBSTANTIVE GROUNDS
Cadet's relinquishment of certain civil liberties
Respondents assert that the standard of rights applicable to a cadet is not the same as that of a civilian
because the former' s rights have already been recalibrated to best serve the military purpose and necessity.
They claim that both Gudani and Lt. Col. Kapunan, Jr. v. Gen. De Villa95 recognized that, to a certain
degree, individual rights of persons in the military service may be curtailed by the rules of military
discipline in order to ensure its effectiveness in fulfilling the duties required to be discharged under the law.
Respondents remind that, as a military student aspiring to a commissioned post in the military service, Cadet
1 CL Cudia voluntarily gave up certain civil and political rights which the rest of the civilian population
enjoys. The deliberate surrender of certain freedoms on his part is embodied in the cadets' Honor Code
Handbook. It is noted that at the beginning of their academic life in the PMA, Cadet 1 CL Cudia, along with
the rest of Cadet Corps, took an oath and undertaking to stand by the Honor Code and the Honor System.
To say that a PMA cadet surrenders his fundamental human rights, including the right to due process, is, for
petitioners, contrary to the provisions of Section 3, Article II of the 1987 Constitution, 96 Executive Order
(E.O.) No. 17897 (as amended by E.O. No. 100598), AFP Code of Ethics, Oath of Cadet Corps to the Honor
Code and the Honor System, military professionalism, and, in general, military culture. They maintain that
the HC, the CRAB, and the PMA, grossly and in bad faith misapplied the Honor Code and the Honor
System in deciding Cadet lCL Cudia's case considering that these should not be implemented at the expense
of human rights, due process, and fair play. Further, under the doctrine of constitutional supremacy, they can
never overpower or defy the 1987 Constitution since the former should yield to the latter. Petitioners stress
that the statement that "a cadet can be compelled to surrender some civil rights and liberties in order for the
Code and System to be implemented" simply pertains to what cadets have to sacrifice in order to prove that
they are men or women of integrity and honor, such as the right to entertain vices and the right to freely
choose what they want to say or do. In the context of disciplinary investigation, it does not contemplate a
surrender of the right to due process but, at most, refers to the cadets' rights to privacy and to remain silent.
We concur with the stand of petitioners.
Of course, a student at a military academy must be prepared to subordinate his private interests for the
proper functioning of the educational institution he attends to, one that is with a greater degree than a student
at a civilian public school.99 In fact, the Honor Code and Honor System Handbook of the PMA expresses
that, "[as] a training environment, the Cadet Corps is a society which has its own norms. Each member binds
himself to what is good for him, his subordinates, and his peers. To be part of the Cadet Corps requires the
surrender of some basic rights and liberties for the good of the group."100
It is clear, however, from the teachings of Wasson and Hagopian, which were adopted by Andrews, that a
cadet facing dismissal from the military academy for misconduct has constitutionally protected private
interests (life, liberty, or property); hence, disciplinary proceedings conducted within the bounds of
procedural due process is a must.101For that reason, the PMA is not immune from the strictures of due
process. Where a person's good name, reputation, honor, or integrity is at stake because of what the
government is doing to him, the minimal requirements of the due process clause must be
satisfied.102 Likewise, the cadet faces far more severe sanctions of being expelled from a course of college
instruction which he or she has pursued with a view to becoming a career officer and of probably
being forever denied that career.103
The cases of Gudani and Kapunan, Jr. are inapplicable as they do not specifically pertain to dismissal
proceedings of a cadet in a military academy due to honor violation. In Gudani, the Court denied the petition
that sought to annul the directive from then President Gloria Macapagal-Arroyo, which' enjoined petitioners
from testifying before the Congress without her consent. We ruled that petitioners may be subjected to
military discipline for their defiance of a direct order of the AFP Chief of Staff. On the other hand, in
Kapunan, Jr., this Court upheld the restriction imposed on petitioner since the conditions for his "house
282
arrest" (particularly, that he may not issue any press statements or give any press conference during the
period of his detention) are justified by the requirements of military discipline. In these two cases, the
constitutional rights to information, transparency in matters of public concern, and to free speech - not to
due process clause - were restricted to better serve the greater military purpose. Academic freedom of the
PMA
Petitioners posit that there is no law providing that a guilty finding by the HC may be used by the PMA to
dismiss or recommend the dismissal of a cadet from the PMA. They argue that Honor Code violation is not
among those listed as justifications for the attrition of cadets considering that the Honor Code and the Honor
System do not state that a guilty cadet is automatically terminated or dismissed from service. To them, the
Honor Code and Honor System are "gentleman's agreement" that cannot take precedence over public
interest - in the defense of the nation and in view of the taxpayer's money spent for each cadet. Petitioners
contend that, based on the Civil Code, all written or verbal agreements are null and void if they violate the
law, good morals, good customs, public policy, and public safety.
In opposition, respondents claim that the PMA may impose disciplinary measures and punishment as it
deems fit and consistent with the peculiar needs of the Academy. Even without express provision of a law,
the PMA has regulatory authority to administratively dismiss erring cadets since it is deemed reasonably
written into C.A. No. 1. Moreover, although said law grants to the President the authority of terminating a
cadet's appointment, such power may be delegated to the PMA Superintendent, who may exercise direct
supervision and control over the cadets.
Respondents likewise contend that, as an academic institution, the PMA has the inherent right to promulgate
reasonable norms, rules and regulations that it may deem necessary for the maintenance of school discipline,
which is specifically mandated by Section 3 (2), 104 Article XIV of the 1987 Constitution. As the premiere
military educational institution of the AFP in accordance with Section 30, 105 Article III of C.A. No. 1 and
Sections 58 and 59,106 Chapter 9, Subtitle II, Title VIII, Book IV of E.O. No. 292 ("Administrative Code of
1987"), the PMA is an institution that enjoys academic freedom guaranteed by Section 5 (2),107 Article XIV
of the 1987 Constitution. In Miriam College Foundation, Inc. v. Court of Appeals, 108 it was held that
concomitant with such freedom is the right and duty to instill and impose discipline upon its students. Also,
consistent with lsabelo, Jr. v. Perpetual Help College of Rizal, Inc.109 and Ateneo de Manila University v.
Capulong,110 the PMA has the freedom on who to admit (and, conversely, to expel) given the high degree of
discipline and honor expected from its students who are to form part of the AFP.
For respondents, Cadet 1 CL Cudia cannot, therefore, belatedly assail the Honor Code as basis of the HC' s
decision to recommend his dismissal from the PMA. When he enlisted for enrolment and studied in the
PMA for four years, he knew or should have been fully aware of the standards of discipline imposed on all
cadets and the corresponding penalty for failing to abide by these standards.
In their Reply, petitioners counter that, as shown in lsabelo, Jr. and Ateneo, academic freedom is not
absolute and cannot be exercised in blatant disregard of the right to due process and the 1987 Constitution.
Although schools have the prerogative to choose what to teach, how to teach, and who to teach, the same
does not go so far as to deprive a student of the right to graduate when there is clear evidence that he is
entitled to the same since, in such a case, the right to graduate becomes a vested right which takes
precedence over the limited and restricted right of the educational institution.
While both parties have valid points to consider, the arguments of respondents are more in line with the facts
of this case. We have ruled that the school-student relationship is contractual in nature. Once admitted, a
student's enrolment is not only semestral in duration but for the entire period he or she is expected to
complete it.111 An institution of learning has an obligation to afford its students a fair opportunity to
complete the course they seek to pursue.112 Such contract is imbued with public interest because of the high
priority given by the Constitution to education and the grant to the State of supervisory and regulatory
powers over a educational institutions.113
The school-student relationship has also been held as reciprocal. "[It] has consequences appurtenant to and
inherent in all contracts of such kind -it gives rise to bilateral or reciprocal rights and obligations. The school
undertakes to provide students with education sufficient to enable them to pursue higher education or a
profession. On the other hand, the students agree to abide by the academic requirements of the school and to
observe its rules and regulations."114
Academic freedom or, to be precise, the institutional autonomy of universities and institutions of higher
learning,115has been enshrined in our Constitutions of 1935, 1973, and 1987. 116 In Garcia, this Court
espoused the concurring opinion of U.S. Supreme Court Justice Felix Frankfurter in Sweezy v. New
Hampshire,117 which enumerated "the four essential freedoms" of a university: To determine for itself on
academic grounds (1) who may teach, (2) what may be taught, (3) how it shall be taught, and (4) who may
be admitted to study.118 An educational institution has the power to adopt and enforce such rules as may be
deemed expedient for its government, this being incident to the very object of incorporation, and
indispensable to the successful management of the college.119 It can decide for itself its aims and objectives
and how best to attain them, free from outside coercion or interference except when there is an overriding
public welfare which would call for some restraint.120 Indeed, "academic freedom has never been meant to
be an unabridged license. It is a privilege that assumes a correlative duty to exercise it responsibly. An
equally telling precept is a long recognized mandate, so well expressed in Article 19 of the Civil Code, that
every 'person must, in the exercise of his rights and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith."'121
The schools' power to instill discipline in their students is subsumed in their academic freedom and that "the
establishment of rules governing university-student relations, particularly those pertaining to student
discipline, may be regarded as vital, not merely to the smooth and efficient operation of the institution, but
to its very survival."122 As a Bohemian proverb puts it: "A school without discipline is like a mill without
water." Insofar as the water turns the mill, so does the school's disciplinary power assure its right to survive
and continue operating.123 In this regard, the Court has always recognized the right of schools to impose
disciplinary sanctions, which includes the power to dismiss or expel, on students who violate disciplinary
rules.124 In Miriam College Foundation, Inc. v. Court of Appeals, 125 this Court elucidated:
The right of the school to discipline its students is at once apparent in the third freedom, i.e., "how it shall be
taught." A school certainly cannot function in an atmosphere of anarchy.
Thus, there can be no doubt that the establishment of an educational institution requires rules and regulations
necessary for the maintenance of an orderly educational program and the creation of an educational
environment conducive to learning. Such rules and regulations are equally necessary for the protection of
the students, faculty, and property.
283
Moreover, the school has an interest in teaching the student discipline, a necessary, if not indispensable,
value in any field of learning. By instilling discipline, the school teaches discipline. Accordingly, the right to
discipline the student likewise finds basis in the freedom "what to teach." Incidentally, the school not only
has the right but the duty to develop discipline in its students. The Constitution no less imposes such duty.
[All educational institutions] shall inculcate patriotism and nationalism, foster love of humanity, respect for
human rights, appreciation of the role of national heroes in the historical development of the country, teach
the rights and duties of citizenship, strengthen ethical and spiritual values, develop moral character and
personal discipline, encourage critical and creative thinking, broaden scientific and technological
knowledge, and promote vocational efficiency.
In Angeles vs. Sison, we also said that discipline was a means for the school to carry out its responsibility to
help its students "grow and develop into mature, responsible, effective and worthy citizens of the
community."
Finally, nowhere in the above formulation is the right to discipline more evident than in "who may be
admitted to study." If a school has the freedom to determine whom to admit, logic dictates that it also has the
right to determine whom to exclude or expel, as well as upon whom to impose lesser sanctions such as
suspension and the withholding of graduation privileges. 126
The power of the school to impose disciplinary measures extends even after graduation for any act done by
the student prior thereto. In University of the Phils. Board of Regents v. Court of Appeals, 127 We upheld the
university's withdrawal of a doctorate degree already conferred on a student who was found to have
committed intellectual dishonesty in her dissertation. Thus:
Art. XIV, §5 (2) of the Constitution provides that "[a]cademic freedom shall be enjoyed in all institutions of
higher learning." This is nothing new. The 1935 Constitution and the 1973 Constitution likewise provided
for the academic freedom or, more precisely, for the institutional autonomy of universities and institutions of
higher learning. As pointed out by this Court in Garcia v. Faculty Admission Committee, Loyola School of
Theology, it is a freedom granted to "institutions of higher learning" which is thus given "a wide sphere of
authority certainly extending to the choice of students." If such institution of higher learning can decide who
can and who cannot study in it, it certainly can also determine on whom it can confer the honor and
distinction of being its graduates.
Where it is shown that the conferment of an honor or distinction was obtained through fraud, a university
has the right to revoke or withdraw the honor or distinction it has thus conferred. This freedom of a
university does not terminate upon the "graduation" of a student, .as the Court of Appeals held. For it is
precisely the "graduation" of such a student that is in question. It is noteworthy that the investigation of
private respondent's case began before her graduation. If she was able to join the graduation ceremonies on
April 24, 1993, it was because of too many investigations conducted before the Board of Regents finally
decided she should not have been allowed to graduate.
Wide indeed is the sphere of autonomy granted to institutions of higher learning, for the constitutional grant
of academic freedom, to quote again from Garcia v. Faculty Admission Committee, Loyola School of
Theology, "is not to be construed in a niggardly manner or in a grudging fashion."
Under the U.P. Charter, the Board of Regents is the highest governing body of the University of the
Philippines. It has the power to confer degrees upon the recommendation of the University Council. It
follows that if the conferment of a degree is founded on error or fraud, the Board of Regents is also
empowered, subject to the observance of due process, to withdraw what it has granted without violating a
student's rights. An institution of higher learning cannot be powerless if it discovers that an academic degree
it has conferred is not rightfully deserved. Nothing can be more objectionable than bestowing a university's
highest academic degree upon an individual who has obtained the same through fraud or deceit. The pursuit
of academic excellence is the university's concern. It should be empowered, as an act of self-defense, to take
measures to protect itself from serious threats to its integrity.
While it is true that the students are entitled to the right to pursue their education, the USC as an educational
institution is also entitled to pursue its academic freedom and in the process has the concomitant right to see
to it that this freedom is not jeopardized.128
It must be borne in mind that schools are established, not merely to develop the intellect and skills of the
studentry, but to inculcate lofty values, ideals and attitudes; nay, the development, or flowering if you will,
of the total man.129Essentially, education must ultimately be religious, i.e., one which inculcates duty and
reverence.130 Under the rubric of "right to education," students have a concomitant duty to learn under the
rules laid down by the school.131 Every citizen has a right to select a profession or, course of study, subject
to fair, reasonable, and equitable admission and academic requirements. 132 The PMA is not different. As the
primary training and educational institution of the AFP, it certainly has the right to invoke academic
freedom in the enforcement of its internal rules and regulations, which are the Honor Code and the Honor
System in particular.
The Honor Code is a set of basic and fundamental ethical and moral principle. It is the minimum standard
for cadet behavior and serves as the guiding spirit behind each cadet's action. It is the cadet's responsibility
to maintain the highest standard of honor. Throughout a cadet's stay in the PMA, he or she is absolutely
bound thereto. It binds as well the members of the Cadet Corps from its alumni or the member of the so-
called "Long Gray Line."
Likewise, the Honor Code constitutes the foundation for the cadets' character development. It defines the
desirable values they must possess to remain part of the Corps; it develops the atmosphere of trust so
essential in a military organization; and it makes them professional military soldiers. 133 As it is for character
building, it should not only be kept within the society of cadets. It is best adopted by the Cadet Corps with
the end view of applying it outside as an officer of the AFP and as a product of the PMA.134
The Honor Code and System could be justified as the primary means of achieving the cadets' character
development and as ways by which the Academy has chosen to identify those who are deficient in
conduct.135 Upon the Code rests the ethical standards of the Cadet Corps and it is also an institutional goal,
ensuring that graduates have strong character, unimpeachable integrity, and moral standards of the highest
order.136 To emphasize, the Academy's disciplinary system as a whole is characterized as "correctional and
educational in nature rather than being legalistic and punitive." Its purpose is to teach the cadets "to be
prepared to accept full responsibility for all that they do or fail to do and to place loyalty to the service above
self-interest or loyalty to friends or associates. "137Procedural safeguards in a student disciplinary case
284
Respondents stress that Guzman v. National University138 is more appropriate in determining the minimum
standards for the imposition of disciplinary sanctions in academic institutions. Similarly, with the guideposts
set in Andrews, they believe that Cadet 1 CL Cudia was accorded due process.
On the other hand, petitioners argue that the HC, the CRAB and the PMA fell short in observing the
important safeguards laid down in Ang Tibay v. CIR139 and Non v. Judge Dames II,140 which set the
minimum standards to satisfy the demands of procedural due process in the imposition of disciplinary
sanctions. For them, Guzman did not entirely do away with the due process requirements outlined in Ang
Tibay as the Court merely stated that the minimum requirements in the Guzman case are more apropos.
Respondents rightly argued.
Ateneo de Manila University v. Capulong141 already settled the issue as it held that although both Ang Tibay
and Guzman essentially deal with the requirements of due process, the latter case is more apropos since it
specifically deals with the minimum standards to be satisfied in the imposition of disciplinary sanctions in
academic institutions. That Guzman is the authority on the procedural rights of students in disciplinary cases
was reaffirmed by the Court in the fairly recent case of Go v. Colegio De San Juan De Letran. 142
In Guzman, the Court held that there are minimum standards which must be met to satisfy the demands of
procedural due process, to wit:
(1) the students must be informed in writing of the nature and cause of any accusation against them; (2) they
shall have the right to answer the charges against them, with the assistance of counsel, if desired; (3) they
shall be informed of the evidence against them; ( 4) they shall have the right to adduce evidence in their own
behalf; and (5) the evidence must be duly considered by the investigating committee or official designated
by the school authorities to hear and decide the case. 143
We have been consistent in reminding that due process in disciplinary cases involving students does not
entail proceedings and hearings similar to those prescribed for actions and proceedings in courts of
justice;144 that the proceedings may be summary;145 that cross-examination is not an essential part of the
investigation or hearing;146and that the required proof in a student disciplinary action, which is an
administrative case, is neither proof beyond reasonable doubt nor preponderance of evidence but only
substantial evidence or "such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion."147
What is crucial is that official action must meet minimum standards of fairness to the individual, which
generally encompass the right of adequate notice and a meaningful opportunity to be heard. 148 As held in De
La Salle University, Inc. v. Court of Appeals:149
Notice and hearing is the bulwark of administrative due process, the right to which is among the primary
rights that must be respected even in administrative proceedings. The essence of due process is simply an
opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side or
an opportunity to seek reconsideration of the action or ruling complained of. So long as the party is given
the opportunity to advocate her cause or defend her interest in due course, it cannot be said that there was
denial of due process.
A formal trial-type hearing is not, at all times and in all instances, essential to due process - it is enough that
the parties are given a fair and reasonable opportunity to explain their respective sides of the controversy
and to present supporting evidence on which a fair decision can be based. "To be heard" does not only mean
presentation of testimonial evidence in court - one may also be heard through pleadings and where the
opportunity to be heard through pleadings is accorded, there is no denial of due process. 150
The PMA Honor Code explicitly recognizes that an administrative proceeding conducted to investigate a
cadet's honor violation need not be clothed with the attributes of a judicial proceeding. It articulates that –
The Spirit of the Honor Code guides the Corps in identifying and assessing misconduct. While cadets are
interested in legal precedents in cases involving Honor violations, those who hold the Spirit of the Honor
Code dare not look into these precedents for loopholes to justify questionable acts and they are not to
interpret the system to their own advantage.
The Spirit of the Honor Code is a way for the cadets to internalize Honor in a substantive way. Technical
and procedural misgivings of the legal systems may avert the true essence of imparting the Spirit of the
Code for the reason that it can be used to make unlawful attempt to get into the truth of matters especially
when a cadet can be compelled to surrender some civil rights and liberties in order for the Code and System
to be implemented. By virtue of being a cadet, a member of the CCAFP becomes a subject of the Honor
Code and System. Cadet's actions are bound by the existing norms that are logically applied through the
Code and System in order to realize the Academy's mission to produce leaders of character - men of
integrity and honor.151
One of the fundamental principles of the Honor System also states:
2. The Honor System correlates with legal procedures of the state's Justice System but it does not demean its
Spirit by reducing the Code to a systematic list of externally observed rules. Where misinterpretations and
loopholes arise through legalism and its technicalities, the objective of building the character of the cadets
becomes futile. While, generally, Public Law penalizes only the faulty acts, the Honor System tries to
examine both the action and the intention.152
Like in other institutions of higher learning, there is aversion towards undue judicialization of an
administrative hearing in the military academy. It has been said that the mission of the military is unique in
the sense that its primary business is to fight or be ready to fight wars should the occasion arise, and that
over-proceduralizing military determinations necessarily gives soldiers less time to accomplish this
task.153 Extensive cadet investigations and complex due process hearing could sacrifice simplicity,
practicality, and timeliness. Investigations that last for several days or weeks, sessions that become
increasingly involved with legal and procedural' points, and legal motions and evidentiary objections that
are irrelevant and inconsequential tend to disrupt, delay, and confuse the dismissal proceedings and make
them unmanageable. Excessive delays cannot be tolerated since it is unfair to the accused, to his or her
fellow cadets, to the Academy, and, generally, to the Armed Forces. A good balance should, therefore, be
struck to achieve fairness, thoroughness, and efficiency. 154 Considering that the case of Cadet 1 CL Cudia is
one of first impression in the sense that this Court has not previously dealt with the particular issue of a
dismissed cadet's right to due process, it is necessary for Us to refer to U.S. jurisprudence for some
guidance. Notably, our armed forces have been patterned after the U.S. Army and the U.S. military code
produced a salutary effect in the military justice system of the Philippines. 155 Hence, pertinent case laws
interpreting the U.S. military code and practices have persuasive, if not the same, effect in this jurisdiction.
285
We begin by stating that U.S. courts have uniformly viewed that "due process" is a flexible concept,
requiring consideration in each case of a variety of circumstances and calling for such procedural protections
as the particular situation demands.156 Hagopian opined:
In approaching the question of what process is due before governmental action adversely affecting private
interests may properly be taken, it must be recognized that due process is not a rigid formula or simple rule
of thumb to be applied undeviatingly to any given set of facts. On the contrary, it is a flexible concept which
depends upon the balancing of various factors, including the nature of the private right or interest that is
threatened, the extent to which the proceeding is adversarial in character, the severity and consequences of
any action that might be taken, the burden that would be imposed by requiring use of all or part of the full
panoply of trial-type procedures, and the existence of other overriding interests, such as the necessity for
prompt action in the conduct of crucial military operations. The full context must therefore be considered in
each case.157 (Emphasis supplied)
Wasson, which was cited by Hagopian, broadly outlined the minimum standards of due process required in
the dismissal of a cadet. Thus:
[W]hen the government affects the private interests of individuals, it may not proceed arbitrarily but must
observe due process of law. x x x Nevertheless, the flexibility which is inherent in the concept of due
process of law precludes the dogmatic application of specific rules developed in one context to entirely
distinct forms of government action. "For, though 'due process of law' generally implies and includes actor,
reus, judex, regular allegations, opportunity to answer, and a trial according to some settled course of
judicial proceedings, * * * yet, this is not universally true." x x x Thus, to determine in any given case what
procedures due process requires, the court must carefully determine and balance the nature of the private
interest affected and of the government interest involved, taking account of history and the precise
circumstances surrounding the case at hand.
While the government must always have a legitimate concern with the subject matter before it may validly
affect private interests, in particularly vital and sensitive areas of government concern such as national
security and military affairs, the private interest must yield to a greater degree to the governmental. x x x
Few decisions properly rest so exclusively within the discretion of the appropriate government officials than
the selection, training, discipline and dismissal of the future officers of the military and Merchant Marine.
Instilling and maintaining discipline and morale in these young men who will be required to bear weighty
responsibility in the face of adversity -- at times extreme -- is a matter of substantial national importance
scarcely within the competence of the judiciary. And it cannot be doubted that because of these factors
historically the military has been permitted greater freedom to fashion its disciplinary procedures than the
civilian authorities.
We conclude, therefore, that due process only requires for the dismissal of a Cadet from the Merchant
Marine Academy that he be given a fair hearing at which he is apprised of the charges against him and
permitted a defense. x x x For the guidance of the parties x x x the rudiments of a fair hearing in broad
outline are plain. The Cadet must be apprised of the specific charges against him. He must be given an
adequate opportunity to present his defense both from the point of view of time and the use of witnesses and
other evidence. We do not suggest, however, that the Cadet must be given this opportunity both when
demerits are awarded and when dismissal is considered. The hearing may be procedurally informal and need
not be adversarial.158 (Emphasis supplied)
In Andrews, the U.S. Court of Appeals held that Wasson and Hagopian are equally controlling in cases
where cadets were separated from the military academy for violation of the Honor Code. Following the two
previous cases, it was ruled that in order to be proper and immune from constitutional infirmity, a cadet who
is sought to be dismissed or separated from the academy must be afforded a hearing, be apprised of the
specific charges against him, and be given an adequate opportunity to present his or her defense both from
the point of view of time and the use of witnesses and other evidence. 159 Conspicuously, these vital
conditions are not too far from what We have already set in Guzman and the subsequent rulings in Alcuaz v.
Philippine School of Business Administration160 and De La Salle University, Inc. v. Court of Appeals.161
In this case, the investigation of Cadet 1 CL Cudia' s Honor Code violation followed the prescribed
procedure and existing practices in the PMA. He was notified of the Honor Report from Maj. Hindang. He
was then given the opportunity to explain the report against him. He was informed about his options and the
entire process that the case would undergo. The preliminary investigation immediately followed after he
replied and submitted a written explanation. Upon its completion, the investigating team submitted a written
report together with its recommendation to the HC Chairman. The HC thereafter reviewed the findings and
recommendations. When the honor case was submitted for formal investigation, a new team was assigned to
conduct the hearing. During the formal investigation/hearing, he was informed of the charge against him and
given the right to enter his plea. He had the chance to explain his side, confront the witnesses against him,
and present evidence in his behalf. After a thorough discussion of the HC voting members, he was found to
have violated the ' Honor Code. Thereafter, the guilty verdict underwent the review process at the Academy
level - from the OIC of the HC, to the SJA, to the Commandant of Cadets, and to the PMA Superintendent.
A separate investigation was also conducted by the HTG. Then, upon the directive of the AFP-GHQ to
reinvestigate the case, a review was conducted by the CRAB. Further, a Fact-Finding Board/Investigation
Body composed of the CRAB members and the PMA senior officers was constituted to conduct a deliberate
investigation of the case. Finally, he had the opportunity to appeal to the President. Sadly for him, all had
issued unfavorable rulings.
It is well settled that by reason of their special knowledge and expertise gained from the handling of specific
matters falling under their respective jurisdictions, the factual findings of administrative tribunals are
ordinarily accorded respect if not finality by the Court, unless such findings are not supported by evidence
or vitiated by fraud, imposition or collusion; where the procedure which led to the findings is irregular;
when palpable errors are committed; or when a grave abuse of discretion, arbitrariness, or capriciousness is
manifest.162 In the case of Cadet 1 CL Cudia, We find no reason to deviate from the general rule. The
grounds therefor are discussed below seriatim:
As to the right to be represented by a counsel –
For petitioners, respondents must be compelled to give Cadet 1 CL Cudia the right to be represented by a
counsel who could actively participate in the proceedings like in the cross-examination of the witnesses
against him before the CRAB or HC, if remanded. This is because while the CRAB allowed him to be
represented by a PAO lawyer, the counsel was only made an observer without any right to intervene and
demand respect of Cadet 1 CL Cudia's rights.163 According to them, he was not sufficiently given the
opportunity to seek a counsel and was not even asked if he would like to have one. He was only properly
represented when it was already nearing graduation day after his family sought the assistance of the PAO.
Petitioners assert that Guzman is specific in stating that the erring student has the right to answer the charges
against him or her with the assistance of counsel, if desired.
286
On the other hand, respondents cited Lumiqued v. Exevea164 and Nera v. The Auditor General165 in asserting
that the right to a counsel is not imperative in administrative investigations or non-criminal proceedings.
Also, based on Cadet lCL Cudia's academic standing, he is said to be obviously not untutored to fully
understand his rights and express himself. Moreover, the confidentiality of the HC proceedings worked
against his right to be represented by a counsel. In any event, respondents claim that Cadet 1 CL Cudia was
not precluded from seeking a counsel's advice in preparing his defense prior to the HC hearing.
Essentially, petitioners claim .. that Cadet lCL Cudia is guaranteed the right to have his counsel not just in
assisting him in the preparation for the investigative hearing before the HC and the CRAB but in
participating fully in said hearings. The Court disagrees.
Consistent with Lumiqued and Nera, there is nothing in the 1987 Constitution stating that a party in a non-
litigation proceeding is entitled to be represented by counsel. The assistance of a lawyer, while desirable, is
not indispensable. Further, in Remolona v. Civil Service Commission, 166 the Court held that "a party in an
administrative inquiry may or may not be assisted by counsel, irrespective of the nature of the charges and
of the respondent's capacity to represent himself, and no duty rests on such body to furnish the person being
investigated with counsel." Hence, the administrative body is under no duty to provide the person with
counsel because assistance of counsel is not an absolute requirement.
More in point is the opinion in Wasson, which We adopt. Thus:
The requirement of counsel as an ingredient of fairness is a function of all of the other aspects of the
hearing. Where the proceeding is non-criminal in nature, where the hearing is investigative and not
adversarial and the government does not proceed through counsel, where the individual concerned is mature
and educated, where his knowledge of the events x x x should enable him to develop the facts adequately
through available sources, and where the other aspects of the hearing taken as a whole are fair, due process
does not require representation by counsel.167
To note, U.S. courts, in general, have declined to recognize a right to representation by counsel, as a
function of due process, in military academy disciplinary proceedings. 168 This rule is principally motivated
by the policy of "treading lightly on the military domain, with scrupulous regard for the power and authority
of the military establishment to govern its own affairs within the broad confines of constitutional due
process" and the courts' views that disciplinary proceedings are not judicial in nature and should be kept
informal, and that literate and educated cadets should be able to defend themselves. 169 In Hagopian, it was
ruled that the importance of informality in the proceeding militates against a requirement that the cadet be
accorded the right to representation by counsel before the Academic Board and that unlike the welfare
recipient who lacks the training and education needed to understand his rights and express himself, the cadet
should be capable of doing so.170 In the subsequent case of Wimmer v. Lehman,171 the issue was not access
to counsel but the opportunity to have counsel, instead of oneself, examine and cross-examine witnesses,
make objections, and argue the case during the hearing. Disposing of the case, the U.S. Court of Appeals for
the Fourth Circuit was not persuaded by the argument that an individual of a midshipman's presumed
intelligence, selected because he is expected to be able to care for himself and others, often under difficult
circumstances, and who has full awareness of what he is facing, with counsel's advice, was deprived of due
process by being required to present his defense in person at an investigatory hearing.
In the case before Us, while the records are bereft of evidence that Cadet 1 CL Cudia was given the option
or was able to seek legal advice prior to and/or during the HC hearing, it is indubitable that he was assisted
by a counsel, a PAO lawyer to be exact, when the CRAB reviewed and reinvestigated the case. The
requirement of due process is already satisfied since, at the very least, the counsel aided him in the drafting
and filing of the Appeal Memorandum and even acted as an observer who had no right to actively
participate in the proceedings (such as conducting the cross-examination). Moreover, not to be missed out
are the facts that the offense committed by Cadet 1 CL Cudia is not criminal in nature; that the hearings
before the HC and the CRAB were investigative and not adversarial; and that Cadet lCL Cudia's excellent-
academic standing puts him in the best position to look after his own vested interest in the Academy.
As to the confidentiality of records of the proceedings –
Petitioners allege that when Maj. Gen. Lopez denied in his March 11, 2014 letter Cadet lCL Cudia's request
for documents, footages, and recordings relevant to the HC hearings, the vital evidence negating the
regularity of the HC trial and supporting his defense have been surely overlooked by the CRAB in its case
review. Indeed, for them, the answers on whether Cadet 1 CL Cudia was deprived of due process and
whether he lied could easily be unearthed from the video and other records of the HC investigation.
Respondents did not deny their existence but they refused to present them for the parties and the Court to
peruse. In particular, they note that the Minutes of the HC dated January 21, 2014 and the HC Formal
Investigation Report dated January 20, 2014 were considered by the CRAB but were not furnished to
petitioners and the Court; hence, there is no way to confirm the truth of the alleged statements therein. In
their view, failure to furnish these documents could only mean that it would be adverse if produced pursuant
to Section 3 (e), Rule 131 of the Rules of Court. 172
For lack of legal basis on PMA' s claim of confidentiality of records, petitioners contend that it is the
ministerial duty of the HC to submit to the CRAB, for the conduct of intelligent review of the case, all its
records of the proceedings, including video footages of the deliberations and voting. They likewise argue
that PMA' s refusal to release relevant documents to Cadet 1 CL Cudia under the guise of confidentiality
reveals another misapplication of the Honor Code, which merely provides: "A cadet who becomes part of
any investigation is subject to the existing regulations pertaining to rules of confidentiality and, therefore,
must abide to the creed of secrecy. Nothing shall be disclosed without proper guidance from those with
authority" (IV. The Honor System, Honor Committee, Cadet Observer). This provision, they say, does not
deprive Cadet 1 CL Cudia of his right to obtain copies and examine relevant documents pertaining to his
case.
Basically, petitioners want Us to assume that the documents, footages, and recordings relevant to the HC
hearings are favorable to Cadet 1 CL Cudia's cause, and, consequently, to rule that respondents' refusal to
produce and have them examined is tantamount to the denial of his right to procedural due process. They are
mistaken.
In this case, petitioners have not particularly identified any documents, witness testimony, or oral or written
presentation of facts submitted at the hearing that would support Cadet 1 CL Cudia's defense. The Court
may require that an administrative record be supplemented, but only "where there is a 'strong showing or
bad faith or improper behavior' on the part of the agency,"173 both of which are not present here. Petitioners
have not specifically indicated the nature of the concealed evidence, if any, and the reason for withholding
it. What they did was simply supposing that Cadet 1 CL Cudia's guilty verdict would be overturned with the
production and examination of such documents, footages, and recordings. As will be further shown in the
discussions below, the requested matters, even if denied, would not relieve Cadet 1 CL Cudia's predicament.
If at all, such denial was a harmless procedural error since he was not seriously prejudiced thereby.
287
As to the ostracism in the PMA –
To petitioners, the CRAB considered only biased testimonies and evidence because Special Order No. 1
issued on February 21, 2014, which directed the ostracism of Cadet 1 CL Cudia, left him without any
opportunity, to secure statements of his own witnesses. He could not have access to or approach the cadets
who were present during the trial and who saw the 8-1 voting result. It is argued that the Order directing
Cadet 1 CL Cudia's ostracism is of doubtful legal validity because the Honor Code unequivocally
announced: "x x x But by wholeheartedly dismissing the cruel method of ostracizing Honor Code violators,
PMA will not have to resort to other humiliating means and shall only have the option to make known
among its alumni the names of those who have not sincerely felt remorse for violating the Honor Code."
On their part, respondents assert that neither the petition nor the petition-in-intervention attached a full text
copy of the alleged Special Order No. 1. In any case, attributing its issuance to PMA is improper and
misplaced because of petitioners' admission that ostracism has been absolutely dismissed as an Academy-
sanctioned activity consistent with the trend in International Humanitarian Law that the PMA has included
in its curriculum. Assuming that said Order was issued, respondents contend that it purely originated from
the cadets themselves, the sole purpose of which was to give a strong voice to the Cadet Corps by declaring
that they did not tolerate Cadet 1 CL Cudia's honor violation and breach of confindentiality of the HC
proceedings.
More importantly, respondents add that it is highly improbable and unlikely that Cadet 1 CL Cudia was
ostracized by his fellow cadets. They manifest that as early as January 22, 2014, he was already transferred
to the Holding Center. The practice of billeting an accused cadet at the Holding Center is provided for in the
Honor Code Handbook. Although within the PMA compound, the Holding Center is off-limits to cadets
who do not have any business to conduct therein. The cadets could not also ostracize him during mess times
since Cadet 1 CL Cudia opted to take his meals at the Holding Center. The circumstances obtaining when
Special Order No. 1 was issued clearly foreclose the possibility that he was ostracized in common areas
accessible to other cadets. He remained in the Holding Center until March 16, 2014 when he voluntarily left
the PMA. Contrary to his claim, guests were also free to visit him in the Holding Center.
However, petitioners swear that Cadet 1 CL Cudia suffered from ostracism in the PMA. The practice was
somehow recognized by respondents in their Consolidated Comment and by PMA Spokesperson Maj.
Flores in a news report. The CHR likewise confirmed the same in its Resolution dated May 22, 2014. For
them, it does not matter where the ostracism order originated from because the PMA appeared to sanction it
even if it came from the cadets themselves. There was a tacit approval of an illegal act. If not, those cadets
responsible for ostracism would have been charged by the PMA officials. Finally, it is claimed that Cadet 1
CL Cudia did not choose to take his meals at the Holding Center as he was not allowed to leave the place.
Petitioners opine that placing the accused cadet in the Holding Center is inconsistent with his or her
presumed innocence and certainly gives the implication of ostracism.
We agree with respondents. Neither the petition nor the petition-inintervention attached a full text copy or
even a pertinent portion of the alleged Special Order No. 1, which authorized the ostracism of Cadet 1 CL
Cudia. Being hearsay, its existence and contents are of doubtful veracity. Hence, a definite ruling on the
matter can never be granted in this case.
The Court cannot close its eyes though on what appears to be an admission of Cadet 1 CL Mogol during the
CHR hearing that, upon consultation with the entire class, the baron, and the Cadet Conduct Policy Board,
they issued an ostracism order against Cadet 1 CL Cudia. 174 While not something new in a military
academy,175 ostracism's continued existence in the modem times should no longer be countenanced. There
are those who argue that the "silence" is a punishment resulting in the loss of private interests, primarily that
of reputation, and that such penalty may render illusory the possibility of vindication by the reviewing body
once found guilty by the HC.176 Furthermore, in Our mind, ostracism practically denies the accused cadet's
protected rights to present witnesses or evidence in his or her behalf and to be presumed innocent until
finally proven otherwise in a proper proceeding.
As to Cadet 1 CL Cudia's stay in the Holding Center, the Court upholds the same. The Honor Code and
Honor System Handbook provides that, in case a cadet has been found guilty by the HC of violating the
Honor Code and has opted not to resign, he or she may stay and wait for the disposition of the case. In such
event, the cadet is not on full-duty status and shall be billeted at the HTG Holding Center. 177 Similarly, in
the U.S., the purpose of "Boarders Ward" is to quarter those cadets who are undergoing separation actions.
Permitted to attend classes, the cadet is sequestered , therein until final disposition of the case. In Andrews,
it was opined that the segregation of cadets in the Ward was a proper exercise of the discretionary authority
of Academy officials. It relied on the traditional doctrine that "with respect to decisions made by Army
authorities, 'orderly government requires us to tread lightly on the military domain, with scrupulous regard
for the power and authority of the military establishment to govern its own affairs within the broad confines
of constitutional due process.'" Also, in Birdwell v. Schlesinger, 178 the "administrative segregation" was held
to be a reasonable exercise of military discipline and could not be considered an invasion of the rights to
freedom of speech and freedom of association.
Late and vague decisions –
It is claimed that Cadet 1 CL Cudia was kept in the dark as to the charge against him and the decisions
arrived at by the HC, the CRAB, and the PMA. No written decision was furnished to him, and if any, the
information was unjustly belated and the justifications for the decisions were vague. He had to constantly
seek clarification and queries just to be apprised of what he was confronted with.
Petitioners relate that upon being informed of the "guilty" verdict, Cadet 1 CL Cudia immediately inquired
as to the grounds therefor, but Cadet 1 CL Mogol answered that it is confidential since he would still appeal
the same. By March 11, 2014, Maj. Gen. Lopez informed Cadet 1 CL Cudia that the CRAB already
forwarded their recommendation for his dismissal to the General Headquarters sometime in February-March
2014. Even then, he received no decision/recommendation on his case, verbally or in writing. The PMA
commencement exercises pushed through with no written decision from the CRAB or the PMA on his
appeal. The letter from the Office of the Adjutant General of the AFP was suspiciously delayed when the
Cudia family received the same only on March 20, 2014. Moreover, it fell short in laying down with
specificity the factual and legal bases used by the CRAB and even by the Office of the Adjutant General.
There remains no proof that the CRAB and the PMA considered the evidence presented by Cadet 1 CL
Cudia, it being uncertain as to what evidence was weighed by the CRAB, whether the same is substantial,
and whether the new evidence submitted by him was ever taken into account.
In refutation, respondents allege the existence of PMA's· practice of orally declaring the HC finding, not
putting it in a written document so as to protect the integrity of the erring cadet and guard the confidentiality
of the HC proceedings pursuant to the Honor System. Further, they aver that a copy of the report of the
CRAB, dated March 10, 2014, was not furnished to Cadet 1 CL Cudia because it was his parents who filed
the appeal, hence, were the ones who were given a copy thereof.
288
Petitioners' contentions have no leg to stand on. While there is a constitutional mandate stating that "[no]
decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the
law on which it is based,"179 such provision does not apply in Cadet 1 CL Cudia's case. Neither Guzman nor
Andrews require a specific form and content of a decision issued in disciplinary proceedings. The Honor
Code and Honor System Handbook also has no written rule on the matter. Even if the provision applies,
nowhere does it demand that a point-by-point consideration and resolution of the issues raised by the parties
are necessary.180 What counts is that, albeit furnished to him late, Cadet 1 CL Cudia was informed of how it
was decided, with an explanation of the factual and legal reasons that led to the conclusions of the reviewing
body, assuring that it went through the processes of legal reasoning. He was not left in the dark as to how it
was reached and he knows exactly the reasons why he lost, and is able to pinpoint the possible errors for
review.
As to the blind adoption of the HC findings –
Petitioners assert that, conformably with Sections 30 and 31 of C.A. No. 1, only President Aquino as the
Commander-in-Chief has the power to appoint and remove a cadet for a valid/legal cause. The law gives no
authority to the HC as the sole body to determine the guilt or innocence of a cadet. It also does not empower
the PMA to adopt the guilty findings of the HC as a basis for recommending the cadet's dismissal. In the
case of Cadet 1 CL Cudia, it is claimed that the PMA blindly followed the HC's finding of guilt in
terminating his military service.
Further, it is the ministerial duty of the CRAB to conduct a review de nova of all records without requiring
Cadet 1 CL Cudia to submit new evidence if it is physically impossible for him to do so. In their minds,
respondents cannot claim that the CRAB and the PMA thoroughly reviewed the HC recommendation and
heard Cadet lCL Cudia's side. As clearly stated in the letter from the Office of the AFP Adjutant General,
"[in] its report dated March 10, 2014, PMA CRAB sustained the findings and recommendations of the
Honor Committee x x x It also resolved the appeal filed by the subject Cadet." However, the Final
Investigation Report of the CRAB was dated March 23, 2014. While such report states that a report was
submitted to the AFP General Headquarters on March 10, 2014 and that it was only on March 12, 2014 that
it was designated as a Fact-Finding Board/Investigating Body, it is unusual that the CRAB would do the
same things twice. This raised a valid and well-grounded suspicion that the CRAB never undertook an in-
depth investigation/review the first time it came out with its report, and the Final Investigation Report was
drafted merely as an afterthought when the lack of written decision was pointed out by petitioners so as to
remedy the apparent lack of due process during the CRAB investigation and review.
Despite the arguments, respondents assure that there was a proper assessment of the procedural and legal
correctness of the guilty verdict against Cadet 1 CL Cudia. They assert that the higher authorities of the
PMA did not merely rely on the findings of the HC, noting that there was also a separate investigation
conducted by the HTG from January 25 to February 7, 2014. Likewise, contrary to the contention of
petitioners that the CRAB continued with the review of the case despite the absence of necessary
documents, the CRAB conducted its own review of the case and even conducted another investigation by
constituting the Fact-Finding Board/Investigating Body. For respondents, petitioners failed to discharge the
burden of proof in showing bad faith on the part of the PMA. In the absence of evidence to the contrary and
considering further that petitioners' allegations are merely self-serving and baseless, good faith on the part of
the PMA' s higher authorities is presumed and should, therefore, prevail.
We agree with respondents.
The Honor Committee, acting on behalf of the Cadet Corps, has a limited role of investigating and
determining whether or not the alleged offender has actually violated the Honor Code. 181 It is given the
responsibility of administering the Honor Code and, in case of breach, its task is entirely investigative,
examining in the first instance a suspected violation. As a means of encouraging self-discipline, without
ceding to it any authority to make final adjudications, the Academy has assigned it the function of
identifying suspected violators.182 Contrary to petitioners' assertion, the HC does not have the authority to
order the separation of a cadet from the Academy. The results of its proceedings are purely recommendatory
and have no binding effect. The HC determination is somewhat like an indictment, an allegation, which, in
Cadet 1 CL Cudia's case, the PMA-CRAB investigated de novo.183 In the U.S., it was even opined that due
process safeguards do not actually apply at the Honor Committee level because it is only a "charging body
whose decisions had no effect other than to initiate de nova proceedings before a Board of Officers." 184
Granting, for argument's sake, that the HC is covered by the due process clause and that irregularities in its
proceedings were in fact committed, still, We cannot rule for petitioners. It is not required that procedural
due process be afforded at every stage of developing disciplinary action. What is required is that an adequate
hearing be held before the final act of dismissing a cadet from the military academy. 185 In the case of Cadet
1 CL Cudia, the OIC of HC, the SJA, the Commandant of Cadets, and the PMA Superintendent reviewed
the HC findings. A separate investigation was also conducted by the HTG. Then, upon the directive of the
AFP-GHQ to reinvestigate the case, a review was conducted by the CRAB. Finally, a Fact-Finding
Board/Investigating Body composed of the CRAB members and the PMA senior officers was constituted to
conduct a deliberate investigation of the case. The Board/Body actually held hearings on March 12, 13, 14
and 20, 2014. Instead of commendation, petitioners find it "unusual" that the CRAB would do the same
things twice and suspect that it never undertook an in-depth investigation/review the first time it came out
with its report. Such assertion is mere conjecture that deserves scant consideration.
As to the dismissal proceedings as sham trial –
According to petitioners, the proceedings before the HC were a sham. The people behind Cadet ICL Cudia's
charge, investigation, and conviction were actually the ones who had the intent to deceive and who took
advantage of the situation. Cadet 1 CL Raguindin, who was a senior HC member and was the second in rank
to Cadet 1 CL Cudia in the Navy cadet 1 CL, was part of the team which conducted the preliminary
investigation. Also, Cadet I CL Mogol, the HC Chairman, previously charged Cadet 1 CL Cudia with honor
violation allegedly for cheating (particularly, conniving with and tutoring his fellow cadets on a difficult
topic by giving solutions to a retake exam) but the charge was dismissed for lack of merit. Even if he was a
non-voting member, he was in a position of influence and authority. Thus, it would be a futile exercise for
Cadet 1 CL Cudia to resort to the procedure for the removal of HC members. 186
Further, no sufficient prior notice of the scheduled CRAB hearing was given to Cadet I CL Cudia, his
family, or his PAO counsel. During one of her visits to him in the Holding Center, petitioner-intervenor was
advised to convince his son to resign and immediately leave the PMA. Brig. Gen. Costales, who later
became the CRAB Head, also categorically uttered to Annavee: "Your brother, he lied!" The CRAB
conferences were merely used to formalize his dismissal and the PMA never really intended to hear his side.
For petitioners, these are manifestations of PMA's clear resolve to dismiss him no matter what.
For their part, respondents contend that the CllR's allegation that Maj. Hindang acted in obvious bad faith
and that he failed to discharge his duty to be a good father of cadets when he "paved the road to [Cadet 1 CL
Cudia's] sham trial by the Honor Committee" is an unfounded accusation. They note that when Maj.
Hindang was given the DR of Cadet 1 CL Cudia, he revoked the penalty awarded because of his
289
explanation. However, all revocations of awarded penalties are subject to the review of the STO. Therefore,
it was at the instance of Maj. Leander and the established procedure followed at the PMA that Maj. Hindang
was prompted to investigate the circumstances surrounding Cadet 1 CL Cudia's tardiness. Respondents add
that bad faith cannot likewise be imputed against Maj. Hindang by referring to the actions taken by Maj.
Jekyll Dulawan, the CTO of Cadets 1 CL Narciso and Arcangel who also arrived late for their next class.
Unlike the other cadets, Cadet 1 CL Cudia did not admit his being late and effectively evaded responsibility
by ascribing his tardiness to Dr. Costales.
As to the CHR' s finding that Cadet 1 CL Mogol was likewise "in bad faith and determined to destroy
[Cadet 1 CL] Cudia, for reasons of his own" because the former previously reported the latter for an honor
violation in November 2013, respondents argue that the bias ascribed against him is groundless as there is
failure to note that Cadet 1 CL Mogol was a non-voting member of the HC. Further, he cannot be faulted for
reporting a possible honor violation since he is the HC Chairman and nothing less is expected of him.
Respondents emphasize that the representatives of the HC are elected from each company, while the HC
Chairman is elected by secret ballot from the incoming first class representatives. Thus, if Cadet 1 CL
Cu'dia believed that there was bias against him, he should have resorted to the procedure for the removal of
HC members provided for in the Honor Code Handbook.
Finally, respondents declare that there is no reason or ill-motive on the part of the PMA to prevent Cadet 1
CL Cudia from graduating because the Academy does not stand to gain anything from his dismissal. On the
contrary, in view of his academic standing, the separation militates against PMA' s mission to produce
outstanding, honorable, and exceptional cadets.
The Court differs with petitioners.
Partiality, like fraudulent intent, can never be presumed. Absent some showing of actual bias, petitioners'
allegations do not hold water. The mere imputation of ill-motive without proof is speculative at best. Kolesa
teaches us that to sustain the challenge, specific evidence must be presented to overcome
a presumption of honesty and integrity in those serving as adjudicators; and it must convince that, under a
realistic appraisal of psychological tendencies and human weaknesses, conferring investigative and
adjudicative powers on the same individual poses such a risk of actual bias or prejudgment that the practice
must be forbidden if the guarantee of due process is to be implemented. 187
Although a CTO like Maj. Hindang must decide whether demerits are to be awarded, he is not an adversary
of the cadet but an educator who shares an identity of interest with the cadet, whom he counsels from time to
time as a future leader.188 When the occasion calls for it, cadets may be questioned as to the accuracy or
completeness of a submitted work. A particular point or issue may be clarified. In this case, the question
asked of Cadet 1 CL Cudia concerning his being late in class is proper, since there is evidence indicating
that a breach of regulation may have occurred and there is reasonable cause to believe that he was involved
in the breach of regulations.189
For lack of actual proof of bad faith or ill-motive, the Court shall rely on the non-toleration clause of the
Honor Code, i.e., "We do not tolerate those who violate the Code." Cadets are reminded that they are
charged with a tremendous duty far more superior to their personal feeling or friendship. 190 They must learn
to help others by guiding them to accept the truth and do what is right, rather than tolerating actions against
truth and justice.191 Likewise, cadets are presumed to be characteristically honorable; they cannot overlook
or arbitrarily ignore the dishonorable action of their peers, seniors, or subordinates.192 These are what Cadet
1 CL Mogol exactly did, although he was later proven to have erred in his accusation. Note that even the
Honor Code and Honor System Handbook recognizes that interpretation of one's honor is generally
subjective.193
Moreover, assuming, for the sake of argument, that Cadets 1 CL' Raguindin and Mogol as well as Brig. Gen.
Costales have an axe to grind against Cadet 1 CL Cudia and were bent on causing, no matter what, the
latter's downfall, their nefarious conduct would still be insignificant. This is so since the HC (both the
preliminary and formal investigation), the CRAB, and the Fact-Finding Board/Investigating Body are
collegial bodies. Hence, the claim that the proceedings/hearings conducted were merely a farce because the
three personalities participated therein is tantamount to implying the existence of a conspiracy, distrusting
the competence, independence, and integrity of the other members who constituted the majority. Again, in
the absence of specifics and substantial evidence, the Court cannot easily give credence to this baseless
insinuation.
As to the HC executive session/chambering –
Petitioners narrate that there was an irregular administrative hearing in the case of Cadet 1 CL Cudia
because two voting rounds took place. After the result of the secret balloting, Cadet 1 CL Mogol ordered the
voting members to go to a room without the cadet recorders. Therein, the lone dissenter, Cadet lCL Lagura,
was asked to explain his "not guilty" vote. Pressured to change his vote, he was made to cast a new one
finding Cadet 1 CL Cudia guilty. The original ballot was discarded and replaced. There was no record of the
change in vote from 8-1 to 9-0 that was mentioned in the HC formal report.
The Affidavit of Commander Junjie B. Tabuada executed on March 6, 2014 was submitted by petitioners
since he purportedly recalled Cadet 1 CL Lagura telling him that he was pressured to change his "not guilty"
vote after the voting members were "chambered." In the sworn statement, Commander Tabuada said:
1. That after CDT lCL CUDIA [was] convicted for honor violation, I [cannot] remember exactly
the date but sometime in the morning of 23rd or 24th of January 2014, I was in my office filling up
forms for the renewal of my passport, CDT 1CL LAGURA entered and had business with my
staff;
2. When he was about to leave I called him. "Lags, halika muna dito," and he approached me and I
let him sit down on the chair in front of my table. I told and asked him, "Talagang nadali si Cudia
ah ... ano ha ang nangyari? Mag-Tagalog or mag-Bisaya ka." He replied, "Talagang NOT GUILTY
ang vote ko sa kanya sir", and I asked him, "Oh, bakit naging guilty di ha pag may isang nag NOT
GUILTY, abswelto na? He replied "Chinamber ako sir, bale pinapa-justify kung bakit NOT
GUILTY vote ko, at na-pressure din ako sir kaya binago ko, sir." So, I told him, "Sayang sya,
matalino at mabait pa naman" and he replied "oo nga sir". After that conversation, I let him go. 194
It is claimed that the HC gravely abused its discretion when it committed voting manipulation since, under
the rules, it is required to have a unanimous nine (9) votes finding an accused cadet guilty. There is nothing
in the procedure that permits the HC Chairman to order the "chambering" of a member who voted contrary
to the majority and subjects him or her to reconsider in order to reflect a unanimous vote. Neither is there an
order from the Chief of Staff or the President sanctioning the HC procedure or approving any change therein
pursuant to Sections 30 and 31 of C.A. No. 1. The HC, the CRAB, and the PMA violated their own rules
290
and principles as embodied in the Honor Code. Being a clear deviation from the established procedures, the
second deliberation should be considered null and void.
Petitioners further contend that the requirement of unanimous vote involves a substantive right which cannot
be unceremoniously changed without a corresponding amendment/revision in the Honor Code and Honor
System Handbook. In their view, "chambering" totally defeats the purpose of voting by secret ballot as it
glaringly destroys the very essence and philosophy behind the provisions of the Honor System, which is to
ensure that the voting member is free to vote what is in his or her heart and mind and that no one can
pressure or persuade another to change his or her vote. They suggest that if one voting member acquits an
accused cadet who is obviously guilty of the offense, the solution is to remove him or her from the HC
through the vote of non-confidence as provided for in the Honor Code.195 Anent the above arguments,
respondents contend that a distinction must be made between the concepts of the Honor Code and the Honor
System. According to them, the former sets the standard for a cadet's, minimum ethical and moral behavior
and does not change, while the latter is a set of rules for the conduct of the observance and implementation
of the· Honor Code and may undergo necessary adjustments as may be warranted by the incumbent
members of the HC in order to be more responsive to the moral training and character development of the
cadets. The HC may provide guidelines when the Honor System can be used to supplement regulations. This
being so, the voting process is continuously subject to change.
Respondents note that, historically, a non-unanimous guilty verdict automatically acquits a cadet from the
charge of Honor violation. The voting members only write either "guilty" or "not guilty" in the voting sheets
without stating their name or their justification. However, this situation drew criticisms since there were
instances where a reported cadet already admitted his honor violation but was acquitted due to the lone vote
of a sympathetic voting member.
In the case of Cadet 1 CL Cudia, the HC adopted an existing practice that should the voting result in 7-2 or
8-1 the HC would automatically sanction a jury type of discussion called "executive session" or
"chambering," which is intended to elicit the explanation and insights of the voting member/s. This prevents
the tyranny of the minority or lone dissenter from prevailing over the manifest proof of guilt. The assailed
voting practice has been adopted and widely accepted by the PMA Siklab Diwa Class of 2014 since their
first year in the Academy. The allegations of conspiracy and sham trial are, therefore, negated by the fact
that such practice was in place and applied to all cases of honor violations, not solely to the case of Cadet
1CL Cudia.
It is emphasized by respondents that any decision to change vote rests solely on the personal conviction of
the dissenter/s, without any compulsion from the other voting members. There can also be no pressuring to
change one's vote to speak of since a vote may only be considered as final when the Presiding Officer has
affixed his signature.
To debunk Commander Tabuada's statements, respondents raise the argument that the Fact-Finding
Board/Investigating Body summoned Cadet 1 CL Lagura for inquiry. Aside from his oral testimony made
under oath, he submitted to the Board/Body an affidavit explaining that:
11. Sometime on 23rd or 24th of January 2014, I went to the Department of Naval Warfare to ask
permission if it is possible not to attend the Navy duty for the reason that I will be attending our baseball
game outside the Academy.
12. After I was permitted not to attend my Navy Duty and when I was about to exit out of the Office, CDR
JUNJIE B T ABU ADA PN, our Head Department Naval Warfare Officer, called my attention. I approached
him and he said: "Talagang nadali si Cudia ah. Ano ba talaga ang nangyari?" At first, I was hesitant to
answer because of the confidentiality of the Honor Committee proceedings. He again said: "Wag kang mag-
alala, atin, atin lang ito, alam ko naman na bawal magsabi." Then I answered: "Ako yung isang not guilty
Sir. Kaya [yung] Presiding Officer nagsabi na pumunta muna kami sa Chamber. Nung nasa chamber kami,
nagsalita [yung] mga nagvote ng Guilty tapos isa-isa nagsabi kung bakit ang boto nila Guilty. Nung
pakinggan ko, eh naliwanagan ako. Pinalitan ko yung boto ko from Not Guilty to Guilty Sir." He replied:
"Sayang si Cudia ano?" And I said: "Oo nga sir, [s]ayang si Cudia, mabait pa naman at matalino." 196
Cadet 1 CL Lagura restated the above in the Counter-Affidavit executed on March 12, 2014, which he
submitted before the CHR wherein he attested to the following:
3. I was chosen to be a voting member of the Honor Committee for Honor Code violation
committed by Cadet Cudia, for "lying". As a voting member, we are the one who assess or
investigate the case whether the reported Cadet is Guilty for his actions or not.
4. I was the only one who INITIALLY voted "NOT GUILTY" among the nine (9) voting members
of the Honor Committee in the case of Cdt Cudia for Lying.
5. I initially voted "NOT GUILTY" for the reason that after the proceedings and before the
presiding Officer told the members to vote, I was confused of the case of Cadet Cudia. I have
gathered some facts from the investigation to make my decision but for me it is not yet enough to
give my verdict of guilty to Cdt Cudia so I decided to vote "NOT GUILTY" with a reservation in
my mind that we will still be discussing our verdicts if we will arrive at 8-1 or 7-2. Thus, I can still
change my vote if I may be enlightened with the other's justifications.
6. After the votes were collected, the Presiding Officer told us that the vote is 8 for guilty and 1 for
not guilty. By way of practice and as I predicted, we were told to go inside the anteroom for
executive meeting and to discuss our respective justifications. I have been a member for two (2)
years and the voting committee will always go for executive meeting whenever it will meet 8-1 or
7-2 votes.
7. I listened to them and they listened to me, then I saw things that enlightened my confusions that
time. I gave a thumbs-up sign and asked for another sheet of voting paper. I then changed my vote
from "NOT GUILTY" to "GUILTY" and the voting members of the Honor Committee came up
with the final vote of nine (9) votes for guilty and zero (0) votes for not guilty.
9. Cdt Cudia was called inside the courtroom and told that the verdict was GUILTY of LYING.
After that, all persons inside the courtroom went back to barracks.
10. Right after I changed to sleeping uniform, I was approached by Cdt Jocson and Cdt Cudia,
inquiring and said: "Bakit ka naman nagpalit ng boto? ., I answered: "Nasa process yan, may mali
talaga sa rason mo." They also asked who were inside the Chamber and I mentioned only Cdt
Arlegui and Cdt Mogol. That was the last time that Cdt Cudia and Cdt Jocson talked to me.
291
11. Sometime on 23rd or 24th of January 2014, I went to the Department of Naval Warfare to
asked (sic) permission if it is possible not to attend the Navy duty for the reason that I will be
attending our baseball game outside the Academy.
12. After I was permitted not to attend my Navy Duty and when I was about to exit out of the
Office, CDR JUNJIE B TABUADA PN, our Head Department Naval Warfare Officer, called my
attention. I approached him and he said: "Talagang nadali si Cudia ah. Ano ba talaga ang
nangyari?" At first, I was hesitant to answer because of the confidentiality of the Honor Committee
proceedings. He again said: "Wag kang mag-alala, atin, atin lang ito, alam ko naman na bawal
magsabi. " Then I answered: "Ako yung isang not guilty Sir. Kaya [yung} Presiding Officer
nagsabi na pumunta muna kami sa Chamher. Nung nasa chamber kami, nagsalita [yung] mga
nagvote ng Guilty tapos isa-isa nagsabi kung bakit ang boto nila Guilty. Nung pakinggan ko, eh
naliwanagan aka. Pinalitan ko yung boto ko from Not Guilty to Guilty Sir. " He replied: "Sayang si
Cudia ano?" And I said: "Oo nga sir, [s]ayang si Cudia, mabait pa naman at matalino. " 197
Still not to be outdone, petitioners argue that the very fact that Cadet 1 CL Lagura, as the lone dissenter, was
made to explain in the presence of other HC members, who were in disagreement with him, gives a
semblance of intimidation, force, or pressure. For them, the records of the HC proceedings, which were not
presented assuming they actually exist, could have been the best way to ensure that he was free to express
his views, reject the opinion of the majority, and stick to his decision. Also, it was pointed out that Cadet 1
CL Lagura failed to clearly explain in his affidavit why he initially found Cadet 1 CL Cudia "not guilty" and
what made him change his mind. His use of general statements like he "was confused of the case " and "saw
things that enlightened my confusions " could hardly suffice to establish why he changed his vote. Finally,
petitioners note the admission of ·Cadet 1 CL Lagura during the CHR investigation that he was the only one
who was given another ballot sheet while in the chamber and that he accomplished it in the barracks which
he only submitted the following day. However, as the CHR found, the announcement of the 9-0 vote was
done immediately after the HC came out from the chamber and before Cadet 1 CL Lagura submitted his
accomplished ballot sheet.
We rule for respondents.
As to the manner of voting by the HC members, the Honor Code tersely provides:
After a thorough discussion and deliberation, the presiding member of the Board will call for the members
to vote whether the accused is GUILTY or NOT GUILTY. A unanimous vote (9 votes) of GUILTY decides
that a cadet is found guilty of violating the Honor Code.198
From the above-quoted provision, it readily appears that the HC practice of conducting "executive session"
or "chambering" is not at all prohibited. The HC is given leeway on the voting procedures in' actual cases
taking into account the exigency of the times. What is important is that, in the end, there must be a
unanimous nine votes in order to hold a cadet guilty of violating the Honor Code.
Granting, for argument's sake, that the HC violated its written procedure, 199 We still rule that there is nothing
inherently wrong with the practice of "chambering" considering that the presence of intimidation or force
cannot automatically be inferred therefrom. The essence of secret balloting and the freedom to vote based on
what is in the heart and mind of the voting member is not necessarily diluted by the fact that a second/final
voting was conducted. As explained by Cadet 1CL Mogol before the CRAB:
13. x x x [The] dissenting voter would have to explain his side and insights regarding the case at hand. The
other members, on the other hand, would be given the chance to explain their votes as well as their insights
to the dissenting voter. The decision to change the vote of the dissenting voter rests solely on his personal
conviction. Thus, if he [or she] opted not to change his/her vote despite the discussion, his [or her] vote is
accorded respect by the Honor Committee.200
It is elementary that intimidation or force is never presumed. Mere allegation is definitely not
evidence.1âwphi1 It must be substantiated and proved because a person is presumed to be innocent of a
crime or wrong and that official duty has been regularly performed. 201
The oral and written statements of Cadet 1 CL Lagura should settle the issue. Before the Fact-Finding
Board/Investigating Body and the CHR, he consistently denied that he was pressured by the other voting
members of the HC. His representation must be accepted as it is regardless of whether he has satisfactorily
elaborated his decision to change his vote. Being the one who was "chambered," he is more credible to
clarify the issue. In case of doubt, We have to rely on the faith that Cadet 1 CL Lagura observed the Honor
Code, which clearly states that every cadet must be his or her own Final' Authority in honor; that he or she
should not let other cadets dictate on him or her their sense of honor.202 Moreover, the Code implies that any
person can have confidence that a cadet and any graduate of the PMA will be fair and just in dealing with
him; that his actions, words and ways are sincere and true.203
As to the other alleged "irregularities" committed such as not putting on record the initial/first voting and
Cadet 1CL Lagura's bringing of his ballot sheet to and accomplishing it in the barracks, the Court shall no
longer dwell on the same for being harmless procedural errors that do not materially affect the validity of the
HC proceedings.
Cadet 1 CL Cudia 's alleged untruthful statements
Petitioners insist that Cadet 1 CL Cudia did not lie. According to them, there is no clear time reference as to
when was the actual dismissal or what was the exact time of dismissal - whether it should be the dismissal
inside the room or the dismissal after the section grade was given by Dr. Costales -in the minds of Cadet 1
CL Cudia, Maj. Hindang, and the HC investigators and voting members. They claim that during long
examinations, the time of dismissal was usually five minutes before the class was set to end and the protocol
of dismissing the class 15 minutes earlier was not observed. When Maj. Hindang stated in accusatory
language that Cadet 1 CL Cudia perverted the truth by stating that OR432 class ended at 1500H, he did not
state what was the true time of dismissal. He did not mention whether the truth he was relying on was 5 or
15 minutes before the scheduled end of class.
It is also averred that Cadet 1 CL Cudia's only business was to ask Dr. Costales a query such that his
business was already finished as soon as she gave an answer. However, a new business was initiated by Dr.
Costales, which is, Cadet 1 CL Cudia must stay and wait for the section grade. At that point in time, he was
no longer in control of the circumstances. Petitioners claim that Dr. Costales never categorically stated that
Cadet lCL Cudia was lying. She recognized the confusion. Her text messages to him clarified his alleged
violation. Also, the CHR noted during its investigation that she could not exactly recall what happened in
her class on November 14, 2013.
Furthermore, petitioners reasoned out that when respondents stated that ENG412 class started at 3:05 p.m., it
proves that Cadet 1 CL Cudia was obviously not late. If, as indicated in his Delinquency Report, he was late
292
two (2) minutes in his 1500-1600H class in ENG 412, he must have arrived 3:02 p.m. Respondents,
however, claim that the class started at 3:05 p.m. Thus, Cadet 1 CL Cudia was not late.
Relative to his explanation to the delinquency report, petitioners were of the view that what appears to have
caused confusion in the minds of respondents is just a matter of semantics; that the entire incident was a
product of inaccuracy, not lying. It is malicious for them to insinuate that Cadet 1 CL Cudia purposely used
incorrect language to hide the truth. Citing Merriam Webster's Dictionary, petitioners argue that "dismiss"
means to permit or cause to leave, while "class" refers to a body of students meeting regularly to study the
same subject. According to them, these two words do not have definite and precise meanings but are generic
terms. Other than the words "class" and "dismiss" used by Cadet 1 CL Cudia, which may actually be used in
their generic sense, there is nothing deceiving about what he said. Thus, the answer he chose might be
wrong or not correct, but it is not false or not true.
For petitioners, Cadet lCL Cudia's explanations are evidently truthful and with no intent to deceive or
mislead. He did not manipulate any fact and was truthful of his explanation. His .. statements were clear and
unambiguous but were given a narrow-minded interpretation. Even the Honor Code acknowledges that
"[e]xperience demonstrates that human communication is imperfect at best, and some actions are often
misinterpreted."
Lastly, petitioners contend that Cadet 1 CL Cudia's transcript of records reflects not only his outstanding
academic performance but proves his good conduct during his four-year stay in the Academy. He has above-
average grades in Conduct, with grades ranging from 96 to 100 in Conduct I to XI. His propensity to lie is,
therefore, far from the truth.
On the other hand, respondents were equally adamant to contend that Cadet 1 CL Cudia was obviously
quibbling, which, in the military parlance, is tantamount to lying. He fell short in telling a simple truth. He
lied by making untruthful statements in his written explanation. Respondents want Us to consider the
following:
First, their OR432 class was not dismissed late. During the formal investigation, Dr. Costales testified that a
class is dismissed as long as the instructor is not there and the bell has rung. In cases of lesson examinations
(LE), cadets are dismissed from the time they have answered their respective LEs. Here, as Cadet Cudia
stated in his Request for Reconsideration of Meted Punishment, "We had an LE that day (14 November
2013) in OR432 class. When the first bell rang (1455), I stood up, reviewed my paper and submitted it to my
instructor, Ms. Costales. xxx" Clearly, at the time Cadet Cudia submitted his papers, he was already
considered dismissed. Thus, he cannot claim that his [OR432] class ended at 3:00 in the afternoon (1500H)
or "a bit late."
Second, Cadet Cudia was in control of the circumstances leading to his tardiness. After submitting his paper,
Cadet Cudia is free to leave and attend his next class. However, he initiated a conversation with Dr. Costales
regarding their grades. He was not under instruction by Dr. Costales to stay beyond the period of her class.
Furthermore, during the investigation of the Fact-Finding Board/Investigating Body, Dr. Costales clarified
her statements in her written explanation. She explained that the "instruction to wait" is a response to Cadet
Cudia' s request and that it was not her initiated instruction. Clearly, there was no directive from Dr.
Costales for Cadet Cudia and the other cadets to stay. On the contrary, it was them who wanted to meet with
the instructor. Third, contrary to Cadet Cudia's explanation, his subsequent class, ENG412, did not exactly
start at 3:00 in the afternoon (1500H). In the informal review conducted by the HTG to check the findings of
the HC, Professor Berong confirmed that her English class started as scheduled (3:05 in the afternoon, or
1505H) and not earlier. Cadet 1 CL Barrawed, the acting class marcher of ENG412 also testified that their
class started as scheduled (3 :05 in the afternoon, or 1505) and not earlier. 204
Respondents were unimpressed with the excuse that Cadet 1 CL Cudia had no intention to mislead or
deceive but merely used wrong and unfitting words in his explanations. For them, considering his academic
standing, it is highly improbable that he used incorrect language to justify his mistake. Respondents'
arguments are tenable.
The issue of whether Cadet 1 CL Cudia committed lying is an issue of fact. Unfortunately for petitioners,
the Court, not being a trier of facts, cannot pass upon factual matters as it is not duty-bound to analyze and
weigh again the evidence considered in the proceedings below. Moreover, We reiterate the long standing
rule that factual findings of administrative tribunals are ordinarily accorded respect if not finality by the
Court. In this case, as shown in the previous discussions, there is no evidence that the findings of the
investigating and reviewing bodies below are not supported by evidence or vitiated by fraud, imposition or
collusion; that the procedure which led to the findings is irregular; that palpable errors were committed; or
that a grave abuse of discretion, arbitrariness, or capriciousness is manifest. With respect to the core issue of
whether lying is present in this case, all investigating and reviewing bodies are in consonance in holding that
Cadet 1 CL Cudia in truth and in fact lied.
For purposes of emphasis though, We shall supplement some points.
As succinctly worded, the Honor Code of the Cadet Corps Armed Forces of the Philippines (CCAFP) states:
"We, the Cadets, do not lie, cheat, steal, nor tolerate among us those who do. "
The First Tenet of the Honor-Code is "We do not lie. " Cadets violate the Honor Code by lying if they make
an oral or written statement which is contrary to what is true or use doubtful information with the intent to
deceive or mislead.205 It is expected that every cadet's word is accepted without challenge on its truthfulness;
that it is true without qualification; and that the cadets must answer directly, completely and truthfully even
though the answer may result in punitive action under the CCPB and CCAFPR. 206
To refresh, in his Explanation of Report dated December 8, 2013, Cadet 1 CL Cudia justified that: "I came
directly from OR432 Class. We were dismissed a bit late by our instructor Sir." Subsequently, in his Request
for Reconsideration of Meted Punishment to Maj. Leander, he reasoned out as follows:
I strongly believe that I am not in control of the circumstances, our 4th period class ended 1500H and our
5th period class, which is ENG412, started 1500H also. Immediately after 4t period class, I went to my next
class without any intention of being late Sir.207
In this case, the Court agrees with respondents that Cadet 1 CL Cudia committed quibbling; hence, he lied in
violation of the Honor Code.
Following an Honor Reference Handbook, the term "Quibbling" has been defined in one U.S. case as
follows:
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A person can easily create a false impression in the mind of his listener by cleverly wording what he says,
omitting relevant facts, or telling a partial truth. When he knowingly does so with the intent to deceive or
mislead, he is quibbling. Because it is an intentional deception, quibbling is a form of lying.208
The above definition can be applied in the instant case. Here, instead of directly and completely telling the
cause of his being late in the ENG412 class of Prof. Berong, Cadet 1 CL Cudia chose to omit relevant facts,
thereby, telling a half-truth.
The two elements that must be presented for a cadet to have committed an honor violation are:
1. The act and/or omission, and
2. The intent pertinent to it.
Intent does not only refer to the intent to violate the Honor Code, but intent to commit or omit the act
itself.209
The basic questions a cadet must always seek to answer unequivocally are:
1. Do I intend to deceive?
2. Do I intend to take undue advantage?
If a cadet can answer NO to BOTH questions, he or she is doing the honorable thing. 210
Intent, being a state of mind, is rarely susceptible of direct proof, but must ordinarily be inferred from the
facts, and therefore, can only be proved by unguarded expressions, conduct and circumstances
generally.211 In this case, Cadet 1 CL Cudia's intent to deceive is manifested from the very act of capitalizing
on the use of the words "dismiss" and "class." The truth of the matter is that the ordinary usage of these two
terms, in the context of an educational institution, does not correspond to what Cadet 1 CL Cudia is trying to
make it appear. In that sense, the words are not generic and have definite and precise meaning.
By no stretch of the imagination can Cadets 1 CL Cudia, Miranda, Arcangel, and Narciso already constitute
a "class." The Court cannot agree that such term includes "every transaction and communication a teacher
does with her students." Clearly, it does not take too much intelligence to conclude that Cadet 1 CL Cudia
should have been accurate by pinpointing who were with him when he was late in the next class. His
deceptive explanation is made more obvious when compared with what Cadets 1 CL Archangel and Narciso
wrote in their DR explanation, which was: "We approached our instructor after our class." 212
Further, it is unimportant whether the time of dismissal on November 14, 2013 was five or fifteen minutes
ahead of the scheduled end of class. Worth noting is that even Dr. Costales, who stood as a witness for
Cadet 1 CL Cudia, consistently admitted before the HC, the Fact-Finding Board/Investigating Body, and the
CHR that he was already dismissed when he passed his LE paper. 213 During the hearing of the Board/Body,
she also declared that she merely responded to his request to see the results of the UE 1 and that she had
reservations on the phrases "under my instruction" and "dismissed a bit late" used in his letter of explanation
to the HC. In addition, Dr. Costales manifested her view before the CHR that the act of Cadet 1 CL Cudia of
inquiring about his grade outside their classroom after he submitted his LE paper is not part of the class time
because the consultation, being cadet-initiated, is voluntary.214 Assuming, for the sake of argument, that a
new business was initiated by Dr. Costales when Cadet 1 CL Cudia was asked to stay and wait for the
section grade, still, this does not acquit him. Given such situation, a responsible cadet who is fully aware of
the time constraint has the last say, that is, to politely decline the invitation and immediately go to the next
class. This was not done by Cadet 1 CL Cudia. Thus, it cannot be said that he already lost control over the
circumstances.
It is apparent, therefore, that Cadet 1 CL Cudia cunningly chose words which led to confusion in the minds
of respondents and eventually commenced the HC inquiry. His case is not just a matter of semantics and a
product of plain and simple inaccuracy. There is manipulation of facts and presentation of untruthful
explanation constitutive of Honor Code violation.
Evidence of prior good conduct cannot clear Cadet 1 CL Cudia .. While his Transcript of Records (TOR)
may reflect not only his outstanding academic performance but his excellent grade in subjects on Conduct
during his four-year stay in the PMA,215 it does not necessarily follow that he is innocent of the offense
charged. It is enough to say that "evidence that one did or did not do a certain thing at one time is not
admissible to prove that he did or did not do the same or similar thing at another time." 216 While the TOR
may be received to prove his identity or habit as an exceptional PMA student, it does not show his specific
intent, plan, or scheme as cadet accused of committing a specific Honor Code violation.
Dismissal from the PMA as unjust and cruel punishment
Respondents insist that violation of the Honor Code warrants separation of the guilty cadet from the cadet
corps. Under the Cadet Corps Armed Forces of the Philippines Regulation (CCAFPR), a violation of the
Cadet Honor Code is considered Grave (Class 1) delinquency which merits a recommendation for a cadet's
dismissal from the PMA Superintendent. The same is likewise clear from the Honor Code and Honor
System Handbook. Cadet 1 CL Cudia is, therefore, presumed to know that the Honor Code does not
accommodate a gradation or degree of offenses. There is no difference between a little lie and a huge
falsehood. Respondents emphasize that the Honor Code has always been considered as an absolute yardstick
against which cadets have measured themselves ever since the PMA began and that the Honor Code and
System seek to assure that only those who are able to meet the high standards of integrity and honor are
produced by the PMA. As held in Andrews, it is constitutionally permissible for the military "to set and
enforce uncommonly high standards of conduct and ethics. " Thus, in violating the Honor Code, Cadet 1 CL
Cudia forfeits his privilege to graduate from the PMA.
On their part, petitioners concede that if it is proven that a cadet breached the Honor Code, the offense
warrants his or her dismissal since such a policy may be the only means to maintain and uphold the spirit of
integrity in the military.217 They maintain though that in Cadet 1 CL Cudia's case there is no need to
distinguish between a "little lie" and a "huge falsehood" since he did not lie at all. Absent any intent to
deceive and to take undue advantage, the penalty imposed on him is considered as unjust and cruel. Under
the circumstances obtaining in this case, the penalty of dismissal is not commensurate to the fact that he is a
graduating cadet with honors and what he allegedly committed does not amount to an academic deficiency
or an intentional and flagrant violation of the PMA non-academic rules and regulations. Citing Non,
petitioners argue that the penalty imposed must be proportionate to the offense. Further, lsabelo, Jr. is
squarely applicable to the facts of the case. Cadet 1 CL Cudia was deprived of his right to education, the
only means by which he may have a secure life and future.
294
Considering Our finding that Cadet 1 CL Cudia in truth and in fact lied and his acceptance that violation of
the Honor Code warrants the ultimate penalty of dismissal from the PMA, there is actually no more dispute
to resolve. Indeed, the sanction is clearly set forth and Cadet 1 CL Cudia, by contract, risked this when he
entered the Academy.218 We adopt the ruling in Andrews219 wherein it was held that, while the penalty is
severe, it is nevertheless reasonable and not arbitrary, and, therefore, not in violation of due process. It
quoted the disposition of the district court, thus:
The fact that a cadet will be separated from the Academy upon a finding that he has violated the Honor
Code is known to all cadets even prior to the beginning of their careers there. The finding of a Code
violation by hypothesis includes a finding of scienter on the part of the offender. While separation is
admittedly a drastic and tragic consequence of a cadet's transgression, it is not an unconstitutionally arbitrary
one, but rather a reasonable albeit severe method of preventing men who have suffered ethical lapses from
becoming career officers. That a policy of admonitions or lesser penalties for single violations might be
more compassionate --or even more effective in achieving the intended result --is quite immaterial to the
question of whether the harsher penalty violates due process. 220
Nature of the CHR Findings
Petitioners contend that the PMA turned a blind eye on the CHR's recommendations. The CHR, they note, is
a constitutional body mandated by the 1987 Constitution to investigate all forms of human rights violations
involving civil and political rights, and to conduct investigative monitoring of economic, social, and cultural
rights, particularly of vulnerable sectors of society. Further, it was contended that the results of CHR's
investigation and recommendations are so persuasive that this Court, on several occasions like in the cases
of Cruz v. Sec. of Environment & Natural Resources221 and Ang Ladlad LGBT Party v. Commission on
Elections,222 gave its findings serious consideration. It is not, therefore, too late for the Court to hear what an
independent and unbiased fact-finding body has to say on the case.
In opposition, respondents assert that Simon, Jr. v. Commission on Human Rights 223 ruled that the CHR is
merely a recommendatory body that is not empowered to arrive at a conclusive determination of any
controversy.
We are in accord with respondents.
The findings of fact and the conclusions of law of the CHR are merely recommendatory and, therefore, not
binding to this Court. The reason is that the CHR's constitutional mandate extends only to the investigation
of all forms of human rights violations involving civil and political rights. 224 As held in Cariño v.
Commission on Human Rights225and a number of subsequent cases,226 the CHR is only a fact-finding body,
not a court of justice or a quasi-judicial agency. It is not empowered to adjudicate claims on the merits or
settle actual case or controversies. The power to investigate is not the same as adjudication:
The most that may be conceded to the Commission in the way of adjudicative power is that it may
investigate, i.e., receive evidence and make findings of fact as regards claimed human rights violations
involving civil and political rights. But fact-finding is not adjudication, and cannot be likened to the judicial
function of a court of justice, or even a quasi-judicial agency or official. The function of receiving evidence
and ascertaining therefrom the facts of a controversy is not a judicial function, properly speaking. To be
considered such, the faculty of receiving evidence and making factual conclusions in a controversy must be
accompanied by the authority of applying the law to those factual conclusions to the end that the controversy
may be decided or determined authoritatively, finally and definitively, subject to such appeals or modes of WHEREFORE, the Petition is DENIED. The dismissal of Cadet First Class Aldrin Jeff P. Cudia from the
review as may be provided by law. This function, to repeat, the Commission does not have. Philippine Military Academy is hereby AFFIRMED. No costs.

xxxx SO ORDERED.

[i]t cannot try and decide cases (or hear and determine causes) as courts of justice, or even quasi-judicial
bodies do. To investigate is not to adjudicate or adjudge. Whether in the popular or the technical sense, these
terms have well understood and quite distinct meanings.

"Investigate, "commonly understood, means to examine, explore, inquire or delve or probe into, research on,
study. The dictionary definition of "investigate" is "to observe or study closely: inquire into systematically:
"to search or inquire into: x x x to subject to an official probe x x x: to conduct an official inquiry;" The
purpose of investigation, of course, is to discover, to find out, to learn, obtain information. Nowhere
included or intimated is the notion of settling, deciding or resolving a controversy involved in the facts
inquired into by application of the law to the facts established by the inquiry.

The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient inquiry or
observation. To trace or track; to search into; to examine and inquire into with care and accuracy; to find out
by careful inquisition; examination; the taking of evidence; a legal inquiry;" "to inquire; to make an
investigation," "investigation" being in turn described as "(a)n administrative function, the exercise of which
ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; xx x an inquiry, judicial or otherwise, for
the discovery and collection of facts concerning a certain matter or matters."

"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine,
resolve, rule on, settle. The dictionary defines the term as "to settle finally (the rights and duties of the
parties to a court case) on the merits of issues raised: xx to pass judgment on: settle judicially: x x x act as
judge." And "adjudge" means "to decide or rule upon as a judge or with judicial or quasi-judicial powers: xx
to award or grant judicially in a case of controversy x x x."

In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority.1âwphi1 To determine
finally. Synonymous with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially, to
decide, settle or decree, or to sentence or condemn. xx Implies a judicial determination of a fact, and the
entry of a judgment. "226

All told, petitioners are not entitled to moral and exemplary damages in accordance with Articles 19, 2217,
2219 and 2229 of the Civil Code. The dismissal of Cadet 1 CL Cudia from the PMA did not effectively
deprive him of a future. Cliche though it may sound, being a PMA graduate is not the "be-all and end-all" of
his existence. A cadet separated from the PMA may still continue to pursue military or civilian career
elsewhere without suffering the stigma attached to his or her dismissal. For one, as suggested by
respondents, DND-AFP Circular No. 13, dated July 15, 1991, on the enlistment and reenlistment in the APP
Regular Force, provides under Section 14 (b) thereof that priority shall be given to, among others, the ex-
PMA or PAFFFS cadets.227 If the positions open does not appeal to his interest for being way below the rank
he could have achieved as a PMA graduate, Cadet 1 CL Cudia could still practice other equally noble
profession or calling that is best suited to his credentials, competence, and potential. Definitely, nobody can
deprive him of that choice.

295
 EN BANC
G.R. No. 211833, April 07, 2015
FERDINAND R. VILLANUEVA, PRESIDING JUDGE, MCTC, COMPOSTELA-NEW BATAAN,
COMPOSTELA VALLEY PROVINCE, Petitioner, v. JUDICIAL AND BAR COUNCIL, Respondent.
DECISION
REYES, J.:
Presiding Judge Ferdinand R. Villanueva (petitioner) directly came to this Court via a Petition for
Prohibition, Mandamus, and Certiorari, and Declaratory Relief1 under Rules 65 and 63 of the Rules of
Court, respectively, with prayer for the issuance of a temporary restraining order and/or writ of preliminary
injunction, to assail the policy of the Judicial and Bar Council (JBC), requiring five years of service as
judges of first-level courts before they can qualify as applicant to second-level courts, on the ground that it is
unconstitutional, and was issued with grave abuse of discretion.chanRoblesvirtualLawlibrary
The Facts
The petitioner was appointed on September 18, 2012 as the Presiding Judge of the Municipal Circuit Trial
Court, Compostela-New Bataan, Poblacion, Compostela Valley Province, Region XI, which is a first-level
court. On September 27, 2013, he applied for the vacant position of Presiding Judge in the following
Regional Trial Courts (RTCs): Branch 31, Tagum City; Branch 13, Davao City; and Branch 6, Prosperidad,
Agusan Del Sur.
In a letter2 dated December 18, 2013, JBC's Office of Recruitment, Selection and Nomination, informed the
petitioner that he was not included in the list of candidates for the said stations. On the same date, the
petitioner sent a letter, through electronic mail, seeking reconsideration of his non-inclusion in the list of
considered applicants and protesting the inclusion of applicants who did not pass the prejudicature
examination.
The petitioner was informed by the JBC Executive Officer, through a letter3 dated February 3, 2014, that his
protest and reconsideration was duly noted by the JBC en banc. However, its decision not to include his
name in the list of applicants was upheld due to the JBC's long-standing policy of opening the chance for
promotion to second-level courts to, among others, incumbent judges who have served in their current
position for at least five years, and since the petitioner has been a judge only for more than a year, he was
excluded from the list. This caused the petitioner to take recourse to this Court.
In his petition, he argued that: (1) the Constitution already prescribed the qualifications of an RTC judge,
and the JBC could add no more; (2) the JBC's five-year requirement violates the equal protection and due
process clauses of the Constitution; and (3) the JBC's five-year requirement violates the constitutional
provision on Social Justice and Human Rights for Equal Opportunity of Employment. The petitioner also
asserted that the requirement of the Prejudicature Program mandated by Section 104 of Republic Act (R.A.)
No. 85575 should not be merely directory and should be fully implemented. He further alleged that he has all
the qualifications for the position prescribed by the Constitution and by Congress, since he has already
complied with the requirement of 10 years of practice of law.
In compliance with the Court's Resolution6 dated April 22, 2014, the JBC7 and the Office of the Solicitor
296
General (OSG)8separately submitted their Comments. Summing up the arguments of the JBC and the OSG,
they essentially stated that the petition is procedurally infirm and that the assailed policy does not violate the
equal protection and due process clauses. They posited that: (1) the writ of certiorari and prohibition cannot
issue to prevent the JBC from performing its principal function under the Constitution to recommend
appointees to the Judiciary because the JBC is not a tribunal exercising judicial or quasi-judicial function;
(2) the remedy of mandamus and declaratory relief will not lie because the petitioner has no clear legal right
that needs to be protected; (3) the equal protection clause is not violated because the classification of lower
court judges who have served at least five years and those who have served less than five years is valid as it
is performance and experience based; and (4) there is no violation of due process as the policy is merely
internal in nature.chanRoblesvirtualLawlibrary
The Issue
The crux of this petition is whether or not the policy of JBC requiring five years of service as judges of first-
level courts before they can qualify as applicant to second-level courts is constitutional.
Ruling of the Court
Procedural Issues:
Before resolving the substantive issues, the Court considers it necessary to first determine whether or not the
action for certiorari, prohibition and mandamus, and declaratory relief commenced by the petitioner was
proper.
One. The remedies of certiorari and prohibition are tenable. "The present Rules of Court uses two special
civil actions for determining and correcting grave abuse of discretion amounting to lack or excess of
jurisdiction. These are the special civil actions for certiorari and prohibition, and both are governed by Rule
65."9 As discussed in the case of Maria Carolina P. Araullo, etc., et al. v. Benigno Simeon C. Aquino III,
etc., et al.,10 this Court explained that:chanroblesvirtuallawlibrary
With respect to the Court, however, the remedies of certiorari and prohibition are necessarily broader in
scope and reach, and the writ of certiorari or prohibition may be issued to correct errors of jurisdiction
committed not only by a tribunal, corporation, board or officer exercising judicial, quasi-judicial or
ministerial functions but also to set right, undo and restrain any act of grave abuse of discretion amounting
to lack or excess of jurisdiction by any branch or instrumentality of the Government, even if the latter does
not exercise judicial, quasi-judicial or ministerial functions. This application is expressly authorized by the
text of the second paragraph of Section 1, supra.
Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues and to
review and/or prohibit or nullify the acts of legislative and executive officials. 11 (Citation omitted)
In this case, it is clear that the JBC does not fall within the scope of a tribunal, board, or officer exercising
judicial or quasi-judicial functions. In the process of selecting and screening applicants, the JBC neither
acted in any judicial or quasi-judicial capacity nor assumed unto itself any performance of judicial or quasi-
judicial prerogative. However, since the formulation of guidelines and criteria, including the policy that the
petitioner now assails, is necessary and incidental to the exercise of the JBC's constitutional mandate, a
determination must be made on whether the JBC has acted with grave abuse of discretion amounting to lack
or excess of jurisdiction in issuing and enforcing the said policy.
Besides, the Court can appropriately take cognizance of this case by virtue of the Court's power of
supervision over the JBC. Jurisprudence provides that the power of supervision is the power of oversight, or
the authority to see that subordinate officers perform their duties. It ensures that the laws and the rules
governing the conduct of a government entity are observed and complied with. Supervising officials see to it
that rules are followed, but they themselves do not lay down such rules, nor do they have the discretion to
modify or replace them. If the rules are not observed, they may order the work done or redone, but only to
conform to such rules. They may not prescribe their own manner of execution of the act. They have no
discretion on this matter except to see to it that the rules are followed.12
Following this definition, the supervisory authority of the Court over the JBC is to see to it that the JBC
complies with its own rules and procedures. Thus, when the policies of the JBC are being attacked, then the
Court, through its supervisory authority over the JBC, has the duty to inquire about the matter and ensure
that the JBC complies with its own rules.
Two. The remedy of mandamus cannot be availed of by the petitioner in assailing JBC's policy. The
petitioner insisted that mandamus is proper because his right was violated when he was not included in the
list of candidates for the RTC courts he applied for. He said that his non-inclusion in the list of candidates
for these stations has caused him direct injury.
It is essential to the issuance of a writ of mandamus that the applicant should have a clear legal right to the
thing demanded and it must be the imperative duty of the respondent to perform the act required. 13The
petitioner bears the burden to show that there is such a clear legal right to the performance of the act, and a
corresponding compelling duty on the part of the respondent to perform the act. The remedy of mandamus,
as an extraordinary writ, lies only to compel an officer to perform a ministerial duty, not a discretionary
one.14 Clearly, the use of discretion and the performance of a ministerial act are mutually exclusive.
The writ of mandamus does not issue to control or review the exercise of discretion or to compel a course of
conduct, which, it quickly seems to us, was what the petitioner would have the JBC do in his favor. The
function of the JBC to select and recommend nominees for vacant judicial positions is discretionary, not
ministerial. Moreso, the petitioner cannot claim any legal right to be included in the list of nominees for
judicial vacancies. Possession of the constitutional and statutory qualifications for appointment to the
judiciary may not be used to legally demand that one's name be included in the list of candidates for a
judicial vacancy. One's inclusion in the list of the candidates depends on the discretion of the JBC,
thus:chanroblesvirtuallawlibrary
The fact that an individual possesses the constitutional and statutory qualifications for appointment to the
Judiciary does not create an entitlement or expectation that his or her name be included in the list of
candidates for a judicial vacancy. By submitting an application or accepting a recommendation, one submits
to the authority of the JBC to subject the former to the search, screening, and selection process, and to use its
discretion in deciding whether or not one should be included in the list. Indeed, assuming that if one has the
legal right to be included in the list of candidates simply because he or she possesses the constitutional and
statutory qualifications, then the application process would then be reduced to a mere mechanical function
of the JBC; and the search, screening, and selection process would not only be unnecessary, but also
improper. However, this is clearly not the constitutional intent. One's inclusion in the list of candidates is
subject to the discretion of the JBC over the selection of nominees for a particular judicial post. Such
candidate's inclusion is not, therefore, a legally demandable right, but simply a privilege the conferment of
which is subject to the JBC's sound discretion.
Moreover, petitioner is essentially seeking a promotional appointment, that is, a promotion from a first-level
court to a second level court. There is no law, however, that grants him the right to a promotion to
second-level courts.15 (Emphasis in the original)
Clearly, to be included as an applicant to second-level judge is not properly compellable by mandamus
inasmuch as it involves the exercise of sound discretion by the JBC.
Three. The petition for declaratory relief is improper. "An action for declaratory relief should be filed by a
297
person interested under a deed, a will, a contract or other written instrument, and whose rights are affected
by a statute, an executive order, a regulation or an ordinance. The relief sought under this remedy includes
the interpretation and determination of the validity of the written instrument and the judicial declaration of
the parties' rights or duties thereunder."16 "[T]he purpose of the action is to secure an authoritative statement
of the rights and obligations of the parties under a statute, deed, contract, etc., for their guidance in its
enforcement or compliance and not to settle issues arising from its alleged breach." 17
In this case, the petition for declaratory relief did not involve an unsound policy. Rather, the petition
specifically sought a judicial declaration that the petitioner has the right to be included in the list of
applicants although he failed to meet JBC's five-year requirement policy. Again, the Court reiterates that no
person possesses a legal right under the Constitution to be included in the list of nominees for vacant judicial
positions. The opportunity of appointment to judicial office is a mere privilege, and not a judicially
enforceable right that may be properly claimed by any person. The inclusion in the list of candidates, which
is one of the incidents of such appointment, is not a right either. Thus, the petitioner cannot claim any right
that could have been affected by the assailed policy.
Furthermore, the instant petition must necessarily fail because this Court does not have original jurisdiction
over a petition for declaratory relief even if only questions of law are involved. 18 The special civil action of
declaratory relief falls under the exclusive jurisdiction of the appropriate RTC pursuant to Section 19 19 of
Batas Pambansa Blg. 129, as amended by R.A.No. 7691. 20
Therefore, by virtue of the Court's supervisory duty over the JBC and in the exercise of its expanded judicial
power, the Court assumes jurisdiction over the present petition. But in any event, even if the Court will set
aside procedural infirmities, the instant petition should still be dismissed.chanRoblesvirtualLawlibrary
Substantive Issues
As an offspring of the 1987 Constitution, the JBC is mandated to recommend appointees to the judiciary and
only those nominated by the JBC in a list officially transmitted to the President may be appointed by the
latter as justice or judge in the judiciary. Thus, the JBC is burdened with a great responsibility that is imbued
with public interest as it determines the men and women who will sit on the judicial bench. While the 1987
Constitution has provided the qualifications of members of the judiciary, this does not preclude the JBC
from having its own set of rules and procedures and providing policies to effectively ensure its mandate.
The functions of searching, screening, and selecting are necessary and incidental to the JBC's principal
function of choosing and recommending nominees for vacancies in the judiciary for appointment by the
President. However, the Constitution did not lay down in precise terms the process that the JBC shall follow
in determining applicants' qualifications. In carrying out its main function, the JBC has the authority to set
the standards/criteria in choosing its nominees for every vacancy in the judiciary, subject only to the
minimum qualifications required by the Constitution and law for every position. The search for these long
held qualities necessarily requires a degree of flexibility in order to determine who is most fit among the
applicants. Thus, the JBC has sufficient but not unbridled license to act in performing its duties.
JBC's ultimate goal is to recommend nominees and not simply to fill up judicial vacancies in order to
promote an effective and efficient administration of justice. Given this pragmatic situation, the JBC had to
establish a set of uniform criteria in order to ascertain whether an applicant meets the minimum
constitutional qualifications and possesses the qualities expected of him and his office. Thus, the adoption of
the five-year requirement policy applied by JBC to the petitioner's case is necessary and incidental to the
function conferred by the Constitution to the JBC.
Equal Protection
There is no question that JBC employs standards to have a rational basis to screen applicants who cannot be
all accommodated and appointed to a vacancy in the judiciary, to determine who is best qualified among the
applicants, and not to discriminate against any particular individual or class.
The equal protection clause of the Constitution does not require the universal application of the laws to all
persons or things without distinction; what it requires is simply equality among equals as determined
according to a valid classification. Hence, the Court has affirmed that if a law neither burdens a fundamental
right nor targets a suspect class, the classification stands as long as it bears a rational relationship to some
legitimate government end.21ChanRoblesVirtualawlibrary
"The equal protection clause, therefore, does not preclude classification of individuals who may be accorded
different treatment under the law as long as the classification is reasonable and not arbitrary."22 "The mere
fact that the legislative classification may result in actual inequality is not violative of the right to equal
protection, for every classification of persons or things for regulation by law produces inequality in some
degree, but the law is not thereby rendered invalid."23
That is the situation here. In issuing the assailed policy, the JBC merely exercised its discretion in
accordance with the constitutional requirement and its rules that a member of the Judiciary must be of
proven competence, integrity, probity and independence. 24"To ensure the fulfillment of these standards in
every member of the Judiciary, the JBC has been tasked to screen aspiring judges and justices, among
others, making certain that the nominees submitted to the President are all qualified and suitably best for
appointment. In this way, the appointing process itself is shielded from the possibility of extending judicial
appointment to the undeserving and mediocre and, more importantly, to the ineligible or disqualified."25
Consideration of experience by JBC as one factor in choosing recommended appointees does not constitute
a violation of the equal protection clause. The JBC does not discriminate when it employs number of years
of service to screen and differentiate applicants from the competition. The number of years of service
provides a relevant basis to determine proven competence which may be measured by experience, among
other factors. The difference in treatment between lower court judges who have served at least five years
and those who have served less than five years, on the other hand, was rationalized by JBC as
follows:chanroblesvirtuallawlibrary
Formulating policies which streamline the selection process falls squarely under the purview of the JBC. No
other constitutional body is bestowed with the mandate and competency to set criteria for applicants that
refer to the more general categories of probity, integrity and independence.
The assailed criterion or consideration for promotion to a second-level court, which is five years experience
as judge of a first-level court, is a direct adherence to the qualities prescribed by the Constitution. Placing a
premium on many years of judicial experience, the JBC is merely applying one of the stringent
constitutional standards requiring that a member of the judiciary be of "proven competence." In
determining competence, the JBC considers, among other qualifications, experience and performance.
Based on the JBC's collective judgment, those who have been judges of first-level courts for five (5) years
are better qualified for promotion to second-level courts. It deems length of experience as a judge as
indicative of conversance with the law and court procedure. Five years is considered as a sufficient span of
time for one to acquire professional skills for the next level court, declog the dockets, put in place improved
procedures and an efficient case management system, adjust to the work environment, and gain extensive
experience in the judicial process.
298
A five-year stint in the Judiciary can also provide evidence of the integrity, probity, and independence of
judges seeking promotion. To merit JBC's nomination for their promotion, they must have had a "record of,
and reputation for, honesty, integrity, incorruptibility, irreproachable conduct, and fidelity to sound moral
and ethical standards." Likewise, their decisions must be reflective of the soundness of their judgment,
courage, rectitude, cold neutrality and strength of character.
Hence, for the purpose of determining whether judges are worthy of promotion to the next level court, it
would be premature or difficult to assess their merit if they have had less than one year of service on the
bench.26 (Citations omitted and emphasis in the original)
At any rate, five years of service as a lower court judge is not the only factor that determines the selection of
candidates for RTC judge to be appointed by the President. Persons with this qualification are neither
automatically selected nor do they automatically become nominees. The applicants are chosen based on an
array of factors and are evaluated based on their individual merits. Thus, it cannot be said that the
questioned policy was arbitrary, capricious, or made without any basis.
Clearly, the classification created by the challenged policy satisfies the rational basis test. The foregoing
shows that substantial distinctions do exist between lower court judges with five year experience and those
with less than five years of experience, like the petitioner, and the classification enshrined in the assailed
policy is reasonable and relevant to its legitimate purpose. The Court, thus, rules that the questioned policy
does not infringe on the equal protection clause as it is based on reasonable classification intended to gauge
the proven competence of the applicants. Therefore, the said policy is valid and constitutional.
Due Process
The petitioner averred that the assailed policy violates procedural due process for lack of publication and
non-submission to the University of the Philippines Law Center Office of the National Administrative
Register (ONAR). The petitioner said that the assailed policy will affect all applying judges, thus, the said
policy should have been published.
Contrary to the petitioner's contention, the assailed JBC policy need not be filed in the ONAR because the
publication requirement in the ONAR is confined to issuances of administrative agencies under the
Executive branch of the government.27 Since the JBC is a body under the supervision of the Supreme
Court,28 it is not covered by the publication requirements of the Administrative Code.
Nevertheless, the assailed JBC policy requiring five years of service as judges of first-level courts before
they can qualify as applicants to second-level courts should have been published. As a general rule,
publication is indispensable in order that all statutes, including administrative rules that are intended to
enforce or implement existing laws, attain binding force and effect. There are, however, several exceptions
to the requirement of publication, such as interpretative regulations and those merely internal in nature,
which regulate only the personnel of the administrative agency and not the public. Neither is publication
required of the so-called letters of instructions issued by administrative superiors concerning the rules or
guidelines to be followed by their subordinates in the performance of their duties. 29
Here, the assailed JBC policy does not fall within the administrative rules and regulations exempted from
the publication requirement. The assailed policy involves a qualification standard by which the JBC shall
determine proven competence of an applicant. It is not an internal regulation, because if it were, it would
regulate and affect only the members of the JBC and their staff. Notably, the selection process involves a
call to lawyers who meet the qualifications in the Constitution and are willing to serve in the Judiciary to
apply to these vacant positions. Thus, it is but a natural consequence thereof that potential applicants be
informed of the requirements to the judicial positions, so that they would be able to prepare for and comply
with them.
The Court also noted the fact that in JBC-009, otherwise known as the Rules of the Judicial and Bar
Council, the JBC had put its criteria in writing and listed the guidelines in determining competence,
independence, integrity and probity. Section 1, Paragraph 1 of Rule 9 expressly provides that applicants for
the Court of Appeals and the Sandiganbayan, should, as a general rule, have at least five years of experience
as an RTC judge, thus:chanroblesvirtuallawlibrary
RULE 9 - SPECIAL GUIDELINES FOR NOMINATION TO A VACANCY IN THE COURT OF
APPEALS AND SANDIGANBAYAN
Section 1. Additional criteria for nomination to the Court of Appeals and the Sandiganbayan. - In addition
to the foregoing guidelines the Council should consider the following in evaluating the merits of applicants
for a vacancy in the Court of Appeals and Sandiganbayan:
1. As a general rule, he must have at least five years of experience as a judge of Regional Trial Court,
except when he has in his favor outstanding credentials, as evidenced by, inter alia, impressive scholastic or
educational record and performance in the Bar examinations, excellent reputation for honesty, integrity,
probity and independence of mind; at least very satisfactory performance rating for three (3) years preceding
the filing of his application for nomination; and excellent potentials for appellate judgeship.
x x x x (Emphasis ours)
The express declaration of these guidelines in JBC-009, which have been duly published on the website of
the JBC and in a newspaper of general circulation suggests that the JBC is aware that these are not mere
internal rules, but are rules implementing the Constitution that should be published. Thus, if the JBC were
so-minded to add special guidelines for determining competence of applicants for RTC judges, then it could
and should have amended its rules and published the same. This, the JBC did not do as JBC-009 and its
amendatory rule do not have special guidelines for applicants to the RTC.
Moreover, jurisprudence has held that rules implementing a statute should be published. Thus, by analogy,
publication is also required for the five-year requirement because it seeks to implement a constitutional
provision requiring proven competence from members of the judiciary.
Nonetheless, the JBC's failure to publish the assailed policy has not prejudiced the petitioner's private
interest. At the risk of being repetitive, the petitioner has no legal right to be included in the list of nominees
for judicial vacancies since the possession of the constitutional and statutory qualifications for appointment
to the Judiciary may not be used to legally demand that one's name be included in the list of candidates for a
judicial vacancy. One's inclusion in the shortlist is strictly within the discretion of the JBC. 30
As to the issue that the JBC failed or refused to implement the completion of the prejudicature program as a
requirement for appointment or promotion in the judiciary under R.A. No. 8557, this ground of the petition,
being unsubstantiated, was unfounded. Clearly, it cannot be said that JBC unlawfully neglects the
performance of a duty enjoined by law.
Finally, the petitioner argued but failed to establish that the assailed policy violates the constitutional
provision under social justice and human rights for equal opportunity of employment. The OSG
explained:chanroblesvirtuallawlibrary
299
[T]he questioned policy does not violate equality of employment opportunities. The constitutional provision
does not call for appointment to the Judiciary of all who might, for any number of reasons, wish to apply. As
with all professions, it is regulated by the State. The office of a judge is no ordinary office. It is imbued with
public interest and is central in the administration of justice x x x. Applicants who meet the constitutional
and legal qualifications must vie and withstand the competition and rigorous screening and selection
process. They must submit themselves to the selection criteria, processes and discretion of respondent JBC,
which has the constitutional mandate of screening and selecting candidates whose names will be in the list to
be submitted to the President. So long as a fair opportunity is available for all applicants who are evaluated
on the basis of their individual merits and abilities, the questioned policy cannot be struck down as
unconstitutional.31 (Citations omitted)
From the foregoing, it is apparent that the petitioner has not established a clear legal right to justify the
issuance of a preliminary injunction. The petitioner has merely filed an application with the JBC for the
position of RTC judge, and he has no clear legal right to be nominated for that office nor to be selected and
included in the list to be submitted to the President which is subject to the discretion of the JBC. The JBC
has the power to determine who shall be recommended to the judicial post. To be included in the list of
applicants is a privilege as one can only be chosen under existing criteria imposed by the JBC itself. As
such, prospective applicants, including the petitioner, cannot claim any demandable right to take part in it if
they fail to meet these criteria. Hence, in the absence of a clear legal right, the issuance of an injunctive writ
is not justified.
As the constitutional body granted with the power of searching for, screening, and selecting applicants
relative to recommending appointees to the Judiciary, the JBC has the authority to determine how best to
perform such constitutional mandate. Pursuant to this authority, the JBC issues various policies setting forth
the guidelines to be observed in the evaluation of applicants, and formulates rules and guidelines in order to
ensure that the rules are updated to respond to existing circumstances. Its discretion is freed from legislative,
executive or judicial intervention to ensure that the JBC is shielded from any outside pressure and improper
influence. Limiting qualified applicants in this case to those judges with five years of experience was an
exercise of discretion by the JBC. The potential applicants, however, should have been informed of the
requirements to the judicial positions, so that they could properly prepare for and comply with them. Hence,
unless there are good and compelling reasons to do so, the Court will refrain from interfering with the
exercise of JBC's powers, and will respect the initiative and independence inherent in the latter.cralawred
WHEREFORE, premises considered, the petition is DISMISSED. The Court, however, DIRECTS that
the Judicial and Bar Council comply with the publication requirement of (1) the assailed policy requiring
five years of experience as judges of first-level courts before they can qualify as applicant to the Regional
Trial Court, and (2) other special guidelines that the Judicial and Bar Council is or will be implementing.
SO ORDERED.chanroblesvirtuallawlibrary
 EN BANC the Constitution and obey the laws of the land. The Court in Francisco, Jr. v. The House of
Representatives,3 says it tritely "the Chief Justice is not above the law and neither is any other member of
G.R. No. 237428, May 11, 2018 this Court."4 All public officers whether in the Executive, Legislative or Judicial departments are bound to
follow the law. If public officer violates the law, he or she shall suffer punishment, sanctions and adverse
consequences. The obligatory force of the law is necessary because once we allow exceptions, concessions,
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY SOLICITOR GENERAL JOSE C. waiver, suspension or non application to those who do not want to follow the law, nobody else will obey the
CALIDA, Petitioner, v. MARIA LOURDES P. A. SERENO, Respondent.
law.

DECISION In this unprecedented case for quo warranto against the incumbent Chief Justice, the Republic entreats this
Court to declare Maria Lourdes P. A. Sereno (respondent) ineligible to hold the highest post in the Judiciary
TIJAM, J.: for failing to. regularly disclose her assets, liabilities and net worth as member of the career service prior to
her appointment as an Associate Justice, and later as Chief Justice, of the Supreme Court, in violation of the
Whoever walks in integrity and with moral character walks securely, but he who takes crooked way will Constitution, the Anti-Graft Law, and the Code of Conduct and Ethical Standards for Public Officials and
be discovered and punished. Employees. The Republic accordingly seeks the nullification of respondent's appointment, asserting that her
failure to file the required disclosures and her failure to submit the same to the Judicial and Bar Council
show that she is not possessed of "proven integrity" demanded of every aspirant to the Judiciary.
The Case
- The Holy Bible, Proverbs 10:9 (AMP)
Invoking the Court's original jurisdiction under Section 5(1), Article VIII of the Constitution in relation to
the special civil action under Rule 66 of the Rules of Court, the Republic of the Philippines (Republic),
Integrity has, at all times, been stressed to be one of the required qualifications of judge. It is not new
through the Office of the Solicitor General (OSG) filed the present Petition5 for the issuance of the
concept in the vocation of administering and dispensing justice. In the early 1600's, Francis Bacon,
extraordinary writ of quo warranto to declare as void respondent's appointment as Chief Justice of the
philosopher, statesman, and jurist, in his "Essay LVI: Of Judicature" said "[a]bove all things, integrity is the
Supreme Court and to oust and altogether exclude respondent therefrom.
Judge's portion and proper virtue." Neither is integrity complex concept necessitating esoteric philosophical
The Antecedents
disquisitions to be understood. Simply, it is qualification of being honest, truthful, and having steadfast
adherence to moral and ethical principles.1 Integrity connotes being consistent doing the right thing in
From November 1986 to June 1, 2006, or spanning period of 20 years, respondent served as member of the
accordance with the law and ethical standards everytime. Hence, every judicial officer in any society is
faculty of the University of the Philippines-College of Law (U.P. or U.P. College of Law), initially as
required to comply, not only with the laws and legislations, but with codes and canons of conduct and
temporary faculty member (from November 1986 to December 31, 1991) and thereafter, as permanent
ethical standards as well, without derogation. As Thomas Jefferson remarked, "it is of great importance to
faculty member until her resignation therefrom on June 1, 2006. 6 As regular faculty member, respondent
set resolution, never not to be shaken, never to tell an untruth. There is no vice so mean, so pitiful, so
was paid by the month by U.P.7
contemptible and he who permits himself to tell lie once, finds it much easier to do it second and third time,
till at length it becomes habitual, he tells lies without attending to it, and truths without the world's believing
Based on the records of the U.P. Human Resources Development Office (U.P. HRD0),8 respondent was on
him. This falsehood of the tongue leads to that of the heart and in time depraves all its good dispositions."
official leave from the U.P. College of Law for the following periods:
Mental dishonesty and moral mischief breed all that integrity is not.
June 1, 2000 - May 31, 2001
In our jurisdiction, one cannot be qualified to be member of the Judiciary, lacking such mandatory
requirement of "proven integrity". Inevitably, an appointee to the position of Chief Justice of the Supreme June 1, 2001 - May 31, 2002
Court must be the exemplar of honesty, probity and integrity. The purpose of this requirement is self-evident
as the Chief Justice heads the Judiciary and adjudicates cases as member of the Court that "has the last word November 1, 2003 - October 31, 2004
on what the law is."2 Together with other Justices, the Chief Justice also disciplines members of the Bar for
misconduct. The significance of probity and integrity as requirement for appointment to the Judiciary is June 1, 2004 - February 10, 2005
underscored by the fact that such qualifications are not explicitly required of the President, the Vice-
President or the Members of Congress under the Constitution. The Constitution, thus, demands in no November 1, 2004 - October 31, 2005
uncertain terms that the Chief Justice be the embodiment of moral and ethical principles. He or she must be
of unquestionable character, possessed of moral authority to demand obedience to the law and to impose February 11, 2005 - May 31, 2006
rule of conduct. Indeed, one who exacts compliance with the law and ethical standards should be their
foremost adherent. November 15, 2005 - May 31, 2006
No one is above the law and the Constitution, not even Chief Justice who took an oath to protect and defend

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While being employed at the U.P. College of Law, or from October 2003 to 2006, respondent was 1985,13 1990,14 1991,15 1993,16 1994,17 1995,18 1996,19 1997,20 and 2002,21 filed by respondent. On the other
concurrently employed as legal counsel of the Republic in two international arbitrations: (a) PIATCO v. hand, the records of the Central Records Division of the Office of the Ombudsman yields that there is no
Republic of the Philippines and MIAA; and (b) Fraport AG Frankfurt Airport Services Worldwide v. SALN filed by respondent for calendar years 1999 to 2009 except for the SALN ending December 1998
Republic of the Philippines (PIATCO cases).9 which was subscribed only in August 2003 and transmitted by the U.P. HRDO to the Ombudsman only on
December 16, 2003.22 Belatedly, in respondent's Ad Cautelam Manifestation/Submission, she attached copy
The Personal Data Sheet (PDS) accomplished under oath by respondent further details, among others, the of her SALN for 198923 which she supposedly sourced from the "filing cabinets" 24 or "drawers of
following engagements/services rendered by her for various government agencies: 10 U.P."25 Similarly, despite having been employed as legal counsel of various government agencies from 2003
to 2009, there is likewise no showing that she filed her SALNs for these years, except for the SALN ending
No. December 31, 2009 which was unsubscribed and filed before the Office of the Clerk of Court only on June
Position From To of Department/Agency Nature of work Supervisor 22, 2012.
Years
After having served as professor at the U.P. College of Law until 2006, and thereafter as practitioner in
Legal Counsel 1994 2008 14 Various agencies of Legal various Executive various outfits including as legal counsel for the Republic until 2009, the respondent submitted her
yrs. government Office of international Secretaries Alberto application for the position of Associate Justice of the Supreme Court in July 2010.
the President, Office of trade and Romulo, Eduardo
the Solicitor General, investment law Ermita and In support of her application as Associate Justice, respondent submitted to the Office of Recruitment
Manila International in WTO Leandro Mendoza, Selection and Nomination (ORSN) of the Judicial and Bar Council (JBC) her SALN for the year
Airport Authority, (Geneva), ICSID Chief Presidential 2006.26 This SALN for 2006 bears no stamp received by the U.P. HRDO and was signed on July 27,
Department of (Washington, Legal Counsel 2010.27According to respondent, the JBC considered her nomination for the position of Associate Justice as
Agriculture, DC). ICC-ICA Avelino Cruz and that of private practitioner and not as government employee.28 Only recently, in letter29 to the ORSN dated
Department of Trade (Singapore, Merceditas February 2, 2018, likewise attached to her Ad Cautelam Manifestation/Submission, respondent would
and Industry, WTO- Paris) and in Gutierrez; explain that such SALN was really intended to be her SALN as of July 27, 2010. 30 Respondent further
AFTA Commission, bilateral dispute Solicitor Generals explained during the Oral Arguments that she merely downloaded the SALN form and forgot to erase the
Philippine Coconut resolution Alfredo Benipayo, year "2006" printed thereon and that she was not required by the ORSN to submit subscribed SALN. 31
Authority mechanisms Antonio Nachura
and Agnes Thus, as the certifications executed by the U.P. HRDO, the Ombudsman and the ORSN of the JBC stand,
Devanadera, the only SALNs available on record and filed by respondent were those for the calendar years 1985, 1989,
MIAA General 1990, 1991, 1993, 1994, 1995, 1996, 1997, 1998, and 2002 or eleven (11) SALNs filed in her 20-year
Manager Alfonso government service in U.P. No SALNs were filed from 2003 to 2006 when she was employed as legal
Cusi, Sen. Edgardo counsel for the Republic. Neither was there SALN filed when she resigned from U.P. College of Law as of
Angara, Sec. June 1, 2006 and when she supposedly re-entered government service as of August 16, 2010.
Salvador
Escudero, In tabular form, respondent's inclusive years in government employment vis-a-vis the SALNs filed by her
Underseretary and available on record are as follows:
Thomas Aquino,
Amb. Lilia As faculty member of the U.P. College of
Bautista Law:

Deputy Commissioner on Legal and Acting Chairman SALN ought to be

Year SALN actually filed by respondent
Commissioner Human Rights (UP Administrative & Comm. filed
Diliman, Abelardo
Commonwealth Ave., Aportadera (TEL: SALN as of
QC, TEL:928-7098) 687-7571) November 1986 November 1986 SALN ending December 31, 1985
(entry SALN)
Incidentally, the U.P. HRDO certified that there was no record on respondent's 201 file of any permission to
engage in limited practice of profession.11 Her engagement as legal counsel for the Republic continued until -no record of SALN as November 1986
2009.12 (entry SALN)-
Despite having been employed at the U.P. College of Law from November 1986 to June 1, 2006, the record 1987 SALN ending -no record-
of the U.P. HRDO only contains the Statement of Assets, Liabilities and Net Worth (SALN) for

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 December 31, 1986 December 31, 2001

SALN ending SALN ending

1988 -no record- 2003 SALN ending December 31, 2002
December 31, 1987 December31, 2002

SALN ending SALN ending

1989 -no record- 2004 -no record-
December 31, 1988 December 31, 2003

SALN ending December 31, 1989 SALN ending

2005 -no record-
SALN ending (sourced by respondent from one of December 31, 2004
1990
December 31, 1989 the "filing cabinets" or "drawers" of
U.P.) SALN ending
2006 -no record-
December 31, 2005
SALN ending
1991 SALN ending December 31, 1990
December 31, 1990 SALN as of June 1, -no record of SALN as of June 1,
June 1, 2006
2006 (exit SALN) 2006 (exit SALN)
SALN ending
1992 SALN ending December 31, 1991
December 31, 1991 Alleged break in government service
from June 2, 2006 until August 15, 2009
SALN ending but was engaged legal counsel for the
1993 -no record-
December 31, 1992 Republic from June2, 2006 to 2009.

SALN ending SALN ending December 31, 2009

1994 SALN ending December 31, 1993
December 31, 1993 but filed with the Office of the Clerk
SALN as of August Court En Banc only on June 22, 2012
SALN ending August 16, 2010 16, 2010 (re-entry and unsubscribed
1995 SALN ending December 31, 1994
December 31, 1994 SALN)
-no record of SALN as August 16,
SALN ending 2010 (re-entry SALN)-
1996 SALN ending December 31, 1995
December 31, 1995
SALN ending SALN ending December 31, 2010
2011
SALN ending December 31, 2010 but unsubscribed
1997 SALN ending December 31, 1996
December 31, 1996
SALN ending
2012 SALN ending December 31, 2011
SALN ending December 31, 2011
1998 SALN ending December 31, 1997
December 31, 1997
A month after, or on August 13, 2010, respondent was appointed by then President Benigno C. Aquino III
SALN ending December 31, 1998 (President Aquino III) as Associate Justice, and on August 16, 2010, respondent took her oath of office as
SALN ending such.
1999 (filed with the Ombudsman on
December 31, 1998
December 16, 2003)
When the position of the Chief Justice was declared vacant in 2012, the JBC announced32 the opening for
SALN ending application and recommendation of the position of Chief Justice. During the 2012 deliberations for the
2000 -no record- position of the Chief Justice, the members of the JBC En Banc were Associate Justice Diosdado M. Peralta
December 31, 1999
(Justice Peralta) as Acting ex officio Chairman; Undersecretary Michael Frederick L. Musngi as ex
officio member vice Leila M. De Lima; Senator Francis Joseph G. Escudero and Representative Niel Tupas
SALN ending
2001 -no record- as ex officio members representing the Congress; Justice Regino C. Hermosisima Jr. as regular member
December 31, 2000
representing the retired Supreme Court Justices; Justice Aurora Santiago Lagman as regular member
representing the Private Sector; Atty. Maria Milagros N. Fernan-Cayosa as regular member representing the
2002 SALN ending -no record-
Integrated Bar of the Philippines; and Atty. Jose V. Mejia as regular member representing the academe. The

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JBC Executive Committee (Execom) was composed of the JBC Regular Members and assisted by the Office 1. Justice Arturo D. Brion has substantially complied
of the Executive Officer (OEO) headed by Atty. Annaliza S. Ty-Capacite (Atty. Capacite).
2. Justice Antonio Carpio has substantially complied
The JBC announcement was preceded by an En Banc meeting held on June 4, 2012 wherein the JBC agreed
to require the applicants for the Chief Justice position to submit, instead of the usual submission of the 3. Secretary Leila M. De Lima has substantially complied
SALNs for the last two years of public service, all previous SALNs up to December 31, 2011 for those in
government service.33 However, for the other judicial vacancies, the JBC required the submission of only 4. Chairperson Teresita J. Herbosa has complied
two SALNs.34 Accordingly, in the Announcement35 published on June 5, 2012, the JBC specifically directed
the candidates for the Chief Justice post to submit, in addition to the usual documentary requirements, the 5. Solicitor General Francis H. Jardeleza has complied
following:
(1) Sworn Statement of Assets, Liabilities, and Networth (SALN): 6. Justice Teresita J. Leonardo-De Castro has substantially complied

a. for those in the government: all previous SALNs (up to 31 December 2011)
b. for those from the private sector: SALN as of 31 December 2011
(2) Waiver in favor of the JBC of the confidentiality of local and foreign bank accounts under the Bank
Secrecy Law and Foreign Currency Deposits Act.36 (Emphasis ours)
The JBC announcement further provided that "applicants with incomplete or out-of-date documentary
requirements will not be interviewed or considered for nomination." 37
Nevertheless, the JBC En Banc subsequently agreed to extend the deadline for the filing of applications or
recommendations to July 2, 2012 and the submission of the other documentary requirements to July 17,
2012.38
On June 25, 2012, the JBC En Banc resolved not to require the incumbent Supreme Court Justices who are
candidates for the Chief Justice position to submit other documentary requirements, particularly the required
clearances. Instead, the JBC En Banc required the incumbent Justices to submit only the SALNs, bank
waiver, medical certificate, laboratory results and the PDS.
7. Dean Raul C. Pangalangan
The Executive Officer informed the Council that Dean Pangalangan lacks five (5) SALNs. She was
informed that he could not obtain them from the U.P., but he is trying to get from the Civil Service
Commission.
Justice Lagman moved that the SALNs of Dean Pangalangan be considered as substantial compliance.
8. Congressman Rufus B. Rodriguez
Justice Peralta said that as per the report, Congressman Rodriguez did not submit even one SALN. He
commented that he may not be interested although he accepted his nomination.
The Executive Officer informed the Council that he is abroad. He was notified through email, as his
secretary would not give his contact number.

On July 2, 2012, respondent accepted several nominations from the legal and the evangelical community for 9. Commissioner Rene V. Sarmiento has lacking SALNs
the position of Chief Justice and in support of her nomination, respondent submitted to the ORSN her
SALNs for the years 2009,39 2010,40 and 2011.41 Respondent also executed waiver of confidentiality42 of her 10. Justice Maria Lourdes P. A. Sereno
local and foreign bank accounts.43
The Executive Officer informed the Council that she had not submitted her SALNs for period of ten
On July 6, 2012, or even before the deadline of the submission of the documentary requirements on July 17, (10) years, that is, from 1986 to 2006.
2012, the JBC En Banc came up with long list of the candidates totaling twenty-two (22), respondent
included, and scheduled the public interview of said candidates on July 24-27, 2012.44 Senator Escudero mentioned that Justice Sereno was his professor at U.P. and that they were
required to submit SALNs during those years.
On July 20, 2012, the JBC in its Special En Banc Meeting,45 deliberated on the candidates for the position of
Chief Justice with incomplete documentary requirements. In particular, the JBC examined the list of 11. Judge Manuel OJ Siayngco has complied Atty. Cayosa mentioned that Judge Siayngco has to submit
candidates and their compliance with the required submission of SALNs. The minutes of the JBC certificate of exemption because judges are also required to comply with that requirement.
deliberation reveal as follows:
xxxx 12. Dean Amado D. Valdez has lacking requirements

The Executive Officer asked for clarification, particularly with respect to SALNs, whether five (5) SALNs 13. Justice Presbitero J. Velasco, Jr. has complied
would constitute substantial compliance if the candidate has been in the government service for twenty (20)
years. 14. Atty. Vicente R. Velasquez has lacking requirements

The Council examined the list with regard to the SALNs, particularly the candidates coming from the 15. Dean Cesar L. Villanueva has lacking requirements
government, and identified who among them would be considered to have substantially complied:

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16. Atty. Ronaldo B. Zamora has lacking SALNs and MCLE cert.
x x x.46 (Emphasis ours)
Because there were several candidates with incomplete documentary requirements, the JBC En Banc agreed
to again extend the deadline for the submission of the lacking requirements to July 23, 2012 and that the
determination of whether candidate has substantially complied with the requirements be delegated to the
Execom. It also appears that the JBC En Banc further agreed that the candidates who fail to complete the
requirements on said date are to be excluded from the list of candidates to be interviewed and considered for
nomination, unless they would be included if in the determination of the Execom he or she has substantially
complied.47
Thus, on July 20, 2012, the ORSN, through its then Chief Atty. Richard Pascual (Atty. Pascual), inquired as
to respondent's SALNs for the years 1995, 1996, 1997 and 1999.48 During the Congressional hearings on
impeachment, Atty. Pascual would later on testify that he asked respondent to submit her SALNs from 1996
to 2006, or spanning period of 10 years.49 During the Oral Arguments, respondent would maintain that Atty.
Pascual only required her to submit her SALNs from 1995-1999 and did not ask for her more recent SALNs.
Either way, the years requested from respondent are within the period (1986 to 2006) covered by her
employment with the U.P. College of Law.
In response, the respondent, in the afternoon of July 23, 2012, transmitted letter 50 of even date to the JBC,
which stated:
xxxx
As had noted in my Personal Data Sheet, after my resignation from government service in 2006, as professor
at the University of the Philippines, I became full-time private practitioner. Hence, when I was nominated
for the position of Associate Justice of the Supreme Court in 2010, my nomination was considered as that of
private practitioner, and not as government employee. Thus, the requirements imposed on me in connection
with the consideration of my name, were those imposed on nominees from the private sector, and my
earlier-terminated government service, did not control nor dominate the kind of requirements imposed on
me.
Considering that most of my government records in the academe are more than fifteen years old, it is
reasonable to consider it infeasible to retrieve all of those files.
In any case, the University of the Philippines has already cleared me of all academic/administrative
responsibilities, money and property accountabilities and from administrative charges as of 01 June 2006.
Since it is the ministerial duty of the Head of the Office to ensure that the SALNs of its personnel are
properly filed and accomplished (CSC Resolution No. 060231 dated 01 February 2006 and CSC
Memorandum Circular No. 10-2006 dated 17 April 2006), this clearance can be taken as an assurance that
my previous government employer considered the SALN requirements to have been met copy of the
Clearance dated 19 September 2011 issued by the University of the Philippine is hereby attached.
In the 05 June 2012 Announcement, the Judicial and Bar Council imposed the requirement of submitting all
previous SALNs for those in the government. As pointed out earlier, my service in government is not
continuous. The period of my private practice between my service in the University of the Philippines
ending in 2006 and my appointment to the Supreme Court in 2010 presents break in government service.
Hence, in compliance with the documentary requirements for my candidacy as Chief Justice, submitted only
the SALNs from end of 2009 up to 31 December 2011, since am considered to have been returned to public
office and rendered government service anew from the time of my appointment as Associate Justice on 16
304
August 2010.
Considering that have been previously cleared from all administrative responsibilities and accountabilities
from my entire earlier truncated government service, may kindly request that the requirements that need to
comply with, be similarly viewed as that from private sector, before my appointment to the Government
again 2010 as Associate Justice of the Supreme Court.
x x x x51
The letter dated July 23, 2012 was received by the Office of the Administrative and Financial Services
(OAFS) and copies thereof were received by the offices of the JBC regular members, the ORSN and the
OEO.52 The letter, however, was neither examined by the JBC regular members nor was it deliberated upon
either by the JBC En Banc or the Execom.53 Although the determination of whether candidate has
substantially complied with the documentary requirements was delegated to the Execom, the latter could not
produce any minutes of the meeting or record that the members thereof deliberated on the July 23, 2012
letter of respondent.54
On the scheduled date of the interview on July 24, 2012, despite respondent's submission of only SALNs,
Atty. Pascual prepared Report Re: Documentary Requirements and SALN of candidates for the Position of
Chief Justice of the Philippines55 wherein respondent was listed as applicant No. 14 with an opposite
annotation that she had "COMPLETE REQUIREMENTS" and note stating "Letter 7/23/12 considering that
her government records in the academe are more than 15 years old, it is reasonable to consider it infeasible
to retrieve all those files."
The JBC then proceeded to interview the candidates, including respondent who was interviewed on July 27,
2012. On August 6, 2012, the ORSN prepared list of the 20 candidates, respondent included, vis-a-vis their
SALN submissions. Opposite respondent's name was an enumeration of the SALNs she submitted, i.e.,
2009, 2010 and 2011 and an excerpt from her July 23, 2012 letter that "considering that [respondent's]
government records in the academe are more than 15 years old, it is reasonable to consider it infeasible to
retrieve all those files." On August 13, 2012, the JBC voted on who would be included in the short list and
on the same day, transmitted to the President its nominations56 for the position of Chief Justice, as follows:
1. Carpio, Antonio T.
2. Abad, Roberto A.
3. Brion, Arturo D.
4. Jardeleza, Francis H.
5. Sereno, Maria Lourdes P.A.
6. Zamora, Ronalda B.
7. Leonardo-De Castro, Teresita J.
8. Villanueva, Cesar L.
A month after respondent's acceptance of her nomination, or on August 24, 2012, respondent was appointed
by then President Aquino III as Chief Justice of the Supreme Court.
On August 30, 2017, or five years after respondent's appointment as Chief Justice, an impeachment
complaint was filed by Atty. Larry Gadon (Atty. Gadon) against respondent with the Committee on Justice
of the House of Representatives (House Committee on Justice) for culpable violation of the Constitution,
corruption, high crimes, and betrayal of public trust. The complaint also alleged that respondent failed to
make truthful declarations in her SALNs.
The impeachment complaint was endorsed by several members of the House and, thereafter, was found to
be sufficient in form and substance. The respondent filed her answer to the impeachment complaint. After
the filing of the reply and the rejoinder, the House Committee on Justice conducted several hearings on the
determination of probable cause, the last of which was held on February 27, 2018. 57
During these hearings, it was revealed that respondent purportedly failed to file her SALNs while she was
member of the faculty of the U.P. College of Law and that she filed her SALN only for the years 1998, 2002
and 2006. During the hearing on February 7, 2018 of the House Committee on Justice, Justice Peralta, as
resource person being then the acting ex officio Chairman of the JBC, further claimed that during the JBC
deliberations in 2012, he was not made aware that respondent submitted incomplete SALNs nor that
respondent's letter dated July 23, 2012 to the JBC was ever deliberated upon. 58 This was confirmed by Atty.
Fernan-Cayosa;59 by Atty. Capacite, who emphasized that based on the rubber stamp received, only the
offices of the JBC regular members, the ORSN and the OEO were furnished copies of the letter; 60 and by
Atty. Pascual on the basis of the transmittal-letter.61
The foregoing sworn declarations made during the hearings before the House Committee on Justice
spawned two relevant incidents: one, the proposal of the House Committee for this Court to investigate on
the proceedings of the JBC relative to the nomination of respondent as Chief Justice which is now presently
docketed as A.M. No. 17-11-12 and A.M. No. 17-11-17-SC; and two, the Letter62 dated February 21, 2018
of Atty. Eligio Mallari to the OSG requesting that the latter, in representation of the Republic, initiate quo
warranto proceeding against respondent.
Thus, the present petition.
The Case for the Republic
The Republic, through the OSG, claims that an action for quo warranto is the proper remedy to question the
validity of respondent's appointment. It alleges that the instant petition is seasonably filed within the one-
year reglementary period under Section 11, Rule 66, 63 of the Rules of Court since respondent's
transgressions only came to light during the proceedings of the House Committee on Justice on the
allegations of the impeachment complaint filed against her. Alternatively, the Republic claims that it has an
imprescriptible right to bring quo warranto petition under the maxim nullum tempus occurit regi.
In justifying resort to petition for quo warranto, the Republic argues that quo warranto is available as
remedy even as against impeachable officers, like respondent. The Republic argues that petition for quo
warranto is different from the impeachment proceedings because the writ of quo warranto is being sought
to question the validity of her appointment, while the impeachment complaint accuses her of committing
culpable violation of the Constitution and betrayal of public trust while in office. 64 Citing the 2010 Rules of
the Presidential Electoral Tribunal (PET) and the cases of Funa v. Chairman Villar65 and Nacionalista Party
v. De Vera,66 the Republic argues that quo warranto may be resorted to even against impeachable officers
and that the respondent's assumption of the position as Chief Justice under the color of an executive
appointment is public wrong correctible by quo warranto.
The Republic seeks to oust respondent from her position as Chief Justice on the ground that the latter failed
to show that she is person of proven integrity which is an indispensable qualification for membership in the
305
Judiciary under Section 7(3),67 Article VIII of the Constitution. According to the Republic, because
respondent failed to fulfill the JBC requirement of filing the complete SALNs, her integrity remains
unproven. The Republic posits that the JBC's ostensible nomination of respondent does not extinguish the
fact that the latter failed to comply with the SALN requirement as the filing thereof remains to be
constitutional and statutory requirement.68
In sum, the Republic contends that respondent's failure to submit her SALNs as required by the JBC
disqualifies her, at the outset, from being candidate for the position of Chief Justice. Lacking her SALNs,
respondent has not proven her integrity which is requirement under the Constitution. The Republic thus
concludes that since respondent is ineligible for the position of Chief Justice for lack of proven integrity, she
has no right to hold office and may therefore be ousted via quo warranto.
The Case for the Respondent
Being circumspect in the examination of every pleading and document on record, this Court observes that,
initially, the Comment Ad Cautelam dated March 16, 2018 filed before Us was neither signed by the
respondent herself nor verified to have been read by her and attested by her that the allegations therein are
true and correct of her personal knowledge or based on authentic records. This Court is not unaware that
under the Rules of Court, specifically Section 4, Rule 7, not all pleadings need to be under oath, verified, or
accompanied by an affidavit. In fact, the rules on quo warranto do not require the filing of such comment,
but pursuant to the dictates of the fundamental right of due process and also the desire of this Court to
dispose of this case judiciously, impartially, and objectively, this Court gave the respondent the opportunity
to be heard and oppose the allegations in the petition by requiring her to file comment thereto. Thus, this
Court anticipated response from the respondent to take such opportunity to settle the uncertainty of her
nomination and appointment through her comment to the petition. What was received by this Court,
however, was an unverified Comment repudiating the Court's jurisdiction, merely signed by counsel, who
appeared to be representing the respondent.
Wary of the legal implications of such unverified pleading, i.e. possible refutation of the allegations stated
therein and repudiation of the signing counsel's authority to represent, this Court in its April 3, 2018
Resolution69 set as condition for the conduct of Oral Arguments prayed for by respondent, that the latter
affirm and verify under oath the truth and veracity of the allegations in the Comment Ad Cautelam filed by
counsel supposedly on her behalf.
In an Ad Cautelam Partial Compliance/Manifestation dated April 5, 2018, respondent affirmed and verified
under oath the truth and veracity of the allegations in the said Comment Ad Cautelam through Verification
dated April 6, 2018 attached therein.
In the said Comment Ad Cautelam, respondent argues that, on the strength of Section 2,70 Article XI of the
1987 Constitution and the cases of Mayor Lecaroz v. Sandiganbayan,71Cuenco v. Hon. Fernan,72In Re: First
Indorsement from Hon. Gonzales,73 and Re: Complaint-Affidavit for Disbarment Against Senior Associate
Justice Antonio T. Carpio,74 the Chief Justice may be ousted from office only by impeachment. Respondent
contends that the use of the phrase "may be removed from office" in Section 2, Article XI of the
Constitution does not signify that Members of the Supreme Court may be removed through modes other
than impeachment. According to respondent, the clear intention of the framers of the Constitution was to
create an exclusive category of public officers who can be removed only by impeachment and not otherwise.
It is likewise the argument of respondent that since petition for quo warranto may be filed before the RTC,
such would result to conundrum because judge of lower court would have effectively exercised disciplinary
power and administrative supervision over an official of the Judiciary much higher in rank and is contrary to
Sections and 11, Article VIII of the Constitution which vests upon the Supreme Court disciplinary and
administrative power over all courts and the personnel thereof. She theorizes that if Member of the Supreme
Court can be ousted through quo warranto initiated by the OSG, the Congress' "check" on the Supreme
Court through impeachment would be rendered inutile.
Respondent argues that the present petition is time-barred as Section 11, Rule 66 provides that petition
for quo warranto must be filed within one (1) year from the "cause of ouster" and not from the "discovery"
of the disqualification. Respondent contends that the supposed "failure" to file the required SALNs allegedly
took place for several years from 1986 to 2006, thus, the "cause of ouster" existed even before the
respondent was appointed as Chief Justice on August 24, 2012. Therefore, as early as her appointment, the
Republic, through the OSG, already had cause of action to seek her ouster. Even assuming that the one-year
prescriptive period may be counted from the Republic's "discovery" of the disqualification, the petition
would still be time-barred since the Republic would have made such "discovery" through U.P., considering
that the U.P. HRDO is required to submit list of employees who failed to file their SALNs.
Respondent avers that the Court cannot presume that she failed to file her SALNs because as public officer,
she enjoys the presumption that her appointment to office was regular. According to respondent, the
Republic failed to overcome this presumption as the documents relied upon by it, i.e., certifications from the
U.P. HRDO and the Ombudsman, do not categorically state that respondent failed to file her SALNs. On the
contrary, respondent points out that the U.P. HRDO had certified that she had been cleared of all
administrative responsibilities and charges as of June 1, 2006 and that there was no pending administrative
charge against her.
It is likewise the contention of respondent that public officers without pay or those who do not receive
compensation are not required to file SALN. Thus, respondent argues that for the periods that she was on
official leave without pay, she was actually not required to file any SALN for the inclusive years. She adds
that to require the submission of SALNs as an absolute requirement is to expand the qualifications provided
for under the Constitution.
Nonetheless, respondent represents that she continues to recover and retrieve her missing SALNs and will
present them before the Senate sitting as the Impeachment Tribunal and not to this Court considering her
objections to the latter's exercise of jurisdiction.
Respondent also stresses that the failure to file SALNs or to submit the same to the JBC has no bearing on
one's integrity. The submission of SALNs was simply among the additional documents which the JBC had
required of the applicants for the position of Chief Justice. It is respondent's position that the non-filing of
SALN is not ground for disqualification unless the same was already the subject of pending criminal or
administrative case or if the applicant had already been finally convicted for criminal offense involving said
failure to file SALNs. In this case, respondent points out that the JBC was made aware as early as July 20,
2012 that respondent had not submitted to the JBC her SALNs as U.P. professor and yet none of them
invoked Section 2, Rule 10 of JBC-009 or the "integrity rule."
Respondent likewise contends that the issue of whether an applicant for the position of Chief Justice is
person of "proven integrity" is question "constitutionally committed to the JBC" and is therefore political
question which only the JBC could answer, and it did so in the affirmative when it included respondent's
name in the shortlist of nominees for the position of Chief Justice.
The Republic's Reply
In refuting respondent's arguments, the Republic justifies its resort to the unconventional method of quo
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warranto. The Republic cites the cases of Estrada v. Desierto75 and Lawyers League for Better Philippines
and/or Oliver Lozano v. President Corazon Aquino et al. 76 where this Court took cognizance of petition
for quo warranto to oust an impeachable official. It reiterates its argument that it seeks respondent's ouster,
not on account of commission of impeachable offenses, but because of her ineligibility to assume the
position of Chief Justice.
The Republic maintains that the phrase "may be removed from office" in Section 2, Article XI of the
Constitution means that Members of the Supreme Court may be removed through modes other than
impeachment and disagrees with respondent's interpretation that the word "may" qualifies only the penalty
imposable after the impeachment trial, i.e., removal from office. The Republic claims that respondent's
interpretation would lead to an absurd situation in the event that the Senate imposes lesser penalty, like
suspension of the President, which would result in vacancy in the position not intended by the Constitution.
This is because vacancy in the Office of the President occurs only in case of death, permanent disability,
removal from office, or resignation, in which event the Vice-President shall become the President to serve
the unexpired term.
Invoking the verba legis principle in statutory construction, the Republic claims that Section 2, Article XI of
the Constitution does not expressly prohibit resort to other means to remove impeachable officers in
position.
Contrary to respondent's claim that this Court has no disciplinary authority over its incumbent members, the
Republic cites Section 13 of A.M. No. 10-4-20-SC which created permanent Committee on Ethics and
Ethical Standards, tasked to investigate complaints involving graft and corruption and ethical violations
against members of the Supreme Court. The Republic points out that such Ethics Committee conducted the
investigation in A.M. No. 10-7-17-SC77 and A.M. No. 09-2-19-SC.78
Meanwhile, in support of its claim that the petition is not time-barred, the Republic explains that the State
has continuous interest in ensuring that those who partake of its sovereign powers are qualified. It argues
that the one-year period provided under Section 11 of Rule 66 merely applies to individuals who are
claiming rights to public office, and not to the State. To consider the instant petition as time-barred, the
Republic argues, is to force the State to spend its resources in favor of an unqualified person.
Further, the Republic claims that even if it be assumed that the one year period applies against the State, it
cannot be deemed to have been notified of respondent's failure to file her SALNs. It argues that it has no
statutory obligation to monitor compliance of government employees other than its own. It alleges that
SALNs are not published, hence it has no feasible way of taking cognizance of respondent's failure to file
SALN.
In any case, the Republic claims that the unique circumstances of the instant case behoove this Court to be
liberal in interpreting the one-year reglementary period.
As to the question on jurisdiction, the Republic contends that the Supreme Court is clothed with the
authority to determine respondent's qualifications and eligibility to hold the position of the Chief Justice. It
argues that the determination of this issue is not political question because such issue may be resolved
through the interpretation of the pertinent provisions of the Constitution, laws, JBC rules, and Canons of
Judicial Ethics.
Going to the fundamental issue of respondent's eligibility to hold the position of Chief Justice, the Republic
reiterates that respondent failed to comply with the requirement of submitting SALNs and thus has failed to
prove her integrity. Further, the Republic cites respondent's gross misrepresentation in stating that her reason
for non-submission of SALNs was because she could no longer retrieve all of such SALNs. According to
the Republic, respondent's allegation seems to imply that she did file her SALNs when the Certifications
from the U.P. and the Ombudsman state otherwise.
The Republic posits that respondent's lack of integrity is further bolstered by her failure to disclose to the
JBC that she failed to file her SALN 11 times during her tenure as U.P. Law Professor.
Integrity, the Republic claims, is simply faithful adherence to the law, and the filing of SALN is
qualification implied from the requirement of integrity. The filing of SALN is not an additional requirement
unduly imposed on applicants to positions in the Judiciary. When respondent failed to file her SALN, she
did not comply with the Constitution, laws and appropriate codes of conduct. There is no need to allege or
prove graft and corruption in order to prove an aspiring magistrate's lack of integrity.
Finally, the Republic contends that the presumption of regularity cannot be applied in respondent's favor.
The Republic claims that such presumption attaches only to official acts and not to all acts of officials. The
presumption, according to the Republic, applies only to official acts specified by law as an official duty or to
function attached to public position. In this case, the filing of SALN is neither an official duty nor function
attached to position of U.P. College of Law Professor. In any case, the Republic claims that it has
successfully disputed such presumption through the Certifications it presented from U.P. and the
Ombudsman.
The Republic's Memorandum
In addition to the arguments put forth by the Republic in the Petition and the Reply, the Republic further
justified its non-inclusion of the JBC in the instant petition. It contends that since the petition only disputes
the respondent's eligibility to become the Chief Justice, the Solicitor General correctly instituted the quo
warranto petition only against respondent.
Insisting on respondent's lack of integrity, the Republic argues that respondent had the legal obligation to
disclose to the JBC that she failed to file her SALNs at least 11 times, citing the case of OCA v. Judge
Estacion Jr.79
The Republic also argues that respondent's claim of good faith is not defense. Republic Act (R.A.) No.
301980 and R.A. No. 671381 are special laws and are thus governed by the concept of malum prohibitum,
wherein malice or criminal intent is completely immaterial. Thus, her act of blaming the Review and
Compliance Committee of U.P. for its failure to inform her that she had no SALNs on file does not
exonerate her. The Republic further notes that respondent resorted to the fallacy of tu quoque a diversionary
tactic by using the fault of others to justify one's own fault.
Believing in the strength of its case, the Republic underscores its contention that the respondent was not able
to dispute the evidence put forth by the Republic that she failed to religiously file her SALNs throughout her
entire stint in the government. The Republic claims that it is futile for respondent to merely allege during the
Oral Arguments that she filed her SALNs and will produce them before the Senate. Respondent's admissions
during the Oral Arguments, together with the U.P. HRDO's certification, prove that she did not religiously
file her SALNs as required by law.
As to the applicability of this Court's ruling in Concerned Taxpayer v. Doblada, Jr.,82 the Republic argues
that the case is not on all fours with the instant petition. The Doblada ruling, according to the OSG, did not
involve issues on qualifications to public office unlike the present petition. Second, unlike in Doblada,
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respondent in this case failed to offer any countervailing evidence to disprove the Certifications by the U.P.
HRDO and the Ombudsman. Lastly, the statement in Doblada relied upon by the respondent is mere dictum.
The issue therein is centered on Doblada's unexplained wealth. Furthermore, Dobladawas decided only in
2005 or after respondent violated the legal requirement on the filing of SALNs.
The Respondent's Memorandum
Respondent insists that she can be removed from office only through impeachment. In addition to the
arguments raised in her Comment Ad Cautelam, respondent asserts that impeachment was chosen as the
method of removing certain high-ranking government officers to shield them from harassment suits that will
prevent them from performing their functions which are vital to the continued operations of government.
Such purpose, according to respondent, would be defeated if Section 2, Article XI of the Constitution would
not be construed as providing an exclusive means for the removal of impeachable officers. Respondent
argues that it would be absurd for the framers of the Constitution to provide very cumbersome process for
removing said officers only to allow less difficult means to achieve the same purpose.
Respondent contends that the Republic, in citing the 2010 PET Rules and the cases of Estrada v.
Desierto83 and Lawyers League for Better Philippines and/or Oliver Lozano v. President Corazon Aquino et
al.,84 erroneously lumps together the Chief Justice, the President and the Vice-President, simply because
they are all impeachable officers. Respondent argues that there are substantial distinctions between the
President and Vice-President on the one hand, and Members of the Supreme Court on the other: first, unlike
Section 4, Article VII of the 1987 Constitution vesting in the Court the power to be the "sole judge" of all
contests relating to the qualifications of the President and the Vice-President, there is no similar provision
with respect to the other impeachable officials, i.e., the Members of this Court, the Members of the
Constitutional Commission or the Ombudsman; and second, the President and Vice-President are elected
officials while the other impeachable officers are appointive officials.
Respondent also argues that there is not single pronouncement in Funa v. Chairman
Villar,85 and Nacionalista Party v. De Vera86 (by way of ruling or obiter dictum) to the effect that an
impeachable officer may be ousted through writ of quo warranto, and that both cases were not even for quo
warranto.
Respondent maintains that whether respondent was person of "proven integrity" when she applied for the
position of Chief Justice is political question outside the jurisdiction of this Honorable Court, which only the
JBC and the President as the appointing authority could determine. She avers that the application of the
political question doctrine is not confined to the President or Congress, as the Republic supposedly argues,
but extends to other government departments or officers exercising discretionary powers, such as the JBC
which uses its wisdom and discretion in determining whether an applicant to the Judiciary is person of
"proven" integrity.
Respondent also contends that absent any challenge to her nomination and appointment on the ground of
grave abuse of discretion on the part of the JBC and the President, her appointment can no longer be
questioned.
Respondent reiterates that the instant petition is time-barred. She argues that the Republic cannot rely
on Agcaoili v. Suguitan87 because it mentioned the principle nullum temus occurit regi or "no time runs
against the king" only in passing, as the "general rule concerning limitation of action in quo
warrantoproceedings." She avers that Agcaoili is in fact authority for the principle that prescription will
definitely run against the State if the rule or statute clearly so provides.
Respondent avers that she complied with the SALN laws as Professor of the U.P. College of Law and that
the law presumes regularity in the filing of SALNs. According to respondent, that at least 11 of her SALNs
have been found tends to prove pattern of filing, rather than non-filing.
Respondent argues that the burden of proof in quo warranto proceedings falls on the party who brings the
action and that based on Doblada, the Republic failed to discharge this burden. Respondent claims that the
records of the U.P. HRDO are incomplete and unreliable and there was no categorical statement in its
Certification that she failed to file her SALNs for the years 1986, 1987, 1988, 1989, 1992, 1999, 2000, 2001,
2003, 2004, 2005, and 2006. Further, she avers that the records of the Office of the Ombudsman are even
more incomplete and unreliable, thus, any certification from said office would likewise be insufficient to
prove that she failed to file 11 of her SALNs while she was U.P. Professor.
Respondent contends that she has actually presented preponderant evidence that she filed her SALNs. She
avers that she has recovered 11 of her U.P. SALNs and she has direct proof that she executed at least 12
SALNs as U.P. Professor. She stresses that the U.P. HRDO has thrice "cleared" her of all administrative
responsibilities and administrative charges.
Respondent also claims that she was not even required to file SALN from 1986 to 1991 because her status
and appointment then was merely temporary. According to her, the fact that she served as counsel for the
Republic for the PIATCO cases in 2004, 2005 and 2006 does not negate her defense that under the law, she
was not required to file her SALNs for the years when she was on leave and was not receiving compensation
arising from public office (i.e., 2001, 2004, 2005 and 2006).
Respondent's Memorandum also sought to address certain matters raised during the Oral Arguments.
As to where her SALNs are, respondent avers that some of her SALNs were in fact found in the records of
the U.P. HRDO, and she was able to retrieve copies of some of her SALNs from the U.P. Law Center.
Without prejudice to her jurisdictional objections, she attached them to the Memorandum. She argues that
the fact that the SALNs for certain years are missing cannot give rise to the inference that they were not
filed. She points out that U.P. was only required to keep the SALNs for period of ten (10) years after receipt
of the statement, after which the SALN may be destroyed.
In explaining her statement before the JBC that her SALNs were irretrievable, respondent avers that she
honestly could not retrieve copies from U.P. over the course of weekend given to her to complete her
missing documentary requirements. She declares that she did not keep copies of her SALNs and she was not
required to do so by law.
Respondent asserts that her 2009 SALN was not belatedly filed. She explains that her 2009 SALN is an
entry SALN which she originally filed on September 16, 2010 within thirty (30) days after her assumption
of office as an Associate Justice of the Supreme Court. According to her, the revised 2009 SALN which has
the annotation "revised as of 22 June 2012," is revised version executed in June 2012 to more accurately
reflect the acquisition cost of certain assets declared in 2010.
With respect to the purported 2006 SALN, respondent avers that it was not the SALN required by RA 6713,
but mere statement of her assets which the JBC requested as tool to determine her assets for comparison
with her income tax returns. She explains that she merely happened to use downloadable SALN form which
she filled up and dated as of the time of its writing, i.e., July 27, 2010. She claims that she never
misrepresented the same to be her 2006 exit SALN from U.P. According to her, she in fact considers her
2006 SALN as one of the missing SALNs she is still trying to locate.
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Respondent claims that she could not recall all the circumstances why her 1998 SALN was executed only in
2003 which, according to her, was reasonable since it happened 15 years ago. She claims that there is no law
prohibiting her from submitting the same, and the fact that the SALN was filed serves the purpose of the law
and negates any intention to hide unexplained wealth.
It is also respondent's position that the omission of her husband's signature on her 2011 SALN was
inadvertent and was not an offense. According to her, it could not adversely impact on her integrity absent
any allegation or finding that she acquired ill-gotten wealth. She argues that the Civil Service Commission's
Guidelines which require the signature of the spouse who is not public officer, was promulgated only in
January 2013.
With regard to the jewelry she acquired from 1986 to 1991 which were supposedly declared in her 1991
SALN but were undeclared in her 1990 SALN, respondent avers that these assets were actually declared in
her 1985 and 1989 SALNs, and they were consistently declared in all her subsequent SALNs beginning
1991. According to respondent, she should not be faulted for her inadvertent omission to declare such assets
in her 1990 SALN as her declaration of the same thereafter is consistent with good faith and cured whatever
error there may have been in her 1990 SALN. She argues that said assets were not manifestly
disproportionate to her lawful income and even as U.P. Professor, she could have afforded to purchase
jewelry worth Php15,000.00 over span of six (6) years.
Finally, respondent argues that it is an "unreasonable and oppressive" interpretation of the law to reckon her
entry SALN as Associate Justice of the Court from the date of her appointment (August 16, 2010) and not
from Decembr 31, 2009 when it was actually filed. Respondent contends that R.A. No. 6713 only requires
that the SALN be filed "within thirty days after assumption of office" a directive she supposedly complied
with. She argues that while the Implementing Rules and Regulations of R.A. No. 6713 state that the SALN
should be reckoned from the first day of service, the law provides for review and compliance procedure
which requires that reporting individual first be informed and provided an opportunity to take necessary
corrective action should there be any error in her SALN. Respondent avers that she did not receive any
notice or compliance order informing her that her entry SALN was erroneous, and she was not directed to
take the necessary corrective action.
The Respondent's Reply/Supplement to Memorandum
At the close of the Oral Argument, granted upon respondent's Ad Cautelam motion, the Court specifically
required the parties to submit their respective memoranda within non-extendible period of ten (10) days,
after which, the petition shall be submitted for decision. Notwithstanding such clear directive from the
Court, and even without being required to, respondent moves (again Ad Cautelam) for the inclusion of her
Reply/Supplement to her memorandum filed beyond the period granted by the Court to the parties. The
belated filing of said Reply/Supplement in disregard of the Court's directive merits its non-admission.
Nevertheless, as the Court remains circumspect of the pleadings submitted by the parties and in accordance
with the dictates of due process and fair play, respondent's Reply/Supplement to her Memorandum, albeit
filed Ad Cautelam, is admitted.
Respondent raises two points in her Reply/Supplement: first, the new matter of tax fraud allegedly
committed by her; and second, the forumshopping allegedly committed by the Republic.
Respondent sought to address the inclusion of the charge of tax fraud allegedly committed by her relative to
the fees she received in the PIATCO cases which respondent argues to have been raised by the Republic
only in its memorandum. Respondent denies having concealed or under declared her income in the PIATCO
cases. She further points out that the Summary and the Powerpoint presentation prepared by BIR Deputy
Commissioner Gtiballa and which were attached to the Republic's memorandum were incomplete,
inaccurate and merely preliminary. In any case, respondent avers that BIR Deputy Commissioner Guballa
himself found that respondent had "substantially declared all income (legal fees) from the PIATCO case in
her ITRs from years 2004 to 2009 BUT there were certain discrepancies."88
Respondent also accuses the Republic of having committed deliberate forum-shopping in filing the action
for quo warranto even when the impeachment proceeding was already pending before the House of
Representatives. Contending that all the elements of forum-shopping are present, respondent points to the
(1) identity of parties between the quo warranto action and the impeachment case inasmuch as the House
Committee on Justice is also part of the Government; (2) identity of causes of action considering that
the quo warranto case is based on respondent's alleged lack of proven integrity for failure to file all her
SALNs when she was teaching at the U.P. College of Law and for concealing her true income and evasion
of taxes which were the same attacks on her eligibility and qualifications as enumerated in the Articles of
Impeachment; and (3) identity in the relief sought as both the quo warranto and the impeachment sought her
removal from the Office of the Chief Justice.
The Motions for Intervention
Through Joint Motion for Leave to Intervene and Admit Attached Comment-In-Intervention, movant-
intervenors composed of (1) former CEO of PAG-IBIG Fund, Zorayda Amelia Capistrano Alonzo, (2) peace
human rights advocate Remedios Mapa Suplido, (3) urban poor advocate Alicia Gentolia Murphy, (4)
Chairperson of Pambansang Kilusan ng mga Samahang Magsasaka (PAKISAMA) Noland Merida Penas,
(5) Fr. Roberto Reyes, and (6) poet, feminist youth advocate Reyanne Joy P. Librado (Capistrano, et al.,)
seek to intervene in the present petition as citizens and taxpayers.
The comment-in-intervention is virtual echo of the arguments raised in respondent's comment that quo
warranto is an improper remedy against impeachable officials who may be removed only by impeachment
and that the application of the PET rules are limited only to the President and Vice-President' who are
elective, and not appointive, officials. Movant-intervenors similarly argue that the petition is already time-
barred as the cause of action arose upon respondent's appointment as Chief Justice on August 24, 2012 or
almost six (6) years ago.
Capistrano et al. argue that it is not incumbent upon respondent to prove to the JBC that she possessed the
integrity required by the Constitution for members of the Judiciary; rather, the onus of determining whether
or not she qualified for the post fell upon the JBC. They also posit that nowhere in the Constitution is the
submission of all prior SALNs required; instead, what is required is that all aspiring justices of the Court
must have the imprimatur of the JBC, the best proof of which is person's inclusion in the shortlist.
Capistrano et al. persuade that respondent's explanation that her government records in the academe for 15
years are irretrievable is reasonable and that respondent did not mislead the JBC. On the contrary, they claim
that the JBC accepted her explanation when it deemed respondent as qualified. In doing so, they conclude,
that the JBC determined that she possessed the integrity as required by the Constitution.
A few hours after the filing of the Capistrano et. al.'s Comment-in-Intervention, another set of intervenors
composed of: (1) BAYAN MUNA Representative (Rep.) Carlos Isagani Zarate; (2) ACT Teachers Partylist
Rep. Antonio Tinio Francisca Castro; (3) GABRIELA Women's Party Rep. Emerenciana De Jesus Arlene
Brosas; (3) ANAKPAWIS Partylist Rep. Ariel Casilao; (5) KABATAAN Partylist Rep. Sarah Jane Elago;
(6) Convenors and members of Movement Against Tyranny (MAT), namely: Francisco A. Alcuaz,
Bonifacio P. Ilagan, Col. George A. Rabusa (Ret.); (7) Former Senator Rene A.V. Saguisag; (8) Bishop
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Broderick S. Pabillo, D.D.; (9) Secretary Gen. of Bagong Alyansang Makabayan (BAYAN) Renato M.
Reyes, Jr.; (10) Member of MDD Youth (an Affiliate of Aksyon Demokratiko) Kaye Ann Legaspi; and (11)
Secretary General of National Union of People's Lawyers Atty. Ephraim B. Cortez (Zarate, et al.,) filed
Motion for Leave to File Motion to Intervene and Opposition-in Intervention, pursuant to Rule 19 of the
Rules of Court. They claim that as citizens and taxpayers, they have legal interest in the matter of
respondent's ouster or removal.
Zarate et al. raise the similar argument that the Chief Justice of the Supreme Court may only be removed
from office on impeachment for, and conviction of, culpable violation of the constitution, treason, bribery,
graft and corruption, other high crimes, or betrayal of public trust and that it is only the Congress who has
the power to remove the Chief Justice through the exclusive mode of impeachment.
They further argue that the issue of respondent's non-submission of complete SALNs, without more, does
not have the effect of putting to question her integrity as she did not conceal her SALNs. They argue that the
qualification of having "proven integrity" is standard subject to the discretion of, first, the JBC who submits
the list of qualified candidates; and second, of the President, who will select among the shortlist whom to
appoint as Chief Justice.
Movant-Intervenor Rene A.V. Saguisag subsequently filed Supplement to Motion for Leave to File Motion
to Intervene and Opposition-in-Intervention CumPetition to Recuse seeking the inhibition of unnamed
Members of this Court who "may have prematurely thrown their weight on the other side, actually or
perceptually" on the ground that respondent is entitled to an impartial arbiter.
As well, the Integrated Bar of the Philippines (IBP) filed its Motion for Leave to File and to Admit Attached
Opposition-in-Intervention as an organization of all Philippine lawyers, having the fundamental duty to
uphold the Constitution and an interest in ensuring the validity of the appointments to the Judiciary. The
IBP's arguments reflect the arguments of the respondent and the other movant-intervenors that the quo
warranto petition is time-barred and is unavailable against an impeachable officer. The IBP further argues
that the determination of whether respondent is of "proven integrity" belongs to the JBC and which question
the Court cannot inquire into without violating the separation of powers. It is likewise the contention of the
IBP that the petition is fatally flawed since the JBC never required the submission of respondent's SALNs
from 2001 to 2006.
Also seeking to intervene in the instant petition, Senators Leila M. De Lima (Senator De Lima) and Antonio
F. Trillanes IV (Senator Trillanes) as citizens, taxpayers, and senators of the Republic, filed Motion to
Intervene and Admit Attached Opposition-In-Intervention (Ad Cautelam) on April 4, 2018.
In the said Motion, Senators De Lima and Trillanes assert that they possess clear legal interest, both personal
and official, in the subject matter of the Republic's petition to oust the Chief justice on the ground that she
does not possess the constitutional requirement of integrity. According to Senators De Lima and Trillanes,
they have the right and duty to uphold the Constitution and to oppose government actions that are clearly
and patently unconstitutional. It is also Senators De Lima and Trillanes' theory that the instant quo
warranto case is aimed to deprive the Senate of its jurisdiction as the impeachment tribunal. They argue that
their mandated duty as judges in the possible impeachment trial of the Chief Justice will be pre-emptect and
negated if the quo warranto petition will be granted. Their claimed legal interest in their intervention in and
opposition to the petition for quo warranto is mainly anchored upon their duty and prerogatives as Senators-
judges in an impeachment trial and to protect the institution of impeachment as mode of enforcing
accountability.
Senators De Lima and Trillanes' Opposition-In-Intervention is mere reiteration of the respondent's argument
that this Court has no jurisdiction over petition for quo warranto against an impeachable officer. They argue
that the Chief Justice of the Supreme Court is, by express provision of the Consitution, removable from
office exclusively by impeachment. They also aver that the ground raised in the petition for quo
warranto lack of integrity for failing to submit one's SALN is part of the allegations in the impeachment
case being heard in the House of Representatives. Thus, they argue that the use of an identical ground in quo
warranto proceeding directly undermines the jurisdiction of the Senate to hear and decide impeachment
cases and the prerogative of the senators to try the same.
Senators De Lima and Trillanes also advance the argument that the Constitution identifies and enumerates
only three qualifications for appointment to the Supreme Court: (1) natural born citizenship; (2) age, i.e., at
least forty years; and (3) an experience of at least 15 years either as judge of lower court or in the practice of
law in the Philippines. They assert that the filing of SALN, taking of psychological or physical examination,
and similar requirements, are merely discretionary administrative requirements for consideration of the JBC,
not Constitutional requirements, hence, can be waived, removed entirely, or adjusted by the JBC in the
exercise of its discretion. According to the said movantintervenors, Section 7(3), Article VIII of the 1987
Constitution, which states that, "[a] Member of the Judiciary must be person of proven competence,
integrity, probity, and independence", does not speak of objective constitutional qualifications, but only of
subjective characteristics of judge. They, therefore, contend that "qualifications" such as citizenship, age,
and experience are enforceable while "characteristics" such as competence, integrity, probity, and
independence are mere subjective considerations.
Corollarily, Senators De Lima and Trillanes argue that the subjective considerations are not susceptible to
analysis with tools of legal doctrine. Hence, questions on this matter are for the consideration of political
institutions under the Constitution, i.e., the JBC and the President (prior to appointment) and the House of
Representatives and the Senate (after appointment).
The Motions for Inhibition
By way of separately filed motions, respondent seeks affirmative relief, in the form of the inhibition of five
(5) Justices of the Court, the jurisdiction of which she questions and assails. Respondent prays for the
inhibition of Associate Justices Lucas P. Bersamin, Diosdado M. Peralta, Francis H. Jardeleza, Noel
Gimenez Tijam, and Teresita J. Leonardo-De Castro from hearing and deciding the present petition.
In common, respondent imputes actual bias on said Justices for having testified before the House Committee
on Justice on the impeachment complaint. In particular, respondent considered Justice Bersamin's allusion to
respondent as "dictator" and his personal resentment about the supposed withdrawal of the privilege
previously enjoyed by the members of the Court to recommend nominees to vacant positions in the
Judiciary, as evidence of actual bias.
Justice Peralta's inhibition, on the other hand, is being sought because as then Acting ex officio Chairperson
of the JBC when respondent was nominated for appointment as Chief Justice, he would have personal
knowledge of disputed evidentiary facts concerning the proceedings and for having served as material
witness in the matter in controversy.
Justice Jardeleza's inhibition is sought on the ground that his testimony before the House Committee on
Justice reveals that he harbors ill feelings towards respondent on account of the latter's challenge to his
integrity during the nomination process for the Associate Justice position vice Justice Roberto A. Abad
which he characterized as "inhumane".
310
Respondent seeks the inhibition of Justice Tijam based on the latter's statement as quoted in Manila Times
article to the effect that if respondent continues to ignore and to refuse to participate in the impeachment
process, she is clearly liable for culpable violation of the Constitution.
Respondent likewise made mention that Justice Tijam and Justice Bersamin wore touch of red during the
"Red Monday" protest on March 12, 2018 wherein judges and court employees reportedly called on
respondent to make the supreme sacrifice and resign.
Respondent also calls for the inhibition of Justice De Castro for having allegedly prejudged the issue as
regards the validity of respondent's nomination and appointment in 2012 when Justice De Castro testified
under oath during the House Committee on Justice hearings that respondent should have been disqualified
from the shortlist on account of the SALNs she allegedly failed to submit.
At the last minute, respondent also seeks to disqualify Justice Samuel R. Martires for his purported
insinuations during the Oral Arguments questioning her "mental" or "psychological" fitness on the basis of
her belief that God is "the source of everything in (her) life." 89
Respondent also prays that the Ad Cautelam Respectful Motions for Inhibitions of Associate Justices
Peralta, Leonardo-De Castro, Jardeleza, Tijam, Bersamin and Martires be resolved by the Court En Banc,
without the participation of the Justices she seeks to disqualify.
The Issues
From the arguments raised by the parties and the issues as delineated in the Advisory governing the special
Oral Arguments by way of accommodation to respondent, the paramount issues to be resolved by the Court
are:
1. Whether the Court can assume jurisdiction and give due course to the instant petition for quo
warranto against respondent who is an impeachable officer and against whom an impeachment complaint
has already been filed with the House of Representatives;
2. Whether the petition is outrightly dismissible on the ground of prescription;
3. Whether respondent is eligible for the position of Chief Justice:
a. Whether the determination of candidate's eligibility for nomination is the sole and exclusive function of
the JBC and whether such determination. partakes of the character of political question outside the Court's
supervisory and review powers;
b. Whether respondent failed to file her SALNs as mandated by the Constitution and required by the law and
its implementing rules and regulations; and if so, whether the failure to file SALNs voids the nomination
and appointment of respondent as Chief Justice;
c. Whether respondent failed to comply with the submission of SALNs as required by the JBC; and if so,
whether the failure to submit SALNs to the JBC voids the nomination and appointment of respondent as
Chief Justice;
d. In case of finding that respondent is ineligible to hold the position of Chief Justice, whether the
subsequent nomination by the JBC and the appointment by the President cured such ineligibility.
4. Whether respondent is de jure or de facto officer.
 The Ruling of the Court
Preliminary Issues
Intervention is an ancillary remedy restricted in purpose and in time
Intervention is remedy by which third party, not originally impleaded in the proceedings, becomes litigant
therein for certain purpose: to enable the third party to protect or preserve right or interest that may be
affected by those proceedings.90
Nevertheless, the remedy of intervention is not matter of right but rests on the sound discretion of the court
upon compliance with the first requirement on legal interest and the second requirement that no delay and
prejudice should result as spelled out under Section 1, Rule 19 of the Rules of Court, as follows:
Sec. 1. Who may intervene. A person who has legal interest in the matter in litigation, or in the success of
either of the parties, or an interest against both, or is so situated as to be adversely affected by distribution or
other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be
allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay
or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor's rights
may be fully protected in separate proceeding.
Each of the movant-intervenors in this case seek to intervene as citizens and taxpayers, whose claimed
interest to justify their intervention is their "sense of patriotism and their common desire to protect and
uphold the Philippine Constitution". The movant-intervenors further assert "public right" to intervene in the
instant case by virtue of its "transcendental importance for the Filipino people as whole". Apart from such
naked allegations, movant-intervenors failed to establish to the Court's satisfaction the required legal
interest. Our jurisprudence is well-settled on the matter:
Intervention is not matter of absolute right but may be permitted by the court when the applicant shows
facts which satisfy the requirements of the statute authorizing intervention. Under our Rules of Court,
what qualifies person to intervene is his possession of legal interest in the matter in litigation or in the
success of either of the parties, or an interest against both; or when he is so situated as to be adversely
affected by distribution or other disposition of property in the custody of the court or an officer thereof. As
regards the legal interest as qualifying factor, this Court has ruled that such interest must be of direct and
immediate character so that the intervenor will either gain or lose by the direct legal operation of the
judgment. The interest must be actual and material, concern which is more than mere curiosity, or
academic or sentimental desire; it must not be indirect and contingent, indirect and remote,
conjectural, consequential or collateral. x x x.91 (Emphasis ours)
Clearly, herein movant-intervenors' sentiments, no matter how noble, do not, in any way, come within the
purview of the concept of "legal interest" contemplated under the Rules to justify the allowance of
intervention. Movant-intervenors failed to show any legal interest of such nature that they will "either gain
or lose by the direct legal operation of the judgment". Even the IBP's assertion of their "fundamental duty to
uphold the Constitution, advocate for the rule of law, and safeguard the administration of justice", being the
official organization of all Philippine lawyers, will not suffice. Admittedly, their interest is merely out of
"sentimental desire" to uphold the rule of law. Meanwhile, Senators De Lima and Trillanes' claimed legal
interest is mainly grounded upon their would be participation in the impeachment trial as Senators-judges if
the articles of impeachment will be filed before the Senate as the impeachment court. Nevertheless, the fact
remains that as of the moment, such interest is still contingent on the filing of the articles of impeachment
before the Senate. It bears stressing that the interest contemplated by law must be actual, substantial,
material, direct and immediate, and not simply contingent or expectant.92
Indeed, if every person, not parties to the action but assert their desire to uphold the rule of law and the
311
Constitution, were allowed to intervene, proceedings would become unnecessarily complicated, expensive,
and interminable.93
Emphatically, quo warranto proceeding is an action by the government against individuals unlawfully
holding an office. Section 1, Rule 66 provides:
Section 1. Action by Government against individuals. An action for the usurpation of public office, position
or franchise may be commenced by verified petition brought in the name of the Republic of the Philippines
against:
(a) person who usurps, intrudes into, or unlawfully holds or exercises public office, position or franchise;
(b) public officer who does or suffers an act which, by the provision of law, constitutes ground for the
forfeiture of his office; or
(c) An association which acts as corporation within the Philippines without being legally incorporated or
without lawful authority so to act.
The remedy of quo warranto is vested in the people, and not in any private individual or group, because
disputes over title to public office are viewed as public question of governmental legitimacy and not merely
private quarrel among rival claimants.94
Newman v. United States ex Rel. Frizzell,95 historically traced the nature of quo warranto proceedings as
crime which could only be prosecuted in the name of the King by his duly authorized law officers. In time,
the criminal features of quo warranto proceedings were modified and as such, the writ came to be used as
means to determine which of two claimants was entitled to an office and to order the ouster and the payment
of fine against the usurper. This quasi-criminal nature of quo warranto proceedings was adopted in some
American states. Nonetheless, Newman explains that the Code of the District of Colombia, which was the
venue of the case, continues to treat usurpation of office as public wrong which can be corrected only by
proceeding in the name of the government itself. Thus:
In sense in very important sense every citizen and every taxpayer is interested in the enforcement of law, in
the administration of law, and in having only qualified officers execute the law. But that general interest is
not private, but public interest. Being such, it is to be represented by the Attorney General or the District
Attorney, who are expected by themselves or those they authorize to institute quo warrantoproceedings
against usurpers in the same way that they are expected to institute proceedings against any other violator of
the law. That general public interest is not sufficient to authorize private citizen to institute such
proceedings, for, if it was, then every citizen and every taxpayer would have the same interest and the same
right to institute such proceedings, and public officer might, from the beginning to the end of his term, be
harassed with proceedings to try his title.
The only time that an individual, in his own name, may bring an action for quo warranto is when such
individual has claim over the position in question. Section of Rule 66 of the Rules of Court provides:
Section 5. When an individual may commence such an action. A person claiming to be entitled to public
office or position usurped or unlawfully held or exercised by another may bring an action therefor in his
own name.
In this case, the movants-intervenors are neither individuals claiming to be entitled to the questioned
position nor are they the ones charged with the usurpation thereof.
Furthermore, it should be emphasized that the movants-intervenors, in their respective Motions, presented
nothing more than mere reiteration of respondent's allegations and arguments in her Comment.
For these reasons, the Court, in its Resolution96 dated April 3, 2018, resolved to deny the motions for
intervention respectively filed by Capistrano et al., and Zarate et al., and to note the IBP's intervention. For
similar reasons, the Court resolves to deny the motion for intervention of Senators De Lima and Trillanes.
No basis for the Associate Justices of the Supreme Court to inhibit in the case
The instant petition comes at the heels of the recently-concluded hearings on the determination of probable
cause in the impeachment complaint against respondent before the House Committee on Justice. Several
Members of the Court, both incumbent and retired, were invited, under pain of contempt, to serve as
resource persons. Those Members who were present at the Committee hearings were armed with the
requisite imprimatur of the Court En Banc, given that the Members are to testify only on matters within their
personal knowledge and insofar as material and relevant to the issues being heard. For lack of particularity,
the Court supposes that the attendance of some of its Members in the House Committee hearings is the basis
of movant-intervenor Saguisag's motion to recuse.
On the other hand, respondent was more emphatic when she sought affirmative relief, in the form of the
inhibition of six (6) Justices, of the Court, whose jurisdiction she questions and assails. Specifically,
respondent prays for the inhibition of Associate Justices Lucas P. Bersamin, Diosdado M. Peralta, Francis
H. Jardeleza, Noel Gimenez Tijam, Teresita J. LeonardoDe Castro and Samuel R. Martires fundamentally
on the ground of actual bias for having commonly testified before the House Committee on Justice on the
impeachment case.
As for Justice Samuel R. Martires, respondent concludes Justice Martires' manifested actual bias based on
his statements during the Oral Arguments which purportedly tended to question respondent's mental and
psychological fitness.
In particular, respondent seeks the inhibition of Justice Tijam based on the latter's statement as quoted in
Manila Times article to the effect that if respondent continues to ignore and to refuse to participate in the
impeachment process, she is clearly liable for culpable violation of the Constitution.
Respondent cites the article entitled, "Appear in Congress or vialate Constitution," dated December 4, 2017,
where Justice Tijam was purportedly quoted to have said:
Impeachment is constitutional process and mandate enshrined in the Constitution. Justices took an oath to
defend, preserve, protect the Constitution. If Chief Justice Sereno continues to ignore and continues to
refuse to participate in the impeachment process, ergo, she is clearly liable for culpable violation of
the Constitution. (emphasis supplied)
Respondent claims that the aforesaid statements of Justice Tijam are indicative of his stance that there may
be ground to impeach and remove respondent from office, which is also the objective of the quo
warranto petition against her.
Ultimately, the cause for inhibition simmers to the question of whether, in so appearing and testifying before
the House Committee on Justice, the Members of the Court are precluded from hearing and deciding the
instant petition for quo warranto. To this, the Court answers in the negative.
Jurisprudence recognizes the right of litigants to seek disqualification of judges. Indeed, elementary due
process requires hearing before an impartial and disinterested tribunal. "A judge has both the duty of
rendering just decision and the duty of doing it in manner completely free from suspicion as to its fairness
and as to his integrity."97
However, the right of party to seek the inhibition or disqualification of judge who does not appear to be
wholly free, disinterested, impartial and independent in handling the case must be balanced with the latter's
312
sacred duty to decide cases without fear of repression. The movant must therefore prove the ground of bias
and prejudice by clear and convincing evidence to disqualify judge from participating in particular trial.
"[W]hile it is settled principle that opinions formed in the course of judicial proceedings, based on the
evidence presented and conduct observed by the judge, do not prove personal bias or prejudice on the part of
the judge."98
A circumspect reading of Justice Tijam's statements in the Manila Times article reveals that the manifest
intent of the statements was only to prod respondent to observe and respect the constitutional process of
impeachment, and to exemplify the ideals of public accountability, thus:
He added that he wanted to encourage Sereno to show up at the Congress hearings "to respect and
participate in the impeachment (process), and to defend herself and protect the institution."
Sereno, he said, should be role model when it comes to respecting the Constitution.
"Impeachment is not an invention of politicians. It was drafted by the framers of the Constitution. Media,
which propagates the myth that impeachment is numbers game, hence, is political and arbitrary, fails to
emphasize the fact that the rule of the majority is the essence of democracy," the magistrate stressed.
Tijam believes that the impeachment process against Sereno is not an attack on the high court or the
Judiciary because the Supreme Court does not consist of the chief justice alone.
"Impeachment is [neither] an assault on the Judiciary nor an infringement on the independence of the
Judiciary, because it is enshrined in the Constitution. Parenthetically, when the SC strikes down acts of
Congress and acts of the President and the Executive Department for being unlawful and unconstitutional,
the SC is not assaulting the independence of Congress and the Executive Department because the expanded
power of judicial review is enshrined in the Constitution," Tijam pointed out.
Sereno, he said, should be role model when it comes to respecting the Constitution.99 (Emphasis ours)
Notably, respondent conveniently and casually invoked only portion of the article which suited her objective
of imputing bias against Justice Tijam.
As, to the act of wearing red tie which purportedly establishes Justices Tijam and Bersamin's prejudice
against her, the argument is baseless and unfair. There is no basis, whether in logic or in law, to establish
connection between piece of clothing and magistrate's performance of adjudicatory functions. Absent
compelling proof to the contrary, the red piece of clothing was merely coincidental and should not be
deemed sufficient ground to disqualify them.
In Philippine Commercial International Bank v. Sps. Dy Hong Pi, et al.,100 this Court explained that:
[T]he second paragraph of Rule 137, Section 1, 101 does not give judges unfettered discretion to decide
whether to desist from hearing case. The inhibition must be for just and valid causes, and in this regard, We
have noted that the mere imputation of bias or partiality is not enough ground for inhibition, especially when
the charge is without basis. This Court has to be shown acts or conduct clearly indicative of arbitrariness or
prejudice before it can brand them with the stigma of bias or partiality. Moreover, extrinsic evidence is
required to establish bias, bad faith, malice or corrupt purpose, in addition to palpable error which may be
inferred from the decision or order itself. The only exception to the rule is when the error is so gross and
patent as to produce an ,ineluctable inference of bad faith or malice.102 (Citations omitted)
In this case, it does not appear that there are grounds for compulsory inhibition. As to voluntary inhibition,
the mere fact that some of the Associate Justices participated in the hearings of the Committee on Justice
determining probable cause for the impeachment of respondent does not make them disqualified to hear the
instant petition. Their appearance thereat was in deference to the House of Representatives whose
constitutional duty to investigate the impeachment complaint filed against respondent could not be doubted.
Their appearance was with the prior consent of the Supreme Court En Banc and they faithfully observed the
parameters that the Court set for the purpose. Their statements in the hearing, should be carefully viewed
within this context, and should not be hastily interpreted as an adverse attack against respondent.
In fact, Justice Tijam, in his Sworn Statement103 submitted to the House Committee on Justice, clearly
identified the purpose of his attendance thereat:
2. In reply, sent letter to Representative Umali on November 24, 2017, informing him that inasmuch as the
issue involved actions of the Supreme Court En Banc, I deemed it proper to first secure its approval
before participating in the House Committee hearing.
3. On November 28, 2017, the Supreme Court En Banc gave clearance for Justices who have been invited
by the House Committee on Justice to testify in connection with the impeachment complaint, to give
testimony on administrative matters if they so wish. The Court's Resolution in this regard states that the
authority was granted "only because the proceedings before the Committee on Justice of the House of
Representatives constitute part of the impeachment process under Section 3, Article XI of the 1987
Constitution."
A copy of the Court's Resolution is hereto attached as Annex "A."
4. am submitting this Sworn Statement to the House Committee on Justice as my testimony in relation to
A.M. No. 17-06-02-SC, based on my best recollection of events relating to said matter and available records.
shall, however, be willing to give further testimony should the House Committee find it appropriate to
propound questions thereon at the December 11, 2017 Committee hearing, subject to applicable limitations
under law and relevant rules.
5. I will appear and give testimony before the House Committee on Justice not as witness for the
complainant, but to honor the Committee's invitation to shed light on A.M. No. 17-06-02-SC and to
accord due respect to the Constitutionally established process of impeachment. (Emphasis ours)
Likewise, the Justices, including Justice Tijam, who appeared during the House Committee on Justice
hearings, refused to form any conclusion or to answer the uniform query as to whether respondent's acts
constitute impeachable offenses, as it was not theirs to decide but function properly belonging to the Senate,
sitting as an impeachment court.104 Evidently, no bias and prejudice on the part of the Justices could be
inferred therein.
A judge may decide, "in the exercise of his sound discretion," to recuse himself from case for just or valid
reasons. The phrase just or valid reasons, as the second requisite for voluntary inhibition, must be taken to
mean -
x x x causes which, though not strictly falling within those enumerated in the first paragraph, are akin or
analogous thereto. In determining what causes are just, judges must keep in mind that next to importance to
the duty of rendering righteous judgment is that of doing it in such manner as will beget no suspicion of the
fairness and integrity of the judge. For it is an accepted axiom that every litigant, including the state, in
criminal cases, is entitled to nothing less than the cold neutrality of an impartial judge, and the law intends
that no judge shall preside in any case in which he is not wholly free, disinterested, impartial, and
independent.105
Respondent's call for inhibition has been based on speculations, or on distortions of the language, context
and meaning of the answers the Justices may have given as sworn witnesses in the proceedings of the House
Committee on Justice.
313
Justice Bersamin's statement that "Ang Supreme Court ay hindi po maaring mag function kung isa ay
diktador," is clearly hypothetical statement, an observation on what would the Court be if any of its
Members were to act dictatorially.
Likewise, the Court cannot ascribe bias in Justice Bersamin's remark that he was offended by respondent's
attitude in ignoring the collegiality of the Supreme Court when she withdrew the Justices' "privilege" to
recommend nominees to fill vacancies in the Supreme Court. It would be presumptuous to equate this
statement to personal resentment as respondent regards it. There has always been high degree of
professionalism among the Members of the Court in both their personal and official dealings with each
other. It cannot also be denied that the statement reflected natural sentiment towards decision reached and
imposed by member of collegial body without consultation or consensus.
Meanwhile, respondent's allegation of actual bias and partiality against Justice Peralta is negated by his
testimony during the January 15, 2018 hearing of the House Committee on Justice, where he stated that he
has been very supportive of the Judiciary reforms introduced by respondent as the Chief Justice, even if she
suspects that he is one of those behind her impeachment.
Justice Peralta's testimony before the House Committee on Justice also contradicts respondent's allegation
that Justice Peralta's apparent bias arose from his belief that respondent caused the exclusion of his wife,
Court of Appeals (CA) Associate Justice Fernanda Lampas Peralta, from the list of applications for the
position of CA Presiding Justice. Justice Peralta has made it clear during the February 12, 2018
Congressional hearing that he has already moved on from said issue and that the purpose of his testimony
was merely to protect prospective applicants to the Judiciary.
Justice Peralta's testimony during the Congressional hearing that "had (he) been informed of (the) letter
dated July 23, 2012 and certificate of clearance, (he) could have immediately objected to the selection of the
Chief Justice for voting because this is very clear deviation from existing rules that if member of the
Judiciary would like...or...a candidate would like to apply for Chief Justice, then she or he is mandated to
submit the SALNs," is clearly a' hypothetical statement, which will not necessarily result in the
disqualification of respondent from nomination. It was also expressed in line with his functions as then
Acting Chairperson of the JBC, tasked with determining the constitutional and statutory eligibility of
applicants for the position of Chief Justice. It bears stressing, too, that at the time said statement was made,
the petition for quo warranto has not been filed; thus, such statement cannot amount to prejudgment of the
case.
Furthermore, according to Justice Peralta, while he was then the Acting Ex Officio Chairperson of the JBC at
the time of respondent's application for the position of Chief Justice, he had no personal knowledge of the
disputed facts concerning the proceedings, specifically the matters considered by the members of the JBC in
preparing the shortlist of nominees. He explained that it was the ORSN of the JBC which was tasked to
determine completeness of the applicants' documentary requirements, including the SALNs.
As for Justice Martires' statements during the Oral Arguments, this Court does not view them as indication
of actual bias or prejudice against respondent. Our review of the record reveals that Justice Martires' did not
refer to respondent as the object of his statements, as follows:
JUSTICE MARTIRES :
Solicitor Calida, would you agree with me na lahat ng taong may dibdib ay may kaba sa dibdib? At lahat ng
taong may ulo ay may katok sa ulo.
SOLICITOR GENERAL CALIDA:
Yes, Your Honor, agree.
JUSTICE MARTIRES:
Now would you consider it mental illness (sic) when person always invokes God as the source of his
strength? The source of his inspiration? The source of happiness? The source of everything in life? Is that
mental illness.
SOLICITOR GENERAL CALIDA:
Not necessarily, Your Honor.
JUSTICE MARTIRES:
So, I'm just making follow-up to the question that Justice Velasco earlier asked. So, would you agree with
me that the psychiatrist made wrong evaluation with respect to the psychiatric report of the Chief Justice? 106
Neither are We prepared to conclude that Justice Martires' statements were based on an extraneous source,
other than what what he has learned or encountered over the course of the instant proceedings. There is
nothing in the interpellation, nor in Justice Martires' statements that he has read the psychiatric report, nor
has read newspaper accounts tackling the same. He merely asked the OSG if he has read the same, and his
opinion regarding it.
Contrary to respondent's contentions, Justice Martires has not suggested that she suffers from some mental
or psychological illness. At most, his questions and statements were merely hypothetical in nature, which do
not even constitute as an opinion against respondent. Certainly, to impute actual bias based on such brief
discourse with respect to hypothetical matters is conjectural and highly speculative. "Allegations and
perceptions of bias from the mere tenor and language of judge is insufficient to show prejudgment."107
In the same vein, insinuations that the Justices of the Supreme Court are towing the line of President
Rodrigo Roa Duterte in entertaining the quo warrantopetition must be struck for being unfounded and for
sowing seeds of mistrust and discordance between the Court and the public. The Members of the Court are
beholden to no one, except to the sovereign Filipino people who ordained and promulgated the Constitution.
It is thus inappropriate to misrepresent that the Solicitor General who has supposedly met consistent
litigation success before the Supreme Court shall likewise automatically and positively be received in the
present quo warranto action. That the Court spares the Solicitor General the rod is easily dispelled by the
Court's firm orders in G.R. Nos. 234359 and 234484 concerning alleged extra legal killings a case directly
concerning the actuations of the executive department to provide the Court with documents relative to the
Oplan Tokhang operations and by uninamous vote, rebuked the Solicitor General's plea for reconsideration.
Suffice to say that the Court decides based on the merits of case and not on the actors or the supposed
benefactors involved.
Absent strong and compelling evidence establishing actual bias and partiality on the part of the Justices
whose recusal was sought, respondent's motions for inhibition must perforce fail. Mere conjectures and
speculations cannot justify the inhibition of Judge or Justice from judicial matter. The presumption that the
judge will undertake his noble role of dispensing justice in accordance with law and evidence, and without
fear or favor, should not be abandoned without clear and convincing evidence to the contrary.
314
In Dimo Realty Development, Inc. v. Dimaculangan,108 We held:
"[B]ias and prejudice, to be considered valid reasons for the voluntary inhibition of judges, must be proved
with clear and convincing evidence. Bare allegations of partiality and prejudgment will not suffice. These
cannot be presumed, especially if weighed against the sacred obligation of judges whose oaths of office
require them to administer justice without respect to person and to do equal right to the poor and the
rich."109 (Citation omitted)
The Court has pointedly observed in Pimentel v. Hon. Salanga:110
Efforts to attain fair, just and impartial trial and decision, have natural and alluring appeal. But, we are not
licensed to indulge in unjustified assumptions, or make speculative approach to this ideal. It ill behooves
this Court to tar and feather judge as biased or prejudiced, simply because counsel for party litigant
happens to complain against him. As applied here, respondent judge has not as yet crossed the line
that divides partiality and impartiality. He has not thus far stepped to one side of the fulcrum. No act
or conduct of his would show arbitrariness or prejudice. Therefore, we are not to assume what
respondent judge, not otherwise legally disqualified, will do in case before him. We have had occasion
to rule in criminal case that charge made before trial that party "will not be given fair, impartial and
just hearing" is "premature." Prejudice is not to be presumed. Especially if weighed against judge's
legal obligation under his oath to administer justice "without respect to prison and do equal right to
the poor and the rich." To disqualify or not to disqualify himself then, as far as respondent judge is
concerned, is matter of conscience.111 (Citations omitted and emphasis ours)
The Court has consequently counseled that no Judge or Justice who is not legally disqualified should evade
the duty and responsibility to sit in the adjudication of any controversy without committing dereliction of
duty for which he or she may be held accountable. Towards that end, the Court has aptly reminded:
To take or not to take cognizance of case, does not depend upon the discretion of judge not legally
disqualified to sit in given case. It is his duty not to sit in its trial and decision if legally disqualified; but if
the judge is not disqualified, it is matter of official duty for him to proceed with the trial and decision of the
case. He cannot shirk the responsibility without the risk of being called upon to account for his
dereliction.112
It is timely to be reminded, too, that the Supreme Court is collegial judicial body whose every Member has
solemnly and individually sworn to dispense and administer justice to every litigant. As collegial body, the
Supreme Court adjudicates without fear or favor. The only things that the Supreme Court collectively
focuses its attention to in every case are the merits thereof, and the arguments of the parties on the issues
submitted for consideration and deliberation. Only thereby may the solemn individual oath of the Members
to do justice be obeyed.
In line with the foregoing, We deem it baseless, not to mention problematic, the respondent's prayer that the
matter of inhibition of the six Associate Justices be decided by the remaining members of the Court En
Banc. The respondent herself was cognizant that the prevailing rule allows challenged Justices to participate
in the deliberations on the matter of their disqualification. Moreover, exclusion from the deliberations due to
delicadeza or sense of decency, partakes of ground apt for voluntary inhibition. It bears to be reminded that
voluntary inhibition, leaves to the sound discretion of the judges concerned whether to sit in case for other
just and valid reasons, with only their conscience as guide. 113 Indeed, the best person to determine the
propriety of sitting in case rests with the magistrate sought to be disqualified. Moreover, to compel the
remaining members to decide on the challenged member's fitness to resolve the case is to give them
authority to review the propriety of acts of their colleagues, scenario which can undermine the independence
of each of the members of the High Court.
In the En Banc case of Jurado Co. v. Hongkong Bank,114 the Court elucidated that challenge to the
competency of judge may admit two constructions: first, the magistrate decides for himself the question of
his competency and when he does so, his decision therein is conclusive and the other Members of the Court
have no voice in it; and second, the challenged magistrate sits with the Court and decides the challenge as
collegial body. It was in Jurado that the Court adopted the second view as the proper approach when
challenge is poised on the competency of sitting magistrate, that is, the Court, together withthe challenged
magistrate, decides. Jurado further expressly excluded possible third construction wherein the Court decides
the challenge but without the participation of the challenged member on the ground that such construction
would place power on party to halt the proceedings by the simple expedient of challenging majority of the
Justices. The Court sees no reason to deviate from its standing practice of resolving competency challenges
as collegial body without excluding the challenged Member from participating therein.
Accordingly, the Court resolves to DENY respondent's motion to exclude Associate Justices Peralta,
Leonardo-De Castro, Jardeleza, Tijam, Bersamin, and Martires in the resolution of the separate motions' for
inhibition against the said Associate Justices. Likewise, the Court resolves to DENY the said separate
motions for inhibition.
Substantive Issues
I.
The Court has Jurisdiction over the instant Petition for Quo Warranto
The petition challenges respondent's right and title to the position of Chief Justice. The Republic avers that
respondent unlawfully holds her office because in failing to regularly declare her assets, liabilities and net
worth as member of the career service prior to her appointment as an Associate Justice, and later as Chief
Justice, of the Court, she cannot be said to possess the requirement of proven integrity demanded of every
aspiring member of the Judiciary. The Republic thus prays that respondent's appointment as Chief Justice be
declared void. Respondent counters that, as an impeachable officer, she may only be removed through
impeachment by the Senate sitting as an impeachment court.
Supreme Court has original jurisdiction over an action for quo warranto
Section 5, Article VIII of the Constitution, in part, provides that the Supreme Court shall exercise original
jurisdiction over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. This
Court, the Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue the
extraordinary writs, including quo warranto.
Relatedly, Section 7, Rule 66 of the Rules of Court provides that the venue of an action for quo warranto,
when commenced by the Solicitor General, is either the Regional Trial Court in the City of Manila, in the
Court of Appeals, or in the Supreme Court.
While the hierarchy of courts serves as general determinant of the appropriate forum for petitions for the
extraordinary writs, cl.irect invocation of the Supreme Court's original jurisdiction to issue such writs is
allowed when there are special and important reasons therefor, clearly and specifically set out in the
petition.115 In the instant case, direct resort to the Court is justified considering that the action for quo
warranto questions the qualification of no less than Member of the Court. The issue of whether person
usurps, intrudes into, or unlawfully holds or exercises public office is matter of public concern over which
the government takes special interest as it obviously cannot allow an intruder or impostor to occupy public
position.116
The instant petition is case of transcendental importance
315
While traditionally, the principle of transcendental importance applies as an exception to the rule
requiring locus standi before the Courts can exercise its judicial power of review, the same principle
nevertheless, finds application in this case as it is without doubt that the State maintains an interest on the
issue of the legality of the Chief Justice's appointment.
Further, it is apparent that the instant petition is one of first impression and of paramount importance to the
public in the sense that the qualification, eligibility and appointment of an incumbent Chief Justice, the
highest official of the Judiciary, are being scrutinized through an action for quo warranto. The Court's action
on the present petition has far-reaching implications, and it is paramount that the Court make definitive
pronouncements on the issues herein presented for the guidance of the bench, bar, and the public in future
analogous cases. Thus, the questions herein presented merit serious consideration from the Court and should
not be trifled on.
Policy and ethical considerations likewise behoove this Court to rule on the issues put forth by the parties.
This Court has always been vigilant advocate in ensuring that its members and employees continuously
possess the highest ideals of integrity, honesty, and uprightness. More than professional competence, this
Court is cognizant of the reality that the strength of Our institution depends on the confidence reposed on Us
by the public. As can be gleaned from Our recent decisions, this Court has not hesitated from disciplining its
members whether they be judges, Justices or regular court employees. This case should not therefore be
treated merely with kid gloves because it involves the highest official of the judicial branch of the
government. On the contrary, this is an opportune time for this Court to exact accountability by examining
whether there has been strict compliance with the legal and procedural requirements in the appointment of
its Members.
Respondent, however, pounds on the fact that as member of the Supreme Court, she is an impeachable
officer. As such, respondent argues that quo warranto proceeding, which may result in her ouster, cannot be
lodged against her, especially when there is an impending impeachment case against her.
This argument is misplaced.
The origin, nature and purpose of impeachment and quo warranto are materially different
While both impeachment and quo warranto may result in the ouster of the public official, the two
proceedings materially differ. At its most basic, impeachment proceedings are political in nature, while an
action for quo warranto is judicial or proceeding traditionally lodged in the courts.
To lend proper context, We briefly recount the origin and nature of impeachment proceedings and quo
warranto petition:
Impeachment
Historians trace the origin of impeachment as far as the 5th century in ancient Greece in process
called eisangelia.117 The grounds for impeachment include treason, conspiracy against the democracy,
betrayal of strategic posts or expeditionary forces and corruption and deception. 118
Its, modem form, however, appears to be inspired by the British parliamentary system of impeachment.
Though both public and private officials can be the subject of the process, the British system of
impeachment is largely similar to the current procedure in that it is undertaken in both Houses of the
Parliament. The House of Commons determines when an impeachment should be instituted. If the grounds,
normally for treason and other high crimes and misdemeanor, are deemed sufficient, the House of Commons
prosecutes the individual before the House of Lords. 119
While impeachment was availed for "high crimes and misdemeanors", it would appear that the phrase was
applied to variety of acts which can arguably amount to breach of the public's confidence, such as advising
the King to grant liberties and privileges to certain persons to the hindrance of the due execution of the laws,
procuring offices for persons who were unfit, and unworthy of them and squandering away the public
treasure, browbeating witnesses and commenting on their credibility, cursing and drinking to excess, thereby
bringing the highest scandal on the public justice of the kingdom, and failure to conduct himself on the most
distinguished principles of good faith, equity, moderation, and mildness. 120
While heavily influenced by the British concept of impeachment, the United States of America made
significant modifications from its British counterpart. Fundamentally, the framers of the United States
visualized the process as means to hold accountable its public officials, as can be gleaned from their basic
law:
The President, Vice-President, and all civil Officers of the United States, shall be removed from Office on
Impeachment for, and Conviction of, treason, Bribery, or other High Crimes and Misdemeanors. 121
Other noted differences from the British process of impeachment include limiting and specifying the
grounds to "treason, Bribery, or other High Criines and Misdemeanors", and punishing the offender with
removal and disqualification to hold public office instead of death, forfeiture of property and corruption of
blood.122
In the Philippines, the earliest record of impeachment in our laws is from the 1935
Constitution.123 Compared to the US Constitution, it would appear that the drafters of the 1935 Constitution
further modified the process by making impeachment applicable only to the highest officials of the country;
providing "culpable violation of the Constitution" as an additional ground, and requiring two-thirds vote of
the House of Representatives to impeach and three-fourths vote of the Senate to convict.
As currently worded, our 1987 Constitution, in addition to those stated in the 1935 basic law, provided
another additional ground to impeach highranking public officials: "betrayal of public trust". Commissioner
Rustico De los Reyes of the 1986 Constitutional Commission explained this ground as "catch-all phrase to
include all acts which are not punishable by statutes as penal offenses but, nonetheless, render the officer
unfit to continue in office. It includes betrayal of public interest, inexcusable negligence of duty, tyrannical
abuse of power, breach of official duty by malfeasance or misfeasance, cronyism, favoritism, etc. to the
prejudice of public interest and which tend to bring the office into disrepute." 124
From the foregoing, it is apparent that although the concept of impeachment has undergone various
modifications to suit different jurisdictions and government forms, the consensus seems to be that it is
essentially political process meant to vindicate the violation of the public's trust. Buckner Melton, in his
book The First Impeachment: The Constitutions Framers and the Case of Senator William Blount, succintly
opined:
Practically all who have written on the subject agree that impeachment involves protection of public interest,
incorporating public law element, much like criminal proceeding....[I]mpeachment is process instigated by
the government, or some branch thereof, against person who has somehow harmed the government or the
community. The process, moreover, is adversarial in nature and resembles, to that extent, judicial trial. 125
Quo warranto
The oft-cited origin of quo warranto was the reign of King Edward of England who questioned the local
barons and lords who held lands or title under questionable authority. After his return from his crusade in
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Palestine, he discovered that England had fallen because of ineffective central administration by his
predecessor, King Henry III.126 The inevitable result was that the barons, whose relations with the King were
governed on paper by Magna Carta, assumed to themselves whatever power the King's officers had
neglected. Thus, King Edward deemed it wise to inquire as to what right the barons exercised any power
that deviated in the slightest from normal type of feudalism that the King had in mind. The theory is that
certain rights are regalia and can be exercised only upon showing of actual grants from the King or his
predecessor. Verily, King Edward's purpose was to catalogue the rights, properties and possessions of the
kingdom in his efforts to restore the same.
In the Philippines, the remedies against usurpers of public office appeared in the 1900s, through Act No.
190.127 Section 197 of the Act provides for provision comparable to Section 1, Rule 66 of the Rules of
Court:
Sec. 197. Usurpation of an Office or Franchise A civil action may be brought in the name of the
Government of the Philippine Islands:
1. Against person who usurps, intrudes into, or unlawfully holds or exercises public civil office or
franchise within the Philippine Islands, or an office in corporation created by the authority of the
Government of the Philippine Islands;
2. Against public civil officer who does or suffers an act which, by the provisions of law, works
forfeiture of his office;
3. Against an association of persons who act as corporation within the Philippine Islands, without
being legally incorporated or without lawful authority so to act.
Based from the foregoing, it appears that impeachment is proceeding exercised by the legislative, as
representatives of the sovereign, to vindicate the breach of the trust reposed by the people in the hands of the
public officer by determining the public officer's fitness to stay in the office. Meanwhile, an action for quo
warranto, involves judicial determination of the eligibility or validity of the election or appointment of
public official based on predetermined rules.
Quo warranto and impeachment can proceed independently and simultaneously
Aside from the difference in their origin and nature, quo warranto and impeachment may proceed
independently of each other as these remedies are distinct as to (1) jurisdiction (2) grounds, (3) applicable
rules pertaining to initiation, filing and dismissal, and (4) limitations.
The term "quo warranto" is Latin for "by what authority."128 Therefore, as the name suggests, quo
warranto is writ of inquiry.129 It detennines whether an individual has the legal right to hold the public office
he or she occupies.130
In review, Section 1, Rule 66 of the Rules of Court provides:
Action by Government against individuals. An action for the usurpation of public office, position or
franchise may be commenced by verified petition brought in the name of the Republic of the Philippines
against:
(a) person who usurps, intrudes into, or unlawfully holds or exercises public office, position or franchise;
(b) public officer who does or suffers an act which, by the provision of law, constitutes ground for the
forfeiture of his office; or
(c) An association which acts as corporation within the Philippines without being legally incorporated or
without lawful authority so to act.
Thus, quo warranto proceeding is the proper legal remedy to determine the right or title to the contested
public office or to oust the holder from its enjoyment. In quo warranto proceedings referring to offices filled
by election, what is to be determined is the eligibility of the candidates elected, while in quo
warranto proceedings referring to offices filled by appointment, what is determined is the legality of the
appointment.
The title to public office may not be contested collaterally but only directly, by quo warranto proceedings.
In the past, the Court held that title to public office cannot be assailed even through mandamus or motion to
annul or set aside order.131 That quo warranto is the proper legal vehicle to directly attack title to public
office likewise precludes the filing of petition for prohibition for purposes of inquiring into the validity of
the appointment of public officer. Thus, in Nacionalista Party v. De Vera,132 the Court held:
"[T]he writ of prohibition, even when directed against persons acting as judges or other judicial officers,
cannot be treated as substitute for quo warranto or be rightfully called upon to perform any of the functions
of the writ. If there is court, judge or officer de facto, the title to the office and the right to act cannot be
questioned by prohibition. If an intruder takes possession of judicial office, the person dispossessed cannot
obtain relief through writ of prohibition commanding the alleged intruder to cease from performing judicial
acts, since in its very nature prohibition is an improper remedy by which to determine the title to an
office."133
As earlier discussed, an action for quo warranto may be commenced by the Solicitor General or public
prosecutor, or by any person claiming to be entitled to the public office or position usurped or unlawfully
held or exercised by another.134
That usurpation of public office is treated as public wrong and carries with it public interest in our
jurisdiction is clear when Section 1, Rule 66 provides that where the action is for the usurpation of public
office, position or franchise, it shall be commenced by verified petition brought in the name of the Republic
of the Philippines through the Solicitor General or public prosecutor. 135
Nonetheless, the Solicitor General, in the exercise of sound discretion, may suspend or turn down the
institution of an action for quo warranto where there are just and valid reasons. Upon receipt of case
certified to him, the Solicitor General may start the prosecution of the case by filing the appropriate action in
court or he may choose not to file the case at all. The Solicitor General is given permissible latitude within
his legal authority in actions for quo warranto, circumscribed only by the national interest and the
government policy on the matter at hand.136
The instance when an individual is allowed to commence an action for quo warranto in his own name is
when such person is claiming to be entitled to public office or position usurped or unlawfully held or
exercised by another.137Feliciano v. Villasin138 reiterates the basic principle enunciated in Acosta v.
Flor139that for quo warranto petition to be successful, the private person suing must show no less than clear
right to the contested office.
In case of usurpation of public office, when the respondent is found guilty of usurping, intruding into, or
unlawfully holding or exercising public office, position or franchise, the judgment shall include the
following:
(a) the respondent shall be ousted and excluded from the office;
(b) the petitioner or relator, as the case may be, shall recover his costs; and
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(c) such further judgment determining the respective rights in and to the public office, position or franchise
of all the parties to the action as justice requires.140
The remedies available in quo warranto judgment do not include correction or reversal of acts taken under
the ostensible authority of an office or franchise. Judgment is limited to ouster or forfeiture and may not be
imposed retroactively upon prior exercise of official or corporate duties.141
Quo warranto and impeachment are, thus, not mutually exclusive remedies and may even proceed
simultaneously. The existence of other remedies against the usurper does not prevent the State from
commencing quo warranto proceeding.142
Respondent's Reply/Supplement to the Memorandum Ad Cautelam specifically tackled the objection to the
petition on the ground of forum shopping: Essentially, respondent points out that the inclusion of the matter
on tax fraud, which will further be discussed below, is already covered by Article of the Articles of
Impeachment. Hence, respondent argues, among others, that the petition should be dismissed on the ground
of forum shopping.
Forum shopping is the act of litigant who repetitively availed of several judicial remedies in different courts,
simultaneously or successively, all substantially founded on the same transactions and the same essential
facts and circumstances, and all raising substantially the same issues, either pending in or already resolved
adversely by some other court, to increase his chances of obtaining favorable decision if not in one court,
then in another.143 Forum shopping originated as concept in private international law, where non-resident
litigants are given the option to choose the forum or place wherein to bring their suit for various reasons or
excuses, including to secure procedural advantages, to annoy and harass the defendant, to avoid
overcrowded dockets, or to select more friendly venue. 144 At present, our jurisdiction has recognized several
ways to commit forum shopping, to wit: (1) filing multiple cases based on the same cause of action and with
the same prayer, the previous case not having been resolved yet (where the ground for dismissal is litis
pendentia); (2) filing multiple cases based on the same cause of action and the same prayer, the previous
case having been finally resolved (where the ground for dismissal is res judicata); and (3) filing multiple
cases based on the same cause of action but with different prayers (splitting of causes of action, where the
ground for dismissal is also either litis pendentia or res judicata).145
We have already settled that the test for determining existence of forum shopping is as follows:
To determine whether party violated the rule against forum shopping, the most important factor to ask is
whether the elements of litis pendentia are present, or whether final judgment in one case will amount to res
judicata in another; otherwise stated, the test for determining forum shopping is whether in the two (or
more) cases pending, there is identity of parties, rights or causes of action, and reliefs
sought.146 (Emphasis ours)
Litis pendentia is Latin term, which literally means "a pending suit" and is variously referred to in some
decisions as lis pendens and auter action pendant. As ground for the dismissal of civil action, it refers to the
situation where two actions are pending between the same parties for the same cause of action, so that one of
them becomes unnecessary and vexatious. It is based on the policy against multiplicity of suits. Litis
pendentia requires the concurrence of the following requisites: (1) identity of parties, or at least such parties
as those representing the same interests in both actions; (2) identity of rights asserted and reliefs prayed for,
the reliefs being founded on the same facts; and (3) identity with respect to the two preceding particulars in
the two cases, such that any judgment that may be rendered in the pending case, regardless of which party is
successful, would amount to res judicata in the other case.147
On the other hand, res judicata or prior judgment bars subsequent case when the following requisites are
satisfied: (1) the former judgment is final; (2) it is rendered by court having jurisdiction over the subject
matter and the parties; (3) it is judgment or an order on the merits; (4) there is between the first and the
second actions identity of parties, of subject matter, and of causes of action. 148
Ultimately, what is critical is the vexation brought upon the courts and the litigants by party who asks
different courts to rule on the same or related causes and grant the same or substantially the same reliefs and
in the process creates the possibility of conflicting decisions being rendered by the different fora upon the
same issues.149
Guided by the foregoing, there can be no forum shopping in this case despite the pendency of the
impeachment proceedings before the House of Representatives, contrary to respondent's position.
The causes of action in the two proceedings are unequivocally different. In quo warranto, the cause of
action lies on the usurping, intruding, or unlawfully holding or exercising of public office, while in
impeachment, it is the commission of an impeachable offense. Stated in different manner, the crux of the
controversy in this quo warranto proceedings is the determination of whether or not respondent legally
holds the Chief Justice position to be considered as an impeachable officer in the first place. On the other
hand, impeachment is for respondent's prosecution for certain impeachable offenses. To be sure, respondent
is not being prosecuted herein for such impeachable offenses enumerated in the Articles of Impeachment.
Instead, the resolution of this case shall be based on established facts and related laws. Simply put, while
respondent's title to hold public office is the issue in quo warranto proceedings, impeachment necessarily
presupposes that respondent legally holds the public office and thus, is an impeachable officer, the only
issue being whether or not she committed impeachable offenses to warrant her removal from office.
Likewise, the reliefs sought in the two proceedings are different. Under the Rules on quo warranto, "when
the respondent is found guilty of usurping, intruding into, or unlawfully holding or exercising public office,
x x x, judgment shall be rendered that such respondent be ousted and altogether excluded therefrom, x x
x."150 In short, respondent in quo warranto proceeding shall be adjudged to cease from holding public office,
which he/she is ineligible to hold. On the other hand, in impeachment, conviction for the charges of
impeachable offenses shall result to the removal of the respondent from the public office that he/she is
legally holding.151 It is not legally possible to impeach or remove person from an office that he/she, in the
first place, does not and cannot legally hold or occupy.
In the said Reply/Supplement to the Memorandum Ad Cautelam, respondent advanced the argument that the
"impeachment proceeding" is different from the "impeachment case", the former refers to the filing of the
complaint before the Committee on Justice while the latter refers to the proceedings before the Senate.
Citing Francisco v. House of Representatives, respondent posits that the "impeachment proceeding" against
her is already pending upon the filing of the verified complaint before the House Committee on Justice
albeit the "impeachment case" has not yet started as the Articles of Impeachment has not yet been filed with
the Senate. Hence, in view of such proceeding before the Committee on Justice, the filing of the instant
petition constitutes forum shopping.
The difference between the "impeachment proceeding" and the "impeachment case" correctly cited by the
respondent, bolsters the conclusion that there can be no forum shopping. Indeed, the "impeachment
proceeding" before the House Committee on Justice is not the "impeachment case" proper. The
impeachment case is yet to be initiated by the filing of the Articles of Impeachment before the Senate. Thus,
at the moment, there is no pending impeachment case against the respondent.
The House Committee on Justice's determination of probable cause on whether the impeachment against the
respondent should go on trial before the Senate is akin to the prosecutor's determination of probable cause
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during the preliminary investigation in criminal case. In preliminary investigation, the prosecutor does not
determine the guilt or innocence of the accused; he does not exercise adjudication nor rule-making
functions. The process is merely inquisitorial and is merely means of discovering if person may be
reasonably charged with crime. It is not trial of the case on the merits and has no purpose except that of
determining whether crime has been committed and whether there is probable cause to believe that the
accused is guilty thereof.152 As such, during the preliminary investigation before the prosecutor, there is no
pending case to speak of yet. In fact, jurisprudence states that the preliminary investigation stage is not part
of the trial.153
Thus, at the time of the filing of this petition, there is no pending impeachment case that would bar the quo
warrranto petition on the ground of forum shopping.
In fine, forum shopping and litis pendentia are not present and final decision in one will not strictly
constitute as res judicata to the other. judgment in quo warranto case determines the respondent's
constitutional or legal authority to perform any act in, or exercise any function of the office to which he lays
claim;154 meanwhile judgment in an impeachment proceeding pertain to respondent's "fitness for public
office."155
Considering the legal basis and nature of an action for quo waranto, this Court cannot shirk from resolving
the instant controversy in view of the fact that respondent is an impeachable officer and/or in view of the
possibility of an impeachment trial against respondent.
Impeachment is not an exclusive remedy by which an invalidly appointed or invalidly elected
impeachable official may be removed from office
Respondent anchors her position that she can be removed from office only by impeachment on the Court's
ruling in Lecaroz v. Sandiganbayan,156Cuenco v. Fernan,157 In Re Gonzales,158Jarque v.
Desierto159 and Marcoleta v. Borra.160 It should be stressed, however, that none of these cases concerned the
validity of an impeachable officer's appointment. Lecaroz involved criminal charge against mayor before the
Sandiganbayan, while the rest were disbarment cases filed against impeachable officers principally for acts
done during their tenure in public office. Whether the impeachable officer unlawfully held his office or
whether his appointment was void was not an issue raised before the Court. The principle laid down in said
cases is to the effect that during their incumbency, impeachable officers cannot be criminally prosecuted for
an offense that carries with it the penalty of removal, and if they are required to be members of the
Philippine Bar to qualify for their positions, they cannot be charged with disbarment. The proscription does
not extend to actions assailing the public officer's title or right to the office he or she occupies. The ruling
therefore cannot serve as authority to hold that quo warranto action can never be filed against an
impeachable officer. In issuing such pronouncement, the Court is presumed to have been aware of its power
to issue writs of quo warrantounder Rule 66 of the Rules of Court.
Even the PET Rules expressly provide for the remedy of either an election protest or petition for quo
warranto to question the eligibility of the President and the Vice-President, both of whom are impeachable
officers. Following respondent's theory that an impeachable officer can be removed only through
impeachment means that President or Vice-President against whom an election protest has been filed can
demand for the dismissal of the protest on the ground that it can potentially cause his/her removal from
office through mode other than by impeachment. To sustain respondent's position is to render election
protests under the PET Rules nugatory. The Constitution could not have intended such absurdity since fraud
and irregularities in elections cannot be countenanced, and the will of the people as reflected in their votes
must be determined and respected. The Court could not, therefore, have unwittingly curtailed its own
judicial power by prohibiting quo warranto proceedings against impeachable officers.
Further, the PET Rules provide that petition for quo warranto, contesting the election of the President or
Vice-President on the ground of ineligibility or disloyalty to the Republic of the Philippines, may be filed by
any registered voter who has voted in the election concerned within ten (10) days after the proclamation of
the winner.161 Despite disloyalty to the Republic being crime against public order162 defined and penalized
under the penal code, and thus may likewise be treated as "other high crimes," 163 constituting an
impeachable offense, quo warranto as remedy to remove the erring President or Vice-President is
nevertheless made expressly available.
In fact, this would not be the first time the Court shall take cognizance of quo warranto petition against an
impeachable officer. In the consolidated cases of Estrada v. Desierto, et al. and Estrada v. Macapagal-
Arroyo,164 the Court took cognizance and assumed jurisdiction over the quo warranto petition filed against
respondent therein who, at the time of the filing of the petition, had taken an oath and assumed the Office of
the President. Petitioner therein prayed for judgment confinning him to be the lawful and incumbent
President of the Republic temporarily unable to discharge the duties of his office, and declaring respondent
to have taken her oath and to be holding the Office of the President, only in an acting capacity. In fact, in the
said cases, there was not even claim that respondent therein was disqualified from holding office and
accordingly challenged respondent's status as de jure 14th President of the Republic. By entertaining the quo
warranto petition, the Court in fact determined whether then President Estrada has put an end to his official
status by his alleged act of resignation.
Furthermore, the language of Section 2, Article XI of the Constitution does not foreclose quo
warranto action against impeachable officers. The provision reads:
Section 2. The President, the Vice-President, the Members of the Supreme Court, the Members of the
Constitutional Commissions, and the Ombudsman may be removed from office on impeachment for, and
conviction of, culpable violation of the Constitution, treason, bribery, graft and corruption, other high
crimes, or betrayal of public trust. All other public officers and employees may be removed from office as
provided by law, but not by impeachment. (Emphasis ours)
It is settled rule of legal hermeneutics that if the language under consideration is plain, it is neither necessary
nor permissible to resort to extrinsic aids, like the records of the constitutional convention, for its
interpretation.165
The provision uses the permissive term "may" which, in statutory construction, denotes discretion and
cannot be construed as having mandatory effect.166We have consistently held that the term "may" is
indicative of mere possibility, an opportunity or an option. The grantee of that opportunity is vested with
right or faculty which he has the option to exercise.167 An option to remove by impeachment admits of an
alternative mode of effecting the removal.
On this score, Burke Shartel in his work Federal Judges: Appointment, Supervision, and Removal: Some
Possibilities under the Constitution,168 makes an interesting and valid observation on parallel provision on
impeachment under the U.S. Constitution from which ours was heavily patterned:
x x x it is not reasonable to spell out of the express provisiOn for impeachment, an intention or purpose of
the framers to create an exclusive remedy. The common canon for interpreting legislation, expresio unius
excusio est alterius has no proper application to an express provision for one of several common-law
remedies. The express provision for removal by impeachment ought not to be taken as tacit prohibition of
removal by other methods when there are other adequate reasons to account for this express provision. The
main purpose of the framers of the Constitution in providing for impeachment was to supply legislative
check on the other departments of our government, and particularly on the chief executive. Without an
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express provision, impeachment would have been impliedly prohibited by the doctrine of separation of
powers. If this legislative check was desired, reservation in express words was essential. Another reason for
the express provisions on this subject was that the framers of the Constitution did not wish to make the
executive and judicial officers of our government completely dependent on Congress. They wanted to confer
only limited power of removal, and the desired limitations on the power to impeach had to be explicitly
stated. These two reasons explain the presence in the Constitution of the express provisions for
impeachment; it is not necessary to resort to any supposed intent to establish an exclusive method of
removal in order to account for them. On the contrary, logic and sound policy demand that the
Congressional power be construed to be concurrent, not an exclusive, power of removal.
We hold, therefore, that by its tenor, Section 2, Article XI of the Constitution allows the institution of quo
warranto action against an impeachable officer. After all, quo warranto petition is predicated on grounds
distinct from those of impeachment. The former questions the validity of public officer's appointment while
the latter indicts him for the so-called impeachable offenses without questioning his title to the office he
holds.
Further, that the enumeration of "impeachable offenses" is made absolute, that is, only those enumerated
offenses are treated as grounds for impeachment, is not equivalent to saying that the enumeration likewise
purport to be complete statement of the causes of removal from office. Shartel, above cited, eloquently
incites as follows:
x x x. There is no indication in the debates of the Convention that the framers of the Constitution intended at
this point to make complete statement of causes of removal from office. The emphasis was on the causes for
which Congress might remove executive and judicial officers, not on causes of removal as such. x x x How
then can the causes of removal by impeachment be construed as recital of the causes for which judges may
be removed? It is especially hard to see why the express provision for impeachment limited legislative
method of removing all civil officers for serious misconduct should be construed to forbid removal of judges
by judicial action on account of disability or any reasonable cause not proper ground for action by the
Houses of Congress.
Neither can the Court accept respondent's argument that the term "may" in Section 2, Article XI qualifies
only the penalty imposable at the conclusion of the impeachment trial, such that conviction may result in
lesser penalties like censure or reprimand. Section 3(7), Article XI of the Constitution specifies the penalty
of "removal from office" and "disqualification to hold any office under the Republic of the Philippines" in
impeachment cases.169 There is nothing in the said provision that deliberately vests authority on the
impeachment court to impose penalties lower than those expressly mentioned. Also, respondent has not
shown that such was authority was intended by the framers of the 1987 Constitution. The ultimate penalty of
removal is imposed owing to the serious nature of the impeachable offenses. This Court had occasion to
rule:
The task of the Court is rendered lighter by the existence of relatively clear provisions in the Constitution. In
cases like this, we follow what the Court, speaking through Mr. Justice (later, Chief Justice) Jose Abad
Santos stated in Gold Creek Mining Corp. v. Rodriguez, that:
The fundamental principle of constitutional construction is to give effect to the intent of the framers of the
organic law and of the people adopting it. The intention to which force is to be given is that which is
embodied and expressed in the constitutional provisions themselves.170 (Emphasis supplied)
To subscribe to the view that appointments or election of impeachable officers are outside judicial review is
to cleanse their appointments or election of any possible defect pertaining to the Constitutionally-prescribed
qualifications which cannot otherwise be raised in an impeachment proceeding.
The courts should be able to inquire into the validity of appointments even of impeachable officers. To hold
otherwise is to allow an absurd situation where the appointment of an impeachable officer cannot be
questioned even when, for instance, he or she has been determined to be of foreign nationality or, in offices
where Bar membership is qualification, when he or she fraudulently represented to be member of the Bar.
Unless such an officer commits any of the grounds for impeachment and is actually impeached, he can
continue discharging the functions of his office even when he is clearly disqualified from holding it Such
would result in permitting unqualified and ineligible public officials to continue occupying key positions,
exercising sensitive sovereign functions until they are successfully removed from office through
impeachment. This could not have been the intent of the framers of the Constitution.
We must always put in mind that public office is public trust. 171 Thus, the people have the right to have only
qualified individuals appointed to public' office. To construe Section 2, Article XI of the Constitution as
proscribing quo warranto petition is to deprive the State of remedy to correct "public wrong" arising from
defective or void appointments. Equity will not suffer wrong to be without remedy. Ubi jus ibi remedium.
Where there is right, there must be remedy.172
As respondent herself previously opined in one case: "Reason is the foundation of all legal interpretation,
including that of constitutional interpretation. And the most powerful tool of reason is reflecting on the
essence of things."173
The essence of quo warranto is to protect the body politic from the usurpation of public office and to ensure
that government authority is entrusted only to qualified individuals. Reason therefore dictates that quo
warranto should be an available remedy to question the legality of appointments especially of impeachable
officers considering that they occupy some of the highest-ranking offices in the land and are capable of
wielding vast power and influence on matters of law and policy.
At this juncture, it would be apt to dissuade and allay the fear that ruling on the availability of quo
warranto would allow the Solicitor General to "wield sword over our collective heads, over all our
individual heads, and on that basis, impair the integrity of the Couas court." 174
Such view, while not improbable, betrays fallacious and cynical view of the competence and
professionalism of the Solicitor General and the members, of this Court. It presupposes that members of this
Court are law offenders. It also proceeds from the premise that the Solicitor General is the Executive's pawn
in its perceived quest for "more friendly" Court. Verily, fear, particularly if unfounded, should not override
settled presumptions of good faith and regularity in the performance of official duties. This Court, absent
compelling proof to the contrary, has no basis to doubt the independence and autonomy of the Solicitor
General.175 It is worthwhile to note that while the Solicitor General has prerogative in the institution of an
action for quo warranto, its exercise of such discretion is nevertheless subject to the Court's review.
In Topacio v. Ong,176 this Court explained:
In the exercise of sound discretion, the Solicitor General may suspend or turn down the institution of an
action for quo warranto where there are just and valid reasons. Thus, in Gonzales v. Chavez, the Court
ruled:
Like the Attorney-General of the United States who has absolute discretion in choosing whether to prosecute
or not to prosecute or to abandon prosecution already started, our own Solicitor General may even dismiss,
abandon, discontinue or compromise suits either with or without stipulation with the other
party. Abandonment of case, however, does not mean that the Solicitor General may just drop it
without any legal and valid reasons, for the discretion given him is not unlimited. Its exercise must be,
not only within the parameters set by law but with the best interest of the State as the ultimate goal.
Upon receipt of case certified to him, the Solicitor General exercises his discretion in the management of the
case. He may start the prosecution of the case by filing the appropriate action in court or he may opt not to
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file the case at all. He may do everything within his legal authority but always conformably with the
national interest and the policy of the government on the matter at hand. (Emphasis ours)
Neither should it be forgotten that the Solicitor General is an officer of the Court, tasked "to share in the task
and responsibility of dispensing justice and resolving disputes;" therefore, he may be enjoined in the same
manner that special prosecutor was sought enjoined by this Court from committing any act which may tend
to "obstruct, pervert or impede and degrade the administration of justice."177 Either way, in the event
that quo warranto cases against members of the Judiciary inundate the courts' dockets, it does not follow
that the courts are powerless to shield its members against suits which are obviously lacking in merit, or
those merely intended to harass the respondent.
The Supreme Court's exercise of its jurisdiction over quo warranto petition is not violative of the doctrine
of separation of powers
Section 3(1) and 3(6), Article XI, of the Constitution respectively provides that the House of Representatives
shall have the exclusive power to initiate all cases of impeachment while the Senate shall have the sole
power to try and decide all cases of impeachment. Thus, there is no argument that the constitutionally-
defined instrumentality which is given the power to try impeachment cases is the Senate.
Nevertheless, the Court's assumption of jurisdiction over an action for quo warranto involving person who
would otherwise be an impeachable official had it not been for disqualification, is not violative of the core
constitutional provision that impeachment cases shall be exclusively tried and decided by the Senate.
Again, an action for quo warranto tests the right of person to occupy public position. It is direct proceeding
assailing the title to public office.178 The issue to be resolved by the Court is whether or not the defendant is
legally occupying public position which goes into the questions of whether defendant was legally appointed,
was legally qualified and has complete legal title to the office. If defendant is found to be not qualified and
without any authority, the relief that the Court grants is the ouster and exclusion of the defendant from
office.179 In other words, while impeachment concerns actions that make the officer unfit to continue
exercising his or her office, quo warranto involves matters that render him or her ineligible to hold the
position to begin with.
Given the nature and effect of an action for quo warranto, such remedy is unavailing to determine whether
or not an official has committed misconduct in office nor is it the proper legal vehicle to evaluate the
person's performance in the office. Apropos, an action for quo warranto does not try person's culpability of
an impeachment offense, neither does writ of quo warranto conclusively pronounce such culpability.
In Divinagracia v. Consolidated Broadcasting System, Inc.,180 the Court further explained the court's
authority to issue writ of quo warranto, as complementary to, and not violative of, the doctrine of separation
of powers, as follows:
And the role of the courts, through quo warranto proceedings, neatly complements the traditional
separation of powers that come to bear in our analysis. The courts are entrusted with the adjudication
of the legal status of persons, the final arbiter of their rights and obligations under law. The question
of whether franchisee is in breach of the franchise specially enacted for it by Congress is one
inherently suited to court of law, and not for an administrative agency, much less one to which no
such function has been delegated by Congress. In the same way that availability of judicial review over
laws does not preclude Congress from undertaking its own remedial measures by appropriately amending
laws, the viability of quo warranto in the instant cases does not preclude Congress from enforcing its
own prerogative by abrogating the legislative franchises of respondents should it be distressed enough
by the franchisees' violation of the franchises extended to them. (Emphasis ours)
Applying the ratio in Divinagracia, the Court's exercise of its jurisdiction over quo warranto proceedings
does not preclude Congress from enforcing its own prerogative of determining probable cause for
impeachment, to craft and transmit the Articles of Impeachment, nor will it preclude Senate from exercising
its constitutionally committed power of impeachment.
Indeed, respondent's case is peculiar in that her omission to file her SALN also formed part of the
allegations against her in the Verified Complaint for Impeachment. Verily, the filing of the SALN is
Constituional requirement, and the transgression of which may, in the wisdom of the impeachment court, be
interpreted as constituting culpable violation of the Constitution. But then, respondent, unlike the President,
the Vice-President, Members of the Constitutional Commissions, and the Ombudsman, apart from having to
comply with the Constitutional SALN requirement, also answers to the unique Constitutional qualification
of having to be person of proven competence, integrity, probity, and independence-qualifications not
expressly required by the fundamental law for the other impeachable officers. 181 And as will be extensively
demonstrated hereunder, respondent's failure to file her SALNs and to submit the same to the JBC go into
the very qualification of integrity. In other words, when Member of the Supreme Court transgresses the
SALN requirement prior to his or her appointment as such, he or she commits violation of the Constitution
and belies his or her qualification to hold the office. It is not therefore accurate to place Members of the
Supreme Court, such as, respondent, on absolutely equal plane as that of the other impeachable officers,
when more stringent and burdensome requirements for qualification and holding of office are expressly
placed upon them.
In the same vein, the fact that the violation of the SALN requirement formed part of the impeachment
complaint does not justify shifting responsibility to the Congress, no matter how noble the respondent and
the intervenors portray such act to be. The fact remains that the Republic raised an issue as to respondent's
eligibility to occupy the position of Chief Justice, an obviously legal question, which can be resolved
through review of jurisprudence and pertinent laws. Logic, common sense, reason, practicality and even
principles of plain arithmetic bear out the conclusion that an unqualified public official should be removed
from the position immediately if indeed Constitutional and legal requirements were not met or breached. To
abdicate from resolving legal controversy simply because of perceived availability of another remedy, in this
case impeachment, would be to sanction the initiation of process specifically intended to be long and
arduous and compel the entire membership of the Legislative branch to momentarily abandon their
legislative duties to focus on impeachment proceedings for the possible removal of public official, who at
the outset, may clearly be unqualified under existing laws and case law. Evidently, this scenario would
involve waste of time, not to mention unnecessary disbursement of public funds.
Further, as an impeachment court, the Senate is tribunal composed of politicians who are indubitably versed
in pragmatic decision making and cognizant of political repercussions of acts purported to have been
committed by impeachable officials.182 As representatives of the Filipino people, they determine whether the
purported acts of highest ranking officials of the country constitute as an offense to the citizenry. Following
this premise, the impeachment tribunal cannot be expected to rule on the validity or constitutionality of the
Chief Justice's appointment, nor can their ruling be of jurisprudential binding effect to this Court. To
authorize Congress. to rule on public officials' eligibility would disturb the system of checks and balances as
it would dilute the judicial power of courts, upon which jurisdiction is exclusively vested to rule on actions
for quo warranto.
Nevertheless, for the guidance of the bench and the bar, and to obliviate confusion in the future as to
when quo warranto as remedy to oust an ineligible public official may be availed of, and in keeping with the
Court's function of harmonizing the laws and the rules with the Constitution, the Court herein demarcates
that an act or omission committed prior to or at the time of appointment or election relating to an official's
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qualifications to hold office as to render such appointment or election invalid is properly the subject of quo
warranto petition, provided that the requisites for the commencement thereof are present. Contrariwise, acts
or omissions, even if it relates to the qualification of integrity, being continuing requirement but nonetheless
committed during the incumbency of validly appointed and/or validly elected official, cannot be the subject
of quo warranto proceeding, but of something else, which may either be impeachment if the public official
concerned is impeachable and the act or omission constitutes an impeachable offense, or disciplinary,
administrative or criminal action, if otherwise.
Judicial power versus Judicial restraint and fear of constitutional crisis
Judicial power is vested in one Supreme Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Govemment.183
In the presence of all the requisites184 for the Court's exercise of judicial review, there can be no doubt that
the exercise thereof is not discretionary upon the Court, nor dependent upon the whims and caprices of any
of its Members nor any of the parties. Even in cases rendered moot and academic by supervening events, the
Court nevertheless exercised its power of review on the basis of certain recognized exceptions. 185 Neither is
its exercise circumscribed by fear of displeasing co-equal branch of the government. Instead, the
Constitution makes it crystal clear that the exercise of judicial power is duty of the Court.
As such, the exercise of judicial power could never be made dependent upon the action or inaction of
another branch of the government. The exercise of judicial restraint on the ground that the Senate, sitting as
an impeachment court, has the sole power to try and decide all cases of impeachment, is thus misplaced.
For one, at the time of the filing of, and even during the pendency of the resolution of the instant petition, no
impeachment trial has been commenced by the Senate. In fact, it will be purely skeptical, nay lackadaisical,
on the part of the Court to assume, at the time the petition was filed, that the House of Representatives will
affirm favorable resolution with the Articles of Impeachment and that trial will eventually carry on.
For another, and as extensively discussed, the question of whether or not respondent usurped public office is
undoubtedly justiciable. Recall Francisco, Jr., v. House of Representatives:186
The exercise of judicial restraint over justiciable issues is not an option before this Court. Adjudication may
not be declined, because this Court is not legally disqualified. Nor can jurisdiction be renounced as there is
no other tribunal to which the controversy may be referred. Otherwise, this Court would be shirking from its
duty vested under Art. VIII, Sec. 1(2) of the Constitution. More than being clothed with authority thus, this
Court is duty-bound to take cognizance of the instant petitions. In the august words of amicus curiae Father
Bernas, jurisdiction is not just power; it is solemn duty which may not be renounced. To renounce it, even if
it is vexatious, would be dereliction of duty.
Thus, to exercise restraint in reviewing an impeachable officer's appointment is clear renunciation of judicial
duty. We have held that:
While an appointment is an essentially discretionary executive power, it is subject to the limitation that the
appointee should possess none of the disqualifications but all the qualifications required by law. Where the
law prescribes certain qualifications for given office or position, courts may determine whether the
appointee has the requisite qualifications, absent which, his right or title thereto may be declared
void.187 (Emphasis ours)
Clearly, an outright dismissal of the petition based on speculation that respondent will eventually be tried on
impeachment is clear abdication of the Court's duty to settle actual controversy squarely presented before it.
Indeed, the easiest way to lose power is to abdicate it.
Neither does the possibility of the occurrence of constitutional crisis reason for the Court to abandon its
positive constitutional duty to take cognizance of case over which it enjoys jurisdiction and is not otherwise
legally disqualified. constitutional crisis may arise from conflict over the determination by the independent
branches of government of the nature, scope and extent of their respective constitutional powers. Thus, there
can be no constitutional crisis where the Constitution itself provides the means and bases for the resolution
of the "conflict." To reiterate, the Court's exercise of jurisdiction over an action for quo warranto falls
within the ambit of its judicial power to settle justiciable issues or actual controversies involving rights
which are legally demandable and enforceable. In so doing, the Court is not arrogating upon itself the
Congress' power to determine whether an impeachable officer may be removed by impeachment or not,
which is political, rather than judicial, exercise.188
In fine, it is settled that jurisdiction is conferred by law. It cannot be waived by stipulation, by abdication or
by estoppel. Quo warranto proceedings are essentially judicial in character it calls for the exercise of the
Supreme Court's constitutional duty and power to decide cases and settle actual controversies. This
constitutional duty cannot be abdicated or transferred in favor of, or in deference to, any other branch of the
government including the Congress, even as it acts as an impeachment court through the Senate. As an
impeachment court, the Senate's jurisdiction and the effect of its pronouncement is as limited under the
Constitution it cannot rule on the constitutionality of an appointment of Member of the Supreme Court with
jurisprudential binding effect because rulings of the impeachment court, being political rather than judicial
body, do not form part of the laws of the land. Any attempt to derogate or usurp judicial power in the
determination of whether the respondent's appointment is constitutional or not will, in point of fact, amount
to culpable violation of the Constitution.
In the same breath, the Supreme Court cannot renege on its avowed constitutional duty and abdicate its
judicial power. To do so would similarly amount to culpable violation of the Constitution. Instead, this
Court asserts its judicial independence and equanimity to decide cases without fear or favor; without regard
as to party's power or weakness; without regard to personalities; all to the ultimate end that Our sacrosanct
oaths as magistrates of this Court, which We voluntarily imposed upon ourselves without any mental
reservation or purpose of evasion, to support and defend the Constitution and to obey the laws of the land,
are strongly and faithfully realized.
Seeking affirmative relief from the Court is tantamount to voluntary appearance
In repudiating the Court's jurisdiction over her person and over the subject matter, respondent harps on the
fact that as Chief Justice, she is an impeachable officer who may be removed only by impeachment by the
Senate constituted as an impeachment court. As extensively discussed, the Court maintains jurisdiction over
the present quo warranto proceedings despite respondent's occupation of an impeachable office, as it is the
legality or illegality of such occupation that is the subject matter of the instant petition. Further, respondent
cannot now be heard to deny the Court's jurisdiction over her person even as she claims to be an
impeachable official because respondent in fact invoked and sought affirmative relief from the Court by
praying for the inhibition of several Members of this Court and by moving that the case be heard on Oral
Arguments, albeit ad cautelam.
While mindful of Our ruling in La Naval Drug Corporation v. Court of Appeals,189 which pronounced that
party may file Motion to Dismiss on the ground of lack of jurisdiction over its person, and at the same time
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raise affirmative defenses and pray for affirmative relief without waiving its objection to the acquisition of
jurisdiction over its person, as well as Section 20, 190 Rule 15, this Court, in several cases, ruled that seeking
affirmative relief in court is tantamount to voluntary appearance therein. 191
Thus, in Philippine Commercial International Bank v. Dy Hong Pi,192 cited in NM Rotchschild Sons
(Australia) Limited v. Lepanto Consolidated Mining Company,193 wherein defendants filed Motion for
Inhibition without submitting themselves to the jurisdiction of this Court, We held:
Besides, any lingering doubts on the issue of voluntary appearance dissipate when the respondents' motion
for inhibition is considered. This motion seeks sole relief: inhibition of Judge Napoleon Inoturan from
further hearing the case. Evidently, by seeking affirmative relief other than dismissal of the case,
respondents manifested their voluntary submission to the court's jurisdiction. It is well-settled that the
active participation of party in the proceedings is tantamount to an invocation of the court's jurisdiction and
willingness to abide by the resolution of the case, and will bar said party from later on impugning the court's
jurisdiction. (Emphasis in the original)
Accordingly, We rule that respondent, by seeking affirmative relief, is deemed to have voluntarily submitted
to the jurisdiction of the Court. Following settled principles, respondent cannot invoke the Court's
jurisdiction on one hand to secure affirmative relief, and then repudiate that same jurisdiction after obtaining
or failing to obtain such relief.
II.
The Petition is Not Dismissible on the Ground of Prescription
Prescription does not lie against the State
The rules on quo warranto, specifically Section 11, Rule 66, provides:
Limitations. Nothing contained in this Rule shall be construed to authorize an action against public officer or
employee for his ouster from office unless the same be commenced within one (1) year after the cause of
such ouster, or the right of the petitioner to hold such office or position, arose; nor to authorize an
action for damages in accordance with the provisions of the next preceding section unless the same be
commenced within one (1) year after the entry of the judgment establishing the petitioner's right to the office
in question. (Emphasis supplied)
Since the 1960's the Court had explained in ample jurisprudence the application of the one-year prescriptive
period for filing an action for quo warranto.
In Bumanlag v. Fernandez and Sec. of Justice,194 the Court held that the one-year period fixed in then
Section 16, Rule 68 of the Rules of Court is condition precedent to the existence of the cause of action
for quo warranto and that the inaction of an officer for one year could be validly considered waiver of his
right to file the same.
In Madrid v. Auditor General and Republic,195 We held that person claiming to position in the civil service
must institute the proper proceedings to assert his right within the one-year period, otherwise, not only will
he be considered to have waived his right to bring action therefor but worse, he will be considered to have
acquiesced or consented to the very matter that he is questioning.
The Court explained in Madrid that the reason for setting prescriptive period is the urgency of the matter to
be resolved. The government must be immediately informed or advised if any person claims to be entitled to
an office or position in the civil service, as against another actually holding it, so that the government may
not be faced with the predicament of having to pay two salaries, one for the person actually holding the
office although illegally, and another for one not actually rendering service although entitled to do so. 196
In Torres v. Quintos,197 the Court further explained that public interest requires that the rights of public
office should be determined as speedily as practicable. We have also explained in Cristobal v. Melchor and
Arcala198 that there are weighty reasons of public policy and convenience that demand the adoption of such
limitation as there must be stability in the service so that public business may not be unduly retarded. 199
Distinctively, the petitioners in these cited cases were private individuals asserting their right of office,
unlike the instant case where no private individual claims title to the Office of the Chief Justice. Instead, it is
the government itself which commenced the present petition for quo warranto and puts in issue the
qualification of the person holding the highest position in the Judiciary.
Thus, the question is whether the one-year limitation is equally applicable when the petitioner is not mere
private individual pursuing private interest, but the government itself seeking relief for public wrong and
suing for public interest? The answer is no.
Reference must necessarily be had to Section 2, Rule 66 which makes it compulsory for the Solicitor
General to commence quo warranto action:
SEC. 2. When Solicitor General or public prosecutor must commence action. The Solicitor General or
public prosecutor, when directed by the President of the Philippines, or when upon complaint or otherwise
he has good reason to believe that any case specified in the preceding section can be established by
proof must commence such action. (Emphasis supplied)
In other words, when the Solicitor General himself commences the quo warranto action either (1) upon the
President's directive, (2) upon complaint or (3) when the Solicitor General has good reason to believe that
there is proof that (a) person usurps, intrudes into, or unlawfully holds or exercises public office, position or
franchise; (b) public officer does or suffers an act which is ground for the forfeiture of his office; or (c) an
association acts as corporation without being legally incorporated or without lawful authority so to act, he
does so in the discharge of his task and mandate to see to it that the best interest of the public and the
government are upheld. In these three instances, the Solicitor General is mandated under the Rules to
commence the necessary quo warranto petition.
That the present Rule 66 on quo warranto takes root from Act No. 160, which is legislative act, does not
give the one-year rule on prescription absolute application. Agcaoili v. Suguitan,200 squarely addressed this
non-absolute character of the one-year prescriptive period as follows:
x x x in re prescription or limitation of the action, it may be said that originally there was no limitation or
prescription of action in an action for quo warranto, neither could there be, for the reason that it was an
action by the Government and prescription could not be plead as defense to an action by the Government.
The ancient writ of quo warranto was high prerogative writ in the nature of writ of right by the King against
any one who usurped or claimed any office, franchise or liberty of the crown, to inquire by what authority
the usurper supported his claim, in order to determine the right. Even at the present time in many of the
civilized countries of the world the action is still regarded as prerogative writ and no limitation or
prescription is permitted to bar the action. As general principle it may be stated that ordinary statutes of
limitation, civil or penal, have no application to quo warranto proceeding brought to enforce public
right.
xxxx
In our opinion, even granting that section 216 is applicable to the appellant, the period of prescription had
not begun to run at the time of the commencement of the present action. He was justified in delaying the
commencement of his action until an answer to his protest had been made. He had right to await the
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answer to his protest, in the confident belief that it would be resolved in his favor and that action would be
unnecessary.201 (Citations omitted and emphasis ours)
Continuing, Agcaoili cites People ex rel. Moloney v. Pullmans Palace Car Co.,202 to emphasize that the
State is not bound by statute of limitations nor by the laches, acquiescence or unreasonable delay on the part
of its officers:
It is conceded, the state, acting in its character as sovereign, is not bound by any statute of limitations or
technical estoppel. It is urged, however, that in quo warranto, under the common-law rule, the courts, in the
exercise of their discretion to grant the writ or not, or upon final hearing, refused aid when the conditions
complained of had existed for number of years with knowledge on the part of the sovereign, and that the
provisions of 1 of chapter 112 of the Revised Statutes, entitled Quo Warranto, that leave to file the
information shall be given if the court or judge to whom the petition is presented shall be satisfied there is
probable cause for the proceeding, leave the court still possessed of power to consider upon the hearing, and
then apply the same doctrine of waiver and acquiescence. It is the general rule that laches, acquiescence,
or unreasonable delay in the performance of duty on the part of the officers of the state, is not
imputable to the state when acting in its character as sovereign. There are exceptions to this general rule,
but we are unable to see that the allegations of the plea bring the case within the principles of any such
exceptions.
Jurisprudence acros the United States likewise richly reflect that when the Solicitor General files quo
warranto petition in behalf of the people and where the interests of the public is involved, the lapse of time
presents no effective bar:
An information in the nature of quo warranto cannot be filed by private individual without leave, which the
court may, at its discretion, either grant or refuse. To regulate their discretion as affected by the lapse of
time, the English courts adopted the rule which we have stated. But the Attorney General, representing the
Crown in England and the State in this country, may file an information in the nature of quo warranto,
without leave, according to his own discretion; and we find no English law which holds that an
information, so filed, can be barred by the lapse of six years independently of any statute to that effect. x x x
The Attorney General being public officer, may be presumed to be capable of salutary and reasonable
discretion, as well as the court, and when, acting in behalf of the State, he deems it his duty to prosecute for
forfeiture, it is not for the court, in the absence of any statutory limitation, to say he is too late. Indeed this
court has itself decided that, after the information has once been filed, its discretion ceases, and it has then
nothing to do but administer the law the same as in any other case. 203 (Citations omitted)
In People v. Bailey:204
Appellant claims that the action is barred by the provisions of the statute of limitations. x x x x We are of the
opinion that the established rule of law, as to the statute of limitations and its bearing upon cases of this
character, is correctly stated in the quotations above made and "that the attorney general may file the
information on behalf of the people at any time, and that lapse of time constitutes no bar to the
proceeding." The law, in thus permitting the attorney-general, either upon his own information or upon the
information of private party, to file an information at any time against one who has unlawfully intruded into
and is holding public office, does not place the courts or private parties in much danger of having to deal
with stale claims. The action can only be brought with the consent and permission of the attorney-
general of the state, and, it is to be assumed, he will not permit the institution of such suit, if by reason
of great lapse of time the claim has become stale, or for any other reason the state has ceased to have
present interest in it. (Citations omitted)
People v. Bailey quotes McPhail v. People ex rel. Lambert,205 as follows:
We do not consider this quo warranto proceeding, prosecuted by the state's attorney, for the purpose of
ousting one charged with wrongfully and without authority of law exercising the office, jurisdiction and
powers of police magistrate, as simply civil remedy, for the protection of private rights only. Police
magistrates are public officers, that are provided for in the constitution of the state; and by that instrument
the judicial powers of the state are, in part, vested in them. The office of police magistrate is one in which
the state and the general public have deep interest, and the jurisdiction attached to it is uniform with that
belonging to the office of justice of the peace. It is matter of public concern to the people of the state, and
against their peace and dignity, that any one should unlawfully, and without authority of right, exercise the
jurisdiction, powers and functions of such office, and also matter of interest to the state and to the general
public that more persons than the law authorizes are acting as police magistrates. In this country the rule is
that the attorney general or state's attorney may file the information in behalf of the people, where the
interests of the general public are involved, at any time, and that, in conformity with the maxim,
'Nullum tempus occurrit regi,' lapse of time constitutes no bar to the proceeding. (Citations omitted)
Aptly, in State ex rel Stovall v. Meneley,206 it was held that quo warranto action is governmental function
and not propriety function, and therefore the doctrine of laches does not apply:
Governmental functions are those performed for the general public with respect to the common welfare for
which no compensation or particular benefit is received. x x x Quo warranto proceedings seeking ouster
of public official are governmental function. (Citations and annotations omitted) No statute of
limitations is, therefore, applicable. The district court did not err in denying Meneley's motion to dismiss
based on the statute of limitations. x x x x
The doctrine of laches, furthermore, does not apply when cause of action is brought by the State seeking to
protect the public. (Citations and annotations omitted) x x x Having already noted that the quo
warranto action is governmental function and not propriety function, we hold the district court did not err in
denying Meneley's motion to dismiss on the basis of laches.
In fact, liberal interpretation to quo warranto provisions is sanctioned given that its primary purpose is to
ascertain whether one is constitutionally authorized to hold office. State ex rel Anaya v.
McBride207 elucidates:
Since the Constitution provides for separate and equal branches of government in New Mexico, any
legislative measure which affects pleading, practice or procedure in relation to power expressly vested by
the Constitution in the judiciary, such as quo warranto, cannot be deemed binding. We cannot render
inoperative clause in the Constitution on so slender reed. One of the primary purposes of quo warranto is
to ascertain whether one is constitutionally authorized to hold the office he claims, whether by election
or appointment, and we must liberally interpret the quo warranto statutes to effectuate that purpose.
Indeed, when the government is the real party in interest, and is proceeding mainly to assert its rights, there
can be no defense on the ground of laches or prescription.208 Indubitably, the basic principle that
"prescription does not lie against the State" which finds textual basis under Article 1108 (4) 209 of the Civil
Code, applies in this case.
Circumstances obtaining in this case preclude the application of the prescriptive period
That prescription does not lie in this case can also be deduced from the very purpose of an action for quo
warranto. People v. City Whittier,210 explains that the remedy of quo warranto is intended to prevent
continuing exercise of an authority unlawfully asserted. Indeed, on point is People v. Bailey,211 when it ruled
that because quo warranto serves to end continuous usurpation, no statute of limitations applies to the
action. Needless to say, no prudent and just court would allow an unqualified person to hold public office,
much more the highest position in the Judiciary.
In fact, in Cristobal, the Court considered certain exceptional circumstances which took the case out of the
statute of limitations, to wit: (1) there was no acquiescence to or inaction on the part of the petitioner,
amounting to the abandonment of his right to the position; (2) it was an act of the government through its
responsible officials which contributed to the delay in the filing of the action; and (3) the petition was
grounded upon the assertion that petitioner's removal from the questioned position was contrary to law.
324
In this case, the Republic cannot be faulted for questioning respondent's qualification for office only upon
discovery of the cause of ouster.
As will be demonstrated hereunder, respondent was never forthright as to whether or not she filed her
SALNs covering the period of her employment in U.P. Recall that during her application for the Chief
Justice position, the JBC required the submission of her previous SALNs. In response to the JBC,
respondent never categorically stated that she filed the required SALNs. Instead, she cleverly hid the fact of
non-filing by stating that she should not be required to submit the said documents as she was considered to
be coming from private practice; that it was not feasible to retrieve most of her records in the academe
considering that the same are more than fifteen years old; and that U.P. already cleared her of "all
academic/administrative responsibilities, money and property accountabilities and from administrative
charges as of June 1, 2006"212 in Clearance213 dated September 19, 2011.
Even up to the present, respondent has not been candid on whether she filed the required SALNs or not.
While respondent stated in her Comment that she filed the required SALNs when she was still connected
with the U.P. College of Law,214 she again offered as support the U.P. Clearance above-cited; that she was
considered as coming from private practice when she was nominated as Associate Justice of the Supreme
Court, hence, should not be required to submit those SALNs; and that it was not feasible for her to retrieve
said SALNs from U.P. as her records therein are more than 15 years old. Notably, these are mere reiterations
of her representations before the JBC.
Hence, until recently when respondent's qualification for office was questioned during the hearings
conducted by the House Committee on Justice on the impeachment complaint against the respondent, there
was no indication that would have prompted the Republic to assail respondent's appointment, much less
question the wisdom or reason behind the said recommending and appointing authorities' actions. The defect
on respondent's appointment was therefore not discernible, but was, on the contrary, deliberately rendered
obscure.
Given the foregoing, there can be no acquiescence or inaction, in this case, on the part of the Republic as
would amount to an abandonment of its right to seek redress against public wrong and vindicate public
interest. Neither can delay be attributed to the Republic in commencing the action since respondent
deliberately concealed the fact of her disqualification to the position. Prescription, therefore, cannot be
pleaded against the Republic.
Neither can respondent successfully invoke Act No. 3326 215 as mentioned in her Table of
Authorities.216 Respondent refers to Section 1217 thereof which provides for the prescriptive periods for
violations penalized by special acts and municipal ordinances. Plainly, Act No. 3326 is inapplicable to the
instant petition as respondent is not being sought to be penalized for violation of the laws relating to the non-
filing or incomplete, irregular or untruthful filing of SALNs. At any rate, even the theorized applicability of
Act No. 26 will not work to respondent's advantage given that Section 2 218 thereof provides that the
prescriptive period shall be reckoned either from the day of the commission of the violation of the law, or if
such be not known at the time, from the discovery thereof and the institution of the judicial proceeding for
its investigation and punishment.
Finally, it bears to stress that this Court finds it more important to rule on the merits of the novel issues
imbued with public interest presented before Us than to dismiss the case outright merely on technicality. The
Court cannot compromise on the importance of settling the controversy surrounding the highest position in
the Judiciary only to yield to the unacceptable plea of technicality. It is but more prudent to afford the
Republic, as well as the respondent, ample opportunities to present their cases for proper and just disposition
of the case instead of dismissing the petition outright on the ground of prescription. Inasmuch as the ultimate
consideration in providing for one-year prescriptive period was public interest, so is it the same
consideration which prompts this Court not to act nonchalantly and idly watch title to the public office in
question be continuously subjected to uncertainty. Indeed, dismissal of cases on technicality is frowned
upon especially where public interest is at the other end of the spectrum.
III.
Respondent is Ineligible as Candidate and Nominee for the Position of Chief Justice
To arrive at judicious appreciation of the parties' respective contentions as to respondent's qualification for
the position of Chief Justice, the Court first reviews the supervisory authority exercised by it over the JBC,
and visits the JBC's rules and procedure relating to the acceptance and nomination of respondent as Chief
Justice.
A.
The Court Exercises Supervisory Authority Over the JBC
The Court's supervisory authority over the JBC includes ensuring that the JBC complies with its own
rules
Section 8(1), Article VIII of the Constitution provides:
A Judicial and Bar Council is hereby created under the supervision of the Supreme Court, composed
of the Chief Justice as ex officioChairman, the Secretary of Justice, and representative of the Congress as ex
officio Members, representative of the Integrated Bar, professor of law, retired Member of the Supreme
Court, and representative of the private sector. (Emphasis ours)
Ambil, Jr. v. Sandiganbayan, et al.,219 elucidates on the power of supervision in general:
On the other hand, the power of supervision means "overseeing or the authority of an officer to see to it that
the subordinate officers perform their duties." If the subordinate officers fail or neglect to fulfill their duties,
the official may take such action or step as prescribed by law to make them perform their duties. Essentially,
the power of supervision means no more than the power of ensuring that laws are faithfully executed, or that
subordinate officers act within the law. The supervisor or superintendent merely sees to it that the rules are
followed, but he does not lay down the rules, nor does he have discretion to modify or replace them. 220
Reflective of the above and similar pronouncements,221 the seminal case of Jardeleza v. Chief Justice Ma.
Lourdes P. A. Sereno, et al.,222 explains that the power of supervision being power of oversight does not
authorize the holder of the supervisory power to lay down the rules nor to modify or replace the rules of its
subordinate. If the rules are, however, not or improperly observed, then the supervising authority may order
the work be done or redone, but only for the purpose of conforming to such rules.
Thus, in interpreting the power of the Court vis-a-vis the power of the JBC, it is consistently held that the
Court's supervisory power consists of seeing to it that the JBC complies with its own rules and procedures.
As when the policies of the JBC are being attacked, the Court, through its supervisory authority over the me,
has the duty to inquire about the matter and ensure that the JBC is compliant with its own rules. 223
The JBC occupies unique position in the body of government. While the JBC is created by the Constitution,
the Constitution itself prescribes that it exists as an office subordinate to the Supreme Court. Thus, under the
Constitution, the JBC is chaired by the Chief Justice of the Supreme Court and it is the Supreme Court that
determines the emoluments of the regular JBC members and provides for the appropriations of the me in its
annual budget.224
The Constitution also vests upon the JBC the principal function of recommending appointees to the
325
Judiciary and such other functions and duties as the Supreme Court may assign to it.225 On this, Justice
Arturo Brion, in his Concurring and Dissenting Opinion in De Castro v. Judicial and Bar Council, et
al.,226offers succinct point:
Under this definition, the Court cannot dictate on the JBC the results of its assigned task, i.e., who to
recommend or what standards to use to determine who to recommend. It cannot even direct the JBC on
how and when to do its duty, but it can, under its power of supervision, direct the JBC to "take such
action or step as prescribed by law to make them perform their duties," if the duties are not being
performed because of JBC's fault or inaction, or because of extraneous factors affecting performance.
Note in this regard that, constitutionally, the Court can also assign the JBC other functions and duties
a power that suggests authority beyond what is purely supervisory. 227 (Emphasis ours)
JBC's absolute autonomy from the Court as to place its non-action or improper actions beyond the latter's
reach is therefore not what the Constitution contemplates.
What is more, the JBC's duty to recommend or nominate, although calling for the exercise of discretion, is
neither absolute nor unlimited.
In Villanueva v. Judicial and Bar Council,228 this Court explained that while certain leeway must be given to
the JBC in screening aspiring magistrates, the same does not give it an unbridled discretion to ignore
Constitutional and legal requirements:
The functions of searching, screening, and selecting are necessary and incidental to the JBC's principal
function of choosing and recommending nominees for vacancies in the Judiciary for appointment by the
President. However, the Constitution did not lay down in precise terms the process that the JBC shall follow
in determining applicants' qualifications. In carrying out its main function, the JBC has the authority to
set the standards/criteria in choosing its nominees for every vacancy in the Judiciary, subject only to
the minimum qualifications required by the Constitution and law for every position. The search for
these long held qualities necessarily requires degree of flexibility in order to determine who is most fit
among the applicants. Thus, the JBC has sufficient but not unbridled license to act in performing its
duties.
JBC's ultimate goal is to recommend nominees and not simply to fill up judicial vacancies in order to
promote an effective and efficient administration ofjustice.229 (Emphasis ours)
So too, the JBC's exercise of discretion is not automatically equivalent to an exercise of policy decision as to
place, in wholesale, the JBC process beyond the scope of the Comi's supervisory and corrective powers. The
primary limitation to the JBC's exercise of discretion is that the nominee must possess the minimum
qualifications required by the Constitution and the laws relative to the position. While the resolution of who
to nominate as between two candidates of equal qualification cannot be dictated by this Court upon the JBC,
such surrender of choice presupposes that whosoever is nominated is not otherwise disqualified. The
question of whether or not nominee possesses the requisite qualifications is determined based on facts and
therefore does not depend on, nor call for, the exercise of discretion on the part of the nominating body.
Thus, along this line, the nomination by the JBC is not accurately an exercise of policy or wisdom as to
place the JBC's actions in the same category as political questions that the Court is barred from resolving.
Questions of policy or wisdom refer "to those questions which, under the Constitution, are to be decided by
the people in their sovereign capacity, or in regard to which full discretionary authority has been delegated
to the legislative or executive branch of government."230
Baker v. Carr231 gives the classic definition of political question:
x x x [p]rominent on the surface of ruiy case held to involve political question is found textually
demonstrable constitutional commitment of the issue to coordinate political department; or lack of judicially
discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial
policy determination of kind clearly for non-judicial discretion; or the impossibility of court's undertaking
independent resolution without expressing lack of the respect due coordinate branches of government; or an
unusual need for unquestioning adherence to political decision already made; or the potentiality of
embarrassment from multifarious pronouncements by various departments on the one question.
Obviously, the exercise of the JBC's discretion in the nomination process is not full as it is limited by the
requirements prescribed by the Constitution and the laws for every position. It does not involve aquestion of
policy but simply determination, based on facts, of whether candidate possesses the requisite qualifications
or not. The JBC neither assumes an existence separate from the Judiciary as it is not intended to be an
independent Constitutional body but merely Constitutional office created and expressly subjected to the
Court's supervision. Judicial encroachment upon the exercise of wisdom of co-equal branch of the
government, which is the very basis of the political question doctrine, is therefore not attendant when the
Court supervises and reviews the action of the JBC which is neither an executive nor legislative branch
enjoying independent political prerogatives.
In fine, the Court has authority, as an incident of its power of supervision over the JBC, to insure that the
JBC faithfully executes its duties as the Constitution requires of it. Wearing its hat of supervision, the Court
is thus empowered to inquire into the processes leading to respondent's nomination for the position of Chief
Justice on the face of the Republic's contention that respondent was ineligible to be candidate to the position
to begin with.
Qualifications under the Constitution cannot be waived or bargained away by the JBC
As emphasized, the JBC's exercise of discretion is limited by the Constitution itself when it prescribed the
qualifications absolutely required of person to be eligible for appointment as Member of the Court.
The qualifications of an aspiring Member of the Supreme Court are enshrined in Section 7, Article VIII of
the Constitution:
SECTION 7. (1) No person shall be appointed Member of the Supreme Court or any lower collegiate court
unless he is natural-born citizen of the Philippines. A Member of the Supreme Court must be at least forty
years of age, and must have been for fifteen years or more judge of lower court or engaged in the practice of
law in the Philippines.
(2) The Congress shall prescribe the qualifications of judges of lower courts, but no person may be
appointed judge thereof unless he is citizen of the Philippines and member of the Philippine Bar.
(3) Member of the Judiciary must be person of proven competence, integrity, probity, and independence.
(Emphasis ours)
Evidently, more than age, citizenship and professional qualifications, Our fundamental law is clear that
member of the Judiciary must be person of proven competence, integrity, probity and independence. The
inclusion of subsection is explained in this wise:
xxxx
MR. NOLLEDO. Thank you, Mr. Presiding Officer.
My amendment is to add new subsection (3) on Section which reads: MEMBER OF THE Judiciary MUST
BE PERSON OF PROVEN COMPETENCE, INTEGRITY, PROBITY, AND INDEPENDENCE.
Before the Committee decides on whether or not to accept the amendment, would like to explain it first.
326
Mr. Presiding Officer, this is moral provision lifted with modifications from the "Canons of Judicial Ethics."
The reputation of our justices and judges has been unsavory. hate to say this, but it seems that it has become
the general rule that the members of the Judiciary are corrupt and the few honest ones are the exceptions.
We hear of justices and judges who would issue injunctive relief to the highest bidder and would decide
cases based on hundreds of thousands, and even millions, mercenary reasons.
The members of the deposed Supreme Court, with few exceptions, catered to the political likings and
personal convenience of Mr. Marcos by despicably surrendering their judicial independence. Why should
we resist incorporating worthy moral principles in our fundamental law? Why should we canalize our
conservative thoughts within the narrow confines of pure legalism?
I plead to the members of the Committee and to my colleagues in this Constitutional Commission to support
my amendment in order to strengthen the moral fiber of our Judiciary. Let not our Constitution be merely
legal or political document. Let it be moral document as well.
x x x232
Requirement of these traits stems from the need to ensure the strength and sustainability of the third branch
of the government. Caperton v. A.T. Massey Coal Co., Inc.,233 sufficiently explains the state interest
involved in safeguardingjudicial integrity:
Courts, in our system, elaborate principles of law in the course of resolving disputes. The power and the
prerogative of court to perform this function rest, in the end, upon the respect accorded to its judgments. The
citizen's respect for judgments depends in turn upon the issuing court's absolute probity. Judicial integrity is,
in consequence, state interest of the highest order.
An approximation of what defines the term "integrity" was made by the Court in Jardeleza, as follows:
In the performance of this sacred duty, the JBC itself admits, as stated in the "whereas clauses" of JBC-009,
that qualifications such as "competence, integrity, probity and independence are not easily determinable as
they are developed and nurtured through the years." Additionally, "it is not possible or advisable to lay down
iron-clad rules to determine the fitness of those who aspire to become Justice, Judge, Ombudsman or Deputy
Ombudsman." Given this realistic situation, there is need "to promote stability and uniformity in JBC's
guiding precepts and principles." set of uniform criteria had to be established in the ascertainment of
"whether one meets the minimum constitutional qualifications and possesses qualities of mind and heart
expected of him" and his office. Likewise for the sake of transparency of its proceedings, the JBC had put
these criteria in writing, now in the form of JBC-009. True enough, guidelines have been set in the
determination of competence, "probity and independence," soundness of physical and mental condition, and
"integrity."
As disclosed by the guidelines and lists of recognized evidence of qualification laid down in JBC-009,
"integrity" is closely related to, or if not, approximately equated to an applicant's good reputation for
honesty, incorruptibility, irreproachable conduct, and fidelity to sound moral and ethical standards.
That is why proof of an applicant's reputation may be shown in certifications or testimonials from reputable
government officials and non-governmental organizations and clearances from the courts, National Bureau
of Investigation, and the police, among others. In fact, the JBC may even conduct discreet background check
and receive feedback from the public on the integrity, reputation and character of the applicant, the merits of
which shall be verified and checked. As qualification, the term is taken to refer to a virtue, such that,
"integrity is the quality of person's character."234 (Emphasis ours)
The case of Jardeleza, however, is not the first time this Court interpreted the requirement of integrity.
In Samson v. Judge Caballero,235 this Court dismissed judge for "obvious lack of integrity" in making false
statement in his Personal Data Sheet (PDS). Meanwhile, in Re: Judge Jaime V. Quitain,236 this Court
declared Judge Quitain to be dishonest and lacking in integrity when he failed to disclose in his PDS that he
was imposed penalty of dismissal from service in an administrative case filed against him.
Emphatically, integrity is not only prerequisite for an aspirng Member of the Court but is likewise
continuing requirement common to judges and lawyers alike. Canon of the New Code of Judicial
Conduct237 provides:
CANON 2
INTEGRITY
Integrity is essential not only to the proper discharge of the judicial office but also to the personal demeanor
of judges.
SECTION 1. Judges shall ensure that not only is their conduct above reproach, but that it is perceived to be
so in the view of reasonable observer.
SEC. 2. The behavior and conduct of judges must reaffirm the people's faith in the integrity of the Judiciary.
Justice must not merely be done but must also be seen to be done.
SEC. 3. Judges should take or initiate appropriate disciplinary measures against lawyers or court personnel
for unprofessional conduct of which the judge may have become aware.
The Code of Professional Responsibility, equally applicable to respondent being first and foremost lawyer,
mince no words in requiring that lawyer shall perform his profession in manner compatible with the
integrity of the profession, thus:
CANON - LAWYER SHALL MAKE HIS LEGAL SERVICES AVAILABLE IN AN EFFICIENT AND
CONVENIENT MANNER COMPATIBLE WITH THE INDEPENDENCE, INTEGRITY AND
EFFECTIVENESS OF THE PROFESSION.
Rule 2.01 A lawyer shall not reject, except for valid reasons, the cause of the defenseless or the oppressed.
Rule 2.02 In such cases, even if the lawyer does not accept case, he shall not refuse to render legal advice to
the person concerned if only to the extent necessary to safeguard the latter's rights.
Rule 2.03 A lavvyer shall not do or permit to be done any act designed primarily to solicit legal business.
Rule 2.04 A lawyer shall not charge rates lower than those customarily prescribed unless the circumstances
so warrant.
xxxx
CANON - LAWYER SHALL AT ALL TIMES UPHOLD THE INTEGRITY AND DIGNITY OF THE
LEGAL PROFESSION AND SUPPORT THE ACTIVITIES OF THE INTEGRATED BAR.
Rule 7.01 A lawyer shall be answerable for knowingly making false statement or suppressing material fact
in connection with his application for admission to the bar.
Rule 7.02 A lawyer shall not support the application for admission to the bar of any person known by him to
be unqualified in respect to character, education, or other relevant attribute.
327
Rule 7.03 A lawyer shall not engage in conduct that adversely reflects on his fitness to practice law, nor
shall he whether in public or private life, behave in scandalous manner to the discredit of the legal
profession.
It is also important to note that the Court has always viewed integrity with goal of preserving the confidence
of the litigants in the Judiciary. In Edaño v. Judge Asdala,238 this Court stated that:
The New Code of Judicial Conduct for the Philippine Judiciary mandates that judges must not only maintain
their independence, integrity and impartiality; but they must also avoid any appearance of impropriety or
partiality, which may erode the peoples faith in the Judiciary. Integrity and impartiality, as well as the
appearance thereof, are deemed essential not just in the proper discharge of judicial office, but also to the
personal demeanor of judges. This standard applies not only to the decision itself, but also to the process by
which the decision is made. Section 1, Canon 2, specifically mandates judges to ensure that not only is their
conduct above reproach, but that it is perceived to be so in the view of reasonable observers. Clearly, it is of
vital importance not only that independence, integrity and impartiality have been observed by judges
and reflected in their decisions, but that these must also appear to have been so observed in the eyes of
the people, so as to avoid any erosion of faith in the justice system. Thus, judges must be circumspect in
their actions in order to avoid doubt and suspicion in the dispensation of justice. 239 (Emphasis ours)
To make sure that applicants to judicial posttwns possess these constitutionally-prescribed character
requirement, the JBC was created. Jardeleza captures the purpose of the JBC which it finds to be rooted in
the categorical constitutional declaration that "[a] member of the Judiciary must be person of proven
competence, integrity, probity, and independence." To ensure the fulfillment of these standards in every
member of the Judiciary, the JBC has been tasked to screen aspiring judges and justices, among others,
making certain that the nominees submitted to the President are all qualified and suitably best for
appointment. Jardeleza continues that, in this manner, the appointing process itself is shielded from the
possibility of extending judicial appointment to the undeserving and mediocre and, more importantly, to the
ineligible or disqualified.
Thus, in compliance with their mandate, the JBC provided for Rule on Integrity in JBC-009 Rules,240 as
follows:
RULE 4
INTEGRITY
Section 1. Evidence of Integrity The council shall take every possible step to verify the applicants records
and of reputation for honesty, integrity, incorruptibility, irreproachable conduct and fidelity to sound moral
and ethical standards. For this purpose, the applicant shall submit to the council certifications or testimonials
thereof from reputable government officials and non-governmental organizations, and clearances from the
court National Bureau of Investigation, police, and from such other agencies as the council may require.
Section 2. Background Check The Council may order discrete [sic] background check on the integrity,
reputation and character of the applicant, and receive feedback thereon from the public, which it shall check
or verify to validate the means thereof.
Section 3. Testimonies of Parties The Council may receive written opposition to an applicant on ground of
his moral fitness and its discretion, the Council may receive the testimony of the oppositor at hearing
conducted for the purpose, with due notice to the applicant who shall be allowed to be [sic] cross-examine
the opposite and to offer countervailing evidence.
Section 4. Anonymous Complaints Anonymous complaints against an applicant shall not be given due
course, unless there appears on its face probable cause sufficient to engender belief that the allegations may
be true. In the latter case the Council may either direct discrete [sic] investigation or require the applicant to
comment thereon in writing or during the interview.
Section 5. Disqualification The following are disqualified from being nominated for appointment to any
judicial post or as Ombudsman or Deputy Ombudsman:
1. Those with pending criminal or regular administrative cases;
2. Those with pending criminal cases in foreign courts or tribunals; and
3. Those who have been convicted in any criminal case; or in administrative case, where the penalty
imposed is at least fine or more than P10,000, unless has been granted judicial clemency.
Section 6. Other instances of disqualification Incumbent judges, officials or personnel of the Judiciary who
are facing administrative complaints under informal preliminary investigation (IPI) by the Office of the
Court of Administrator may likewise be disqualified from being nominated if, in the determination of the
Council, the charges are serious or grave as to affect the fitness of the applicant for nomination.
For purpose of this Section and of the preceding Section in so far as pending regular administrative cases are
concerned, the Secretary of the Council shall, from time to time, furnish the Office of the Court of
Administrator the name of an applicant upon receipt of the application/recommendation and completion of
the required papers; and within ten days from the receipt thereof the Court Administrator shall report in
writing to the Council whether or not the applicant is facing regular administrative case or an IPI case and
the status thereof. In regard to the IPI case, the Court Administrator shall attach to his report copies of the
complaint and the comment of the respondent.
B.
Compliance with the Constitutional and statutory requirement of filing of SALN intimately relates to
person's integrity.
Respondent postulates that the filing of SALNs bear no relation to the Constitutional qualification of
integrity. In so arguing, respondent loses sight of the fact that the SALN requirement is imposed no less than
by the Constitution and made more emphatic by its accompanying laws and its implementing rules and
regulations. In other words, one who fails to file his or her SALN violates the Constitution and the laws; and
one who violates the Constitution and the laws cannot rightfully claim to be person of integrity as such
equation is theoretically and practically antithetical.
We elaborate:
The filing of SALN is Constitutional and statutory requirement
The filing SALN is an essential requirement to one's assumption of public post. It has Constitutional, legal
and jurisprudential bases.
Of paramount significance, Section 17, Article XI of the Constitution on the Accountability of Public
Officers states:
Section 17. public officer or employee shall, upon assumption of office and as often thereafter as may
be required by law, submit declaration under oath of his assets, liabilities, and net worth. In the case of
the President, the Vice-President, the Members of the Cabinet, the Congress, the Supreme Court, the
Constitutional Commissions and other constitutional offices, and officers of the armed forces with general or
flag rank, the declaration shall be disclosed to the public in the manner provided by law. (Emphasis ours)
328
However, even prior to the 1987 Constitution, and as early as 1960, our laws through R.A. No. 3019,
required from every public officer detailed and sworn statement of their assets and liabilities, thus:
SECTION 7. Statement of assets and liabilities. Every public officer, within thirty days after assuming
office, thereafter, on or before the fifteenth day of April following the close of every calendar year, as well
as upon the expiration of his term of office, or upon his resignation or separation from office, shall prepare
and file with the office of the corresponding Department Head, or in the case of Head of department or
Chief of an independent office, with the Office of the President, true, detailed sworn statement of assets and
liabilities, including statement of the amounts and sources of his income, the amounts of his personal and
family expenses and the amount of income taxes paid for the next preceding calendar year: Provided, That
public officers assuming office less than two months before the end of the calendar year, may file their first
statement on or before the fifteenth day of April following the close of the said calendar year.
SECTION 8. Prima facie evidence of and dismissal due to unexplained wealth. If in accordance with the
provisions of Republic Act Numbered One thousand three hundred seventy-nine, public official has been
found to have acquired during his incumbency, whether in his name or in the name of other persons, an
amount of property and/or money manifestly out of proportion to his salary and to his other lawful income,
that fact shall be ground for dismissal or removal. Properties in the name of the spouse and dependents of
such public official may be taken into consideration, when their acquisition through legitimate means cannot
be satisfactorily shown. Bank deposits in the name of or manifestly excessive expenditures incurred by the
public official, his spouse or any of their dependents including but not limited to activities in any club or
association or any ostentatious display of wealth including frequent travel abroad of non-official character
by any public official when such activities entail expenses evidently out of proportion to legitimate income,
shall likewise be taken into consideration in the enforcement of this section, notwithstanding any ovision of
law to the contrary. The circumstances hereinabove mentioned shall constitute valid ground for the
administrative suspension of the public official concerned for an indefinite period until the investigation of
the unexplained wealth is completed.
Respondent herself, in her Dissenting Opinion in Phil. Savings Bank v. Senate Impeachment
Court241 interprets that "failure to comply" with the law is "prima facie evidence of unexplained wealth,
which may result in the dismissal from service of the public officer."
In 1961, R.A. No. 3019 was amended by R.A. No. 3047 242 by specifying the period within which public
official should make the disclosure and enumerating certain public officials who are exempt from the
requirement.
Even during the martial law years, under then President Marcos, the obligation imposed upon public officers
and employees to declare their assets and liabilities was maintained under Presidential Decree (P.D.) No.
379243 but with the curious addition that the filing and submission of SALN are now to be required from all
citizens, subject to few exceptions. P.D. No. 379 was later on amended by P.D. No. 417 244 which amended
the contents of the statement and the manner of providing the acquisition cost of the properties. Yet still,
P.D. No. 379 was further amended by P.D. No. 555, 245 which prescribed stiffer penalties for violation
thereof.
Two years after the birth of the 1987 Constitution, R.A. No. 6713 or the Code of Conduct and Ethical
Standards for Public Officials and Employees246 was enacted and thereby expanded the obligation to
disclose by enumerating the information required to be disclosed as regards the assets, liabilities, business
interests and financial connections; requiring the identification and disclosure of relatives in government;
making the statements and disclosures available and accessible to the public; and prohibiting certain acts.
In particular, Sections and 11 of R.A. No. 6713 provide:
Section 8. Statements and Disclosure. Public officials and employees have an obligation to accomplish and
submit declarations under oath of, and the public has the right to know, their assets, liabilities, net worth and
financial and business interests including those of their spouses and of unmarried children under eighteen
(18) years of age living in their households.
(A) Statements of Assets and Liabilities and Financial Disclosure.
- All public officials and employees, except those who serve in an honorary capacity, laborers and casual or
temporary workers, shall file under oath their Statement of Assets, Liabilities and Net Worth and Disclosure
of Business Interests and Financial Connections and those of their spouses and unmarried children under
eighteen (18) years of age living in their households.
The two documents shall contain information on the following:
(a) real property, its improvements, acquisition costs, assessed value and current fair market value;
(b) personal property and acquisition cost;
(c) all other assets such as investments, cash on hand or in banks, stocks, bonds, and the like;
(d) liabilities, and;
(e) all business interests and financial connections.
The documents must be filed:
(a) within thirty (30) days after assumption of office;
(b) on or before April 30, of every year thereafter; and
(c) within thirty (30) days after separation from the service.
All public officials and employees required under this section to file the aforestated documents shall also
execute, within thirty (30) days from the date of their assumption of office, the necessary authority in favor
of the Ombudsman to obtain from all appropriate government agencies, including the Bureau of Internal
Revenue, such documents as may show their assets, liabilities, net worth, and also their business interests
and financial connections in previous years, including, if possible, the year when they first assumed any
office in the Government.
Husband and wife who are both public officials or employees may file the required statements jointly or
separately.
The Statements of Assets, Liabilities and Net Worth and the Disclosure of Business Interests and Financial
Connections shall be filed by:
(1) Constitutional and national elective officials, with the national office of the Ombudsman;
(2) Senators and Congressmen, with the Secretaries of the Senate and the House of Representatives,
respectively; Justices, with the Clerk of Court of the Supreme Court; Judges, with the Court Administrator;
and all national executive officials with the Office of the President.
(3) Regional and local officials and employees, with the Deputy Ombudsman in their respective regions;
329
(4) Officers of the armed forces from the rank of colonel or naval captain, with the Office of the President,
and those below said ranks, with the Deputy Ombudsman in their respective regions; and
(5) All other public officials and employees, defined in Republic Act No. 3019, as amended, with the Civil
Service Commission.
(B) Identification and disclosure of relatives. It shall be the duty of every public official or employee to
identify and disclose, to the best of his knowledge and information, his relatives in the Government in the
form, manner and frequency prescribed by the Civil Service Commission.
(C) Accessibility of documents. (1) Any and all statements filed under this Act, shall be made available for
inspection at reasonable hours.
(2) Such statements shall be made available for copying or reproduction after ten (10) working days from
the time they are filed as required by law.
(3) Any person requesting copy of statement shall be required to pay reasonable fee to cover the cost of
reproduction and mailing of such statement, as well as the cost of certification.
(4) Any statement filed under this Act shall be available to the public for period of ten (10) years after
receipt of the statement. After such period, the statement may be destroyed unless needed in an ongoing
investigation.
(D) Prohibited acts. It shall be unlawful for any person to obtain or use any statement filed under this Act
for:
(a) any purpose contrary to morals or public policy; or
(b) any commercial purpose other than by news and communications media for dissemination to the general
public.
xxxx
Section 11. Penalties. (a) Any public official or employee, regardless of whether or not he holds office or
employment in casual, temporary, holdover, permanent or regular capacity, committing any violation of this
Act shall be punished with fine not exceeding the equivalent of six (6) months salary or suspension not
exceeding one (1) year, or removal depending on the gravity of the offense after due notice and hearing by
the appropriate body or agency. If the violation is punishable by heavier penalty under another law, he shall
be prosecuted under the latter statute. Violations of Sections 7, or of this Act shall be punishable with
imprisonment not exceeding five (5) years, or fine not exceeding five thousand pesos (P5,000), or both, and,
in the discretion of the court of competent jurisdiction, disqualification to hold public office.
(b) Any violation hereof proven in proper administrative proceeding shall be sufficient cause for removal or
dismissal of public official or employee, even if no criminal prosecution is instituted against him.
xxxx
The filing of the SALN is so important for purposes of transparency and accountability that failure to
comply with such requirement may result not only in dismissal from the public service but also in criminal
liability. Section of R.A. No. 3019, as amended provides:
Section 9. Penalties for violations. x x x
(b) Any public officer violating any of the provisions of Section of this Act shall be punished by fine of not
less than one thousand pesos nor more than five thousand pesos, or by imprisonment not exceeding one year
and six months, or by both such fine and imprisonment, at the discretion of the Court.
The violation of said section proven in proper administrative proceeding shall be sufficient cause for
removal or dismissal of public officer, even if no criminal prosecution is instituted against him.
Bolh Section of R.A. No. 6713 and Section of R.A. No. 3019 require the accomplishment and submission of
true, detailed and sworn statement of assets and liabilities. 247 Further, under Section 11 of R.A. No. 6713,
non-compliance with this requirement is not only punishable by imprisonment and/or fine, it may also result
in disqualification to hold public office. As the Court explained in Hon. Casimiro, et al. v. Rigor:248
x x x The requirement of filing SALN is enshrined in the Constitution to promote transparency in the civil
service and serves as deterrent against government officials bent on enriching themselves through unlawful
means. By mandate of law, every government official or employee must make complete disclosure of his
assets, liabilities and net worth in order to avoid any issue regarding questionable accumulation of wealth.
The importance of requiring the submission of complete, truthful, and sworn SALN as measure to defeat
corruption in the bureaucracy cannot be gainsaid. Full disclosure of wealth in the SALN is necessary to
particularly minimize, if not altogether eradicate, the opportunities for official corruption, and maintain
standard of honesty in the public service. Through the SALN, the public can monitor movement in the
fortune of public official; it serves as valid check and balance mechanism to verify undisclosed properties
and wealth. The failure to file truthful SALN reasonably puts in doubts the integrity of the officer and
normally amounts to dishonesty.249
As respondent acutely relates her dissent in Philippine Savings Bank:250
In the present case, because of the fact that the Chief Justice is public officer, he is constitutionally and
statutorily mandated to perform positive duty to disclose all of his assets and liabilities. This already
operates as the consent required by law.
The Offices of the Chief Justice and of the 14 Associate Justices of the Supreme Court are an express
creation of the Constitution, which vests them with explicit powers necessary for the proper functioning of
democratic government.
Foremost is the principle that public office is by virtue of the peoples mandate to exercise sovereign function
of the government. Hence, public office is public trust or agency. Appended to the constitutional principle
that public office is public trust is the tenet that public officers occupy very delicate positions that exact
certain standards generally not demanded from or required of ordinary citizens.
Those who accept public office do so cum onere, or with burden, and are considered as accepting its burdens
and obligations, together with its benefits. They thereby subject themselves to all constitutional and
legislative provisions relating thereto, and undertake to perform all the duties of their office. The public has
the right to demand the performance of those duties.
One of these burdens or duties is explicitly articulated in Sec. 17 of Art. XI of the 1987 Constitution, viz:
xxxx
This provision reqmres all public officers and employees, regardless of rank, to declare their assets and
liabilities upon their assumption of office, as may be required by law. However, it likewise imposes positive
duty and heavier onus on the President; the Vice-President; and members of the Cabinet, Congress, the
Supreme Court, Constitutional Commissions and other Constitutional offices and officers of the Armed
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Forces with general or flag ranks to publicly disclose their assets and liabilities. 251 (Citations omitted and
emphasis in the original)
Faithful compliance with the requirement of the filing of SALN is rendered even more exacting when the
public official concerned is member of the Judiciary. In Office of the Court Administrator v. Judge
Usman,252 the Court emphasized:
From the foregoing, it is imperative that every public official or government employee must make and
submit complete disclosure of his assets, liabilities and net worth in order to suppress any questionable
accumulation of wealth. This serves as the basis of the government and the people in monitoring the income
and lifestyle of public officials and employees in compliance with the constitutional policy to eradicate
corruption, to promote transparency in government, and to ensure that all government employees and
officials lead just and modest lives, with the end in view of curtailing and minimizing the opportunities for
official corruption and maintaining standard of honesty in the public service.
In the present case, respondent clearly violated the abovequoted laws when he Jailed to file his SALN
for the years 2004-2008. He gave no explanation either why he failed to file his SALN for five (5)
consecutive years. While every office in the government service is public trust, no position exacts
greater demand on moral righteousness and uprightness of an individual than seat in the Judiciary.
Hence, judges are strictly mandated to abide with the law, the Code of Judicial Conduct and with
existing administrative policies in order to maintain the faith of our people in the administration of
justice.253 (Emphasis ours)
The above holds necessarily true considering that the obligation of members of the Judiciary to file their
respective SALNs is not only statutory requirement but forms part of the mandatory conduct expected of
judge so that an "honorable competent and independent Judiciary exists to administer justice and thus
promote the unity of the country, the stability of government, and the well-being of the people."254
The Code of Judicial Conduct, in no uncertain terms, provide:
FINANCIAL ACTIVITIES
RULE 5.02 A judge shall refrain from financial and business dealing that tend to reflect adversely on the
court's impartiality, interfere with the proper performance of judicial activities or increase involvement with
lawyers or persons likely to come before the court. judge should so manage investments and other financial
interests as to minimize the number of cases giving grounds for disqualifications.
xxxx
FINANCIAL DISCLOSURE
RULE 5.08 A judge shall make full financial disclosure as required by law. (Emphasis ours)
xxxx
Compliance with the SALN requirement indubitably reflects on person's integrity
To recapitulate, Section 7, Article VIII of the Constitution requires that member of the Judiciary must be of
proven integrity. To be of proven integrity means that the applicant must have established steadfast
adherence to moral and ethical principles.255
The necessity of having integrity among the members of the judiciary is clearly discussed in
the Commentary on the Bangalore Principles of Judicial Conduct:256
Integrity is the attribute of rectitude and righteousness. The components of integrity are honesty and judicial
morality. judge should always, not only in the discharge of official duties, act honourably and in manner
befitting the judicial office; be free from fraud, deceit and falsehood; and be good and virtuous in behaviour
and in character. There are no degrees of integrity as so defined. Integrity is absolute. In the judiciary,
integrity is more than virtue; it is necessity.
Failure to file the SALN is clearly violation of the law. The offense is penal in character and is clear breach
of the ethical standards set for public officials and employees. It disregards the requirement of transparency
as deterrent to graft and corruption. For these reasons, public official who has failed to comply with the
requirement of filing the SALN cannot be said to be of proven integrity and the Court may consider him/her
disqualified from holding public office. In De Castro v. Field Investigation Office, Office of the
Ombudsman,257 We held:
Public service demands the highest level of honesty and transparency from its officers and employees. The
Constitution requires that all public officers and employees be, at all times, accountable to the people; serve
with utmost responsibility, integrity, loyalty and efficiency; act with patriotism and justice; and lead modest
lives. Public office is public trust; it must be treated as privilege rather than right, and rest firmly upon one's
sense of service rather than entitlement. In this light, the Court deems it necessary to reiterate, as final note,
its pronouncement in Casimiro v. Rigor:
The constitutionalization of public accountability shows the kind of standards of public officers that are
woven into the fabric of our legal system. To reiterate, public office is public trust, which embodies set of
standards such as responsibility, integrity and efficiency. Unfortunately, reality may sometimes depart from
these standards, but our society has consciously embedded them in our laws so that they may be demanded
and enforced as legal principles, and the Court is mandated to apply these principles to bridge actual reality
to the norms envisioned for our public service.
The requirement to file SALN is not trivial or formal requirement. Neither is it something over which public
officials can exercise discretion. It is mandated by Our Constitution and laws. It is meant to forge
transparency and accountability in the government and as measure meant to curb corruption. This is dear
from the policy of R.A. No. 6713:
Section 2. Declaration of Policies. It is the policy of the State to promote high standard of ethics in public
service. Public officials and employees shall at all times be accountable to the people and shall discharge
their duties with utmost responsibility, integrity, competence, and loyalty, act with patriotism and justice,
lead modest lives, and uphold public interest over personal interest.
Respondent nevertheless argues that the filing of SALN has no relation to an applicant's integrity, moral
fitness or character. She cites the cases of Office of the Ombudsman v. Racho,258Daplas v. Department of
Finance and the Office of the Ombudsman,259Atty. Navarro v. Office of the Ombudsman and Department of
Finance-Revenue Integrity Protection Services,260 to support her argument that in order to establish lack of
integrity, there is an additional requirement that there must be showing that there is an intent to commit
wrong.261
It is inaccurate to use the aforesaid cases to support respondent's conclusion that her integrity is not affected
by her failure to file SALNs.
In Office of the Ombudsman v. Racho,262 the Court upheld the Ombudsman's finding that Racho is guilty of
dishonesty for unexplained wealth. The Court, in that case, noted that Racho's SALN did not reflect the
aggregate amount of his bank deposits.
In Daplas v. Department of Finance and the Office of the Ombudsman,263 this Court merely held therein
petitioner Daplas guilty of simple negligence instead of dishonesty and grave misconduct for her failure to
declare several real and personal properties in her SALN. The Court found that "petitioner's failure to
declare the Galant sedan in her SALNs from 1997 to 2003 stemmed from the fact that the same was
registered in her husband's name, and purportedly purchased out of his personal money".
Meanwhile, in Navarro v. Office of the Ombudsman and Department of Finance-Revenue Integrity
331
Protection Service,264 this Court exonerated Atty. Navarro of dishonesty, grave misconduct and violation of
R.A. No. 6713. The Court ruled, in that case, that the properties not reflected in therein petitioner's SALN
were rightfully excluded as they do not actually belong to him. This Court even noted therein that the SALN
before 2011 merely required general statement of one's assets and liabilities.
It is apparent from the foregoing that the above mentioned cases are factually different from the instant
petition. The aforesaid jurisprudence, aside from determining the administrative liability of therein public
employees, dealt with misdeclaration of assets or properties. Meanwhile, the instant petition questions
respondent's qualifications and as an incident thereto, the validity of the process leading to her appointment.
Further, the fundamental issue in the case at bar is not merely inaccurate entries, but the glaring absence of
respondent's SALN for various years prior to her resignation from the U.P. College of Law.
Respondent posits that person's failure to file SALN, without more, would not automatically negate
"integrity."265 It is respondent's theory that the failure to file SALN without any allegation or evidence that
one committed graft and corruption by acquiring unexplained wealth has no bearing on integrity.
Respondent's argument, however, does not persuade.
The SALN laws contemplate both the (1) physical act of filing her and her family's statement of assets,
liabilities and net worth and (2) filing of true, genuine and accurate SALN. RA 6713 and RA 3019, being
special laws that punish offenses, are malum prohibitum and not malum in se. Thus, it is the omission or
commission of that act as defined by the law, and not the character or effect thereof, that detennines whether
or not the provision has been violated. An act which is declared malum prohibitum renders malice or
criminal intent completely immaterial.266 Thus, whether or not respondent accumulated unexplained wealth
is not in issue at this point in time, but whether she, in the first place, complied with the mandatory
requirement of filing of SALNs. Worse, to subscribe to respondent's view means that the Court would
altogether be deprived of the opportunity to ascertain whether or not she accumulated unexplained wealth as
the tools for doing so, that is, the filed SALNs and the representations contained therein, are lacking.
Respondent chronically failed to file her SALNs and thus violated the Constitution, the law and the Code
of Judicial Conduct, member of the Judiciary who commits such violations cannot be deemed to be
person of proven integrity
To recall, the record of the U.P. HRDO only contains respondent's SALNs for the years 1985, 1990, 1991,
1993, 1994, 1995, 1996, 1997, and 2002. Later, respondent produced photocopy of her SALN for 1989 and
attached the same to her Ad Cautelam Manifestation/Submission. On the other hand, the records of the
Central Records Division of the Office of the Ombudsman yields "no SALN filed by respondent except for
the SALN ending December 1998" which was subscribed only in August 2003 and transmitted by the U.P.
HRDO to the Ombudsman only on December 16, 2003. Further, despite having worked as legal counsel for
the Republic from 2003 to 2006 (up until 2009), there is no record that respondent filed her SALNs for that
period.
Respondent could have easily dispelled doubts as to the filing or nonfiling of the unaccounted SALNs by
presenting them before the Court. Yet, respondent opted to withhold such information or such evidence, if at
all, for no clear reason. Respondent likewise manifests having been successful in retrieving most of the
"missing" SALNs and yet withheld presentation of such before the Court, except for photocopy of her 1989
SALN submitted only in the morning of the Oral Argument and allegedly sourced from the "drawers of
U.P." Only in respondent's Memorandum Ad Cautelam did she attach the SALNs she supposedly recovered.
But the SALNs so attached, except for the 1989 SALN, were the same SALNs priorly offered by the
Republic. Other than offering legal or technical justifications, respondent has not endeavored to convince
this Court of the existence of the still unaccounted SALNs. As she herself stated in her July 23, 2012 letter
to the JBC, only some, but not all, of her SALNs are infeasible to retrieve. Thus, this Court is puzzled as to
why there has been no account of respondent's more recent SALNs, particularly those from 2000, 2001,
2003, 2004, 2005 and 2006.
Instead, respondent layers her defenses as follows:
1. Invoking the so-called "Doblada doctrine", respondent maintains having filed all her SALNs.
Respondent firmly latches on to her allegation that she filed her SALNs, only that she has no records of the
same. It is, however, too shallow and impetuous for this Court to accept such excuse and disregard the
overwhelming evidence to the contrary.
Respondent urges the Court to apply in her favor the case of Concerned Taxpayer v. Doblada, Jr.,267 and
deem as sufficient and acceptable her statement that she "maintains that she consistently filed her SALNs."
Respondent argues that in Doblada, the Court gave no evidentiary value to the Office of the Court
Administrator's (OCA) report stating that branch Sheriff had failed to file his SALN for eighteen (18) years,
based only on contrary evidence presented by the respondent Sheriff that proves the existence of only one
(1) of his missing SALNs. According to respondent, the Court's rationale in Doblada that one cannot readily
conclude that respondent failed to file his sworn SALN simply because these documents are missing in the
OCA's files should likewise be made applicable to her case. Respondent thus concludes that the Republic
must categorically prove its allegation that respondent did not file her SALNs for all relevant years, and not
just show that the same are no longer on file with the relevant offices.
A more cerebral reading of Doblada, however, poses checkered differences to the case at bar.
To begin with, the Court imposed the ultimate penalty of dismissal, with forfeiture of all benefits and with
prejudice to re-employment in any branch or service of the government including government-owned and
controlled corporation against Doblada for his failure to declare true and detailed statement of his assets and
liabilities for the years 1974, 1976, 1989, 1991, 1993, 1995 and 1998. The pronouncement of the Court with
regard to the non-filing of his SALNs for several years was therefore not the basis for the imposition of the
appropriate penalty against Doblada.
The progenesis of Doblada's troubles was letter-complaint filed by concerned taxpayer with the
Ombudsman. The Ombudsman, in turn, referred the complaint to the OCA. Upon report and
recommendation of the OCA, the Court directed the National Bureau of Investigation (NBI) to conduct
discreet investigation of the case and thereafter, to submit report thereon. The NBI reported discrepancies in
Doblada's SALNs and his yearly salaries constituting prima facie evidence of unexplained wealth and
further stated that "[Doblada] also failed to submit his sworn statement of assets and liabilities for the years
1975 to 1988, 1990, 1992, 1994 and 1997 as said documents were not submitted to the NBI by the Records
Control Division of the Supreme Court." Thereafter, the case was referred to the OCA for evaluation, report
and recommendation.
Initially, the OCA reported that Doblada's records disclose that he had not been submitting his SALNs for
the years 1975, 1977 to 1988, 1990, 1992, 1999 and 2000. When asked to explain, Doblada maintains
having filed all his SALNs and admits that he does not have copies of said SALNs as he might have
accidentally disposed of the same during the various times that he transferred office. As proof, Doblada
submitted copy of letter dated May 7, 2001 sent by the Acting Branch Clerk of Court, stating therein that
attached to said letter are the sworn SAL[N] of the staff of RTC, Pasig City, Branch 155, including that of
332
respondent's, for the year 2000. Said letter was established to have been sent to and duly received by the
OCA, and yet Doblada's SALN for 2000 was one of those missing in the OCA's files.
It was factually established then that Doblada submitted his SALNs to the branch clerk of court, presumably
as the chief or head of the office. The head of the office then transmitted the original copy of the SALNs
received to the repository agency which, in Doblada's case, is the OCA. Thus, the OCA's report that
Doblada did not file his SALNs was rendered inaccurate by proof that Doblada, through the head of the
office, actually transmitted the required original copy of the 2000 SALN to the OCA.
Considering the contrary proof presented by Doblada in the form of the letter of the head of the personnel of
Branch 155 that the SALN for 2000 exists and was duly transmitted and received by the OCA as the
repository agency, te Court therein inferred that Doblada filed his SALNs.
In respondent's case, while the U.P. HRDO, as the concerned personnel division, produced respondent's
SALNs for 1985, 1989, 1990, 1991, 1993, 1994, 1995, 1996, 1997, and 2002, these very same SALNs
are neither proven to be in the records of, nor was proven to have been sent to and duly received by the
Ombudsman as the repository agency. Even then, the Court presently receives the certified copies of said
SALNs as evidence of the existence and the filing thereof.
Nevertheless, for the SALNs which the U.P. HRDO itself cannot produce, i.e., 1986, 1987, 1988, 1992,
1999, 2000, 2001, 2003, 2004, 2005 and 2006, and not proven to be in the records of, nor proven to have
been sent to and duly received by the Ombudsman, are altogether different matter. The existence of these
SALNs and the fact of filing thereof were neither established by direct proof constituting substantial
evidence nor by mere inference.
The Court in Doblada also gave the latter the benefit of the doubt considering the lack of the categorical
statement from the OCA, as the repository agency, that Doblada failed to file his SALN for the relevant
years. Te Court observed that the report of the OCA simply stated that "it does not have on its file the
subject SAL[N] of [Doblada]." Hence, the Court therein concluded that there was no substantial evidence to
show that Doblada failed to file his SALNs for the relevant years.
In stark contrast, the Certification of the Omdusman, as the repository agency in respondent's case, made the
categorical statement that "based on records on file, there is no SALN filed by [respondent] for calendar
years 1999 to 2009 except SALN ending December 1998 which was submitted to this Office on December
16, 2003."
Respondent, through counsel, attempts to mislead the Court as to the value of the Ombudsman's
Certification by re-directing Our attention to "handwritten certification"268 affixed by the SALN custodian of
the Ombudsman. Upon closer examination, the "handwritten certification" aside from having been "issued"
only on April 6, 2018 appears to have been made at the behest of respondent's counsel where the
handwritten words may have been tailor-fitted to suit respondent's theory. The signatory of the "handwritten
certification" is the same signatory as that of the Certification earlier issued by the Ombudsman, and thus the
former could not have possibly negated or altered the tenor of the latter. In any case, such "handwritten
certification" cannot eclipse Certification duly and officially issued by the Ombudsman in response to
subpoena issued by the Congress.
Thus, taking the undisputed pieces of evidence consisting of (1) the U.P. HRDO certifications proving that
respondent's SALNs for 1986, 1987, 1988, 1992, 1999, 2000, 2001, 2003, 2004, 2005 and 2006 are not in its
possession; and (2) the Ombudsman certification that based on its records, there is no SALN filed by
respondent except that for 1998; coupled with respondent's inability to show proof that these SALNs
actually exist and that these were actually transmitted to and duly received by the Ombudsman as the
repository agency, conclusively establish that for the years 1986, 1987, 1988, 1992, 1999, 2000, 2001, 2003,
2004, 2005 and 2006, respondent did not file her SALNs.
Otherwise stated, on the basis of the evidence on record and respondent's unexplained failure to support her
allegation of filing with substantial proof, the Court reaches the inevitable conclusion that the only SALNs
filed by respondent were those for the calendar years 1985, 1989, 1990, 1991, 1993, 1994, 1995, 1996,
1997, 1998, and 2002, or only eleven (11) SALNs out of her 20 years in U.P., or for even more ifher
engagement as legal counsel by the Republic and as Deputy Commissioner of the Commission on Human
Rights as lauded in respondent's PDS, are treated as government service.
It is for this reason that We hold that the Republic was able to discharge its burden of proof, and thus it
becomes incumbent upon respondent to discharge her burden of evidence. Sps. De Leon, et al., v. Bank of
the Philippine Islands269 offers distinction between burden of proof and burden of evidence:
Section 1, Rule 131 of the Rules of Court defines "burden of proof" as "the duty of party to present evidence
on the facts in issue necessary to establish his claim or defense by the amount of evidence required by
law." In civil cases, the burden of proof rests upon the plaintiff, who is required to establish his case by
preponderance of evidence. Once the plaintiff has established his case, the burden of evidence shifts to
the defendant, who, in turn, has the burden to establish his defense. 270 (Emphasis ours)
Further, the burden of proof in quo warranto proceeding is different when it is filed by the State. Floyd
Mechem in his book, entitled A Treatise on the Law of Public Offices and Officers,271 explains that when the
respondent is called upon at the suit of the State to show by what warrant he assumes to exercise the
functions of public office, the burden of proving his title rests upon the respondent. When, however, the
respondent has made out prima facie right to the office, it is only at that time that the burden of evidence
shifts to the State.272
Montgomery H. Throop adopted the same view as Mechem. Throop, in his book, entitled A Treatise on the
Law relating to Public Officers and Sureties in Official Bonds,273 states that upon the trial of an information
in the nature of quo warranto, the prosecutor is not required, in the first instance, to show want of title in the
person, against whom the information is exhibited. The burden is upon the respondent to establish good title;
he must establish the continued existence of every qualification, necessary to the continued holding of the
office, if any such qualifications exist. But where the respondent has shown good prima facie title, the
burden of proof is shifted to the prosecutor. 274
In this jurisdiction, Vicente J. Francisco wrote in his book the Revised Rules of Court in the
Philippines,275 that in quo warranto proceeding, the burden rests on the defendant or respondent, as against
the State at least, to show his right to the office from which it is sought to oust him. Moreover, since the
object of such proceedings is to test the actual right to the office, and not merely use color of right, it is
incumbent upon the respondent to show good legal title, and not merely colorable one, for he must rely
wholly on the strength of his own title.276
With the submission of its evidence, including the Certifications from the U.P. College of Law and the
Ombudsman showing that respondent did not file all her SALNs, the Republic has made out prima
facie case that respondent failed to comply with the SALN law. The duty or burden of evidence thus shifted
to respondent to controvert the Republic's prima facie case, otherwise, verdict must be returned in favor of
the Republic.277 However, what respondent merely offered in response to the Republic's evidence is an
unsubstantiated claim that she had filed all her SALNs. Without admissible documentary and testimonial
support, this bare and uncorroborated assertion scarcely overcomes the Republic's case.
333
2. Being on leave without pay exempts respondent from filing her SALNs.
Aside from maintaining that she filed all her SALNs, respondent layers her defenses by saying that her non-
filing of SALN is nevertheless excused because she was on leave from the U.P. College of Law during June
1, 1998 to October 16, 1998, June 1, 2000 to May 31, 2001, June 1, 2001 to May 31, 2002, November 1,
2003 to May 31, 2004, June 1, 2004 to October 31, 2004, February 11, 2005 to October 31, 2005 and
November 15, 2005 to May 31, 2006. However, per the Certification 278 issued by the U.P. HRDO dated
December 8, 2017, it appears that respondent filed her SALN for the year ending December 31, 2002, year
she was purportedly on leave. To this Court, respondent's own act of filing SALN in 2002 negates her
argument that being on leave excuses her from filing her SALN. As likewise pointed out during the Oral
Arguments,279 respondent, as regular faculty member, receives monthly compensation and from at least
January 2000 to May 2000 (when she was not on leave), she earned income and thus should have filed her
SALN covering said period.
Further, being on leave from government service is not synonymous with separation from government
service. Suffice to say that one does not cease to become government employee only because one takes an
official leave.
On the contrary, relevant laws provide that all public officials and employees are required to file SALN.
To review, Section 17, Article XI of the Constitution categorically requires that "[a] public officer or
employee shall, upon assumption of office and as often thereafter as may be required by law, submit
declaration under oath of his assets, liabilities, and net worth. In the case of the President, the Vice-
President, the Members of the Cabinet, the Congress, the Supreme Court, the Constitutional Commissions
and other constitutional offices, and officers of the armed forces with general or flag rank, the declaration
shall be disclosed to the public in the manner provided by law."
Section of R.A. No. 6713 states that "[p]ublic officials and employees have an obligation to accomplish and
submit declarations under oath of, and the public has the right to know, their assets, liabilities, net worth and
financial and business interests including those of their spouses and of unmarried children under eighteen
(18) years of age living in their households." Further, "[t]he [SALN] and the [d]isclosure of [b]usiness
[i]nterests and [f]inancial [c]onnections shall be filed by: (1) Constitutional and national elective officials,
with the national office of the Ombudsman; (2) Senators and Congressmen, with the Secretaries of the
Senate and the House of Representatives, respectively; Justices, with the Clerk of Court of the Supreme
Court; Judges, with the Court Administrator; and all national executive officials with the Office of the
President; (3) Regional and local officials and employees, with the Deputy Ombudsman in their respective
regions; (4) Officers of the armed forces from the rank of colonel or naval captain, with the Office of the
President, and those below said ranks, with the Deputy Ombudsman in their respective regions; and (5) All
other public officials and employees, defined in RA 3019, as amended, with the Civil Service Commission."
Relatedly, Section 34, Chapter 9, Book of the Administrative Code of 1987 also states that "[a] public
officer or employee shall upon assumption of office and as often thereafter as may be required by law,
submit declaration under oath of his assets, liabilities, and net worth."
Section of R.A. No. 6713, however, provides for certain exceptions to the requirement: (1) those serving in
honorary capacity these are persons who are working in the government without service credit and without
pay; (2) laborers these are persons who perform ordinary manual labor; and (3) casual or temporary workers.
Respondent claims exception on the argument that for the periods she was on official leave from U.P., she
did not receive any pay.
This statement, however, is inaccurate. The fact that respondent did not receive any pay for the periods she
was on leave does not make her government worker "serving in an honorary capacity" to he exempted from
the SALN laws. She did not receive pay not because she was serving in an honorary capacity, but for the
simple reason that she did not render any service for said period. Fundamental is the rule that workers who
were not required to work are not, by law, entitled to any compensation.
under the Rules Implementing the Code of Conduct and Ethical Standards for Public Officials and
Employees dated April 21, 1989. Rule VIII thereof provides:
Rule VIII
Review and Compliance Procedure
Section 1. The following shall have the authority to establish compliance procedures for the review of
statements to determine whether said statements have been properly accomplished:

3. Respondent is not required by law to keep record of her SALNs. (a) In the case of Congress, the designated committees of both Houses of Congress subject to approval by
the affirmative vote of the majority of the particular House concerned;
Respondent invokes Section 8, paragraph C(4) of R.A. No. 6713 which provides:
Section 8. Statements and Disclosure. x x x

xxxx (b) In the case of the Executive Department, the heads of the departments, offices and agencies insofar as
their respective departments, offices and agencies are concerned subject to approval of the Secretary of
(C) Accessibility of documents. (1) Any and all statements filed under this Act, shall be made available for Justice
inspection at reasonable hours.

(2) Such statements shall be made available for copying or reproduction after ten (10) working days from
the time they are filed as required by law. (c) In the case of the Judicial Department, the Chief Justice of the Supreme Court; and

(3) Any person requesting copy of statement shall be required to pay reasonable fee to cover the cost of
reproduction and mailing of such statement, as well as the cost of certification.
(d) In the case of the Constitutional Commissions and other Constitutional Offices, the respective
(4) Any statement filed under this Act shall be available to the public for period of ten (10) years after Chairman and members thereof; in the case of the Office of the Ombudsman, the Ombudsman.
receipt of the statement. After such period, the statement may be destroyed unless needed in an ongoing
investigation.
The above official shall likewise have the authority to render any opinion interpreting the provisions on the
There is no argument that the filed SALNs need not be retained by the receiving officer or the custodian
review and compliance procedures in the filing of statements of assets, liabilities, net worth and disclosure
after more than ten years from the filing or receipt thereof as such documents may be destroyed unless
of information.
needed in an ongoing investigation. In this context, the filer is likewise under no obligation to keep records
of such SALNs after the ten-year period.
In the event said authorities determine that statement is not properly filed, they shall inform the reporting
individual and direct him to take the necessary corrective action.
The fact, however, remains that even respondent's more recent SALNs falling within the ten-year period for
her application to the Chief Justice position are not on record. Logically, public officer under question
The individual to whom an opinion is rendered, and any other individual involved in similar factual
should obtain certification from the repository agency to attest to the fact of filing. In the event that the
situation, and who, after issuance of the opinion acts in good faith in accordance with it shall not be subject
SALNs were actually filed but missing, such certification should likewise attest to the fact that the SALNs
to any sanction provided in the Code.
filed could no longer be located due to valid reason (such as destruction by natural calamity, gutted by fire
The Rules implementing R.A. No. 6713 thus authorize only certain officials of the Legislative, Executive
or destruction pursuant to the ten-year period abovecited).
and Judicial Departments, and the Constitutional Commissions and Constitutional offices to establish
compliance procedures for the review of statements in the SALN to determine whether said statements have
4. Respondent was never asked to comply with the SALN laws.
been been properly accomplished. The said officials are also authorized to render opinions interpreting the
provisions on the review and compliance procedures and to determine whether or not SALN is properly
Respondent likewise banks on the supposed presumption that she filed the SALNs considering that the U.P.
filed. If the SALN was not properly filed, the authorized officials are required to inform the reporting
HRDO never called her attention to the non-filing thereof and instead, released clearance and certification in
individual and direct him/her to take the necessary corrective action. The records do not show that at the
her favor. However, said circumstance, if true, does not detract from the fact that the duty to properly
time respondent assumed her post as professor in U.P., or at any time thereafter until her resignation, that
accomplish the SALN belongs to the public official and the corrective action that the concerned authority is
concerned authorized official/s of the Office of the President or the Ombudsman had established compliance
expected to undertake is limited only to typographical or mathematical rectifications.
procedures for the review of SALNs filed by officials and employees of State Colleges and Universities, like
U.P.
For the years that respondent rendered government service in U.P., the relevant rules would be that provided

334
The ministerial duty of the head of office to issue compliance order came about only on April 16, 2006
when the Civil Service Commission (CSC) issued Memorandum Circular No. 10, s. 2006 amending Rule
VIII. This was pursuant to CSC Resolution No. 06-0231 dated February 1, 2006 wherein the esc adopted the
revised rules on review and compliance procedure. As such, the U.P. HRDO could not have been expected
to perform its ministerial duty of issuing compliance orders to respondent when such rule was not yet in
existence at that time.
At any rate, Navarro v. Office of the Ombudsman280 clarifies on the limited corrective action which the head
of office can perform as regards the review of SALNs:
xxxx
Lest it be misunderstood, the corrective action to be allowed should only refer to typographical or
mathematical rectifications and explanation of disclosed entries. It does not pertain til hidden,
undisclosed or undeclared acquired assets which the official concerned intentionally concealed by one
way or another like, for instance, the use of dummies. There is actually no hard and fast rule. If income
has been actually reported to the BIR in one's ITR, such fact can be considered sign of good faith.
concomitant to the position.
Respondent failed to properly and promptly file her SALNs, again in violation of the Constitutional and
statutory requirements
Further, the failure to file truthful SALN not only puts in doubt the integrity of the officer, but such failure
to file truthful, complete and accurate SALN would likewise amount to dishonesty if the same is attended by
malicious intent to conceal the truth or to make false statements. 283
On its face, the SALNs filed by respondent covering her years of government service in U.P., appear to have
been executed and filed under suspicious circumstances:
(a) Respondent's SALN as of December 31, 1996 was accomplished and notarized only on June 29, 1998, or
two years late;
(b) Her SALN as of December 31, 1998 was filed only in 2003, or five years late;

xxxx (c) Her SALNs for the years 1997, 1998, 1999 and 2002 were notarized only on August 21, 2003;284

The Court is mindful of the duty of public officials and employees to disclose their assets, liabilities and net (d) Both the 1996285 and 1997286 SALNs were subscribed and sworn to by respondent before Zenaida P.
worth accurately and truthfully. In keeping up with the constantly changing and fervent society and for the Cruz (Administrative Officer IV, Human Resource Development and Records Section, U.P. Law Center) on
purpose of eliminating corruption in the government, the new SALN is stricter, especially with regard to the June 29, 1998. However, under the Notarial Registry of Eugenia A. Borras, four SALNs of respondent were
details of real properties, to address the pressing issue of transparency among those in the government acknowledged before her on August 21, 2003 as cited in the next preceding paragraph. It appears thus that
service. Although due regard is given to those charged with the duty of filtering malicious elements in the there were two SALNs for 1997 executed by respondent;
government service, it must still be stressed that such duty must be exercised with great caution as grave
consequences result therefrom. Thus, some leeway should be accorded the public officials. They must be (d) She failed to file her SALNs for 2004, 2005, and 2006 which were the years when she received the bulk
given the opportunity to explain any prima facie appearance of discrepancy. To repeat, where his of her fees from the PIATCO cases. As respondent divulged, she received from the Republic, through the
explanation is adequate, convincing and verifiable, his assets cannot be considered unexplained wealth or OSG, the following fees287 in relation to the PIATCO cases:
illegally obtained.281 (Emphasis ours)
5. Respondent's inclusion in the matrix of candidates with complete requirements and in the shortlist Year Income
nominated by the JBC confirms or ratifies her compliance with the SALN requirement.
2004 P7,055,513.56
Respondent, both in her pleadings and in the Oral Arguments, harps on the purported failure of the JBC to
exclude her from the list of shortlisted applicants. She points to at least eleven times that the JBC could have 2005 P11,532,226.00
disqualified her due to her lack of SALNs but failed to do so. Hence, she argues that she is deemed to have
substantially complied with the legal requirements at the time of her application. 2006 P2,636,006.64

Respondent's argument is specious. The invalidity of respondent's appointment springs from her lack of 2007 P4,673,866.36
qualifications. Her inclusion in the shortlist of candidates for the position of Chief Justice does not negate,
nor supply her with the requisite proof of integrity. She should have been disqualified at the outset. It must 2008 P4,070,810.93
be underscored that the JBC En Banc included respondent in the shortlist for the position of Chief Justice
without deliberating her July 23, 2012 Letter. Without prejudice to this Court's ruling in A.M No. 17-11-12- 2009 P301,552.00
SC and A.M. No. 17-11-17-SC, the JBC En Banc cannot be deemed to have considered respondent eligible
because it does not appear that respondent's failure to submit her SALNs was squarely addressed by the TOTAL P30,269,975.49
body. Her inclusion in the shortlist of nominees and subsequent appointment to the position do not estop the
(e) Her SALN for 2006 was accomplished only on July 27, 2010 and unsubscribed, only to be later on
Republic or this Court from looking into her qualifications. Verily, no estoppel arises where the
claimed by respondent to have been really intended as SALN as of July 27, 2010;
representation or conduct of the party sought to be estopped is due to ignorance founded upon an innocent
mistake.282 Again, without prejudice to the outcome of the pending administrative matter, it appears that
respondent's inclusion was made under the erroneous belief that she complied with all the legal requirements

335
The SALNs that she submitted in support of her application for Chief Justice likewise bear badges of
irregularities:
(f) Her SALN for 2009 was not accomplished under oath, was likewise belatedly filed only on June 22,
2012 and indicates therein that she was an Associate Justice of the Court when her appointment came only
on August 16, 2010;
(g) Her SALNs for 2006 and 2009 did not reflect the fees she received as counsel for the Republic in the
PIATCO cases.
The Bureau of Internal Revenue's (BIR) Report shows that respondent received from the OSG the total gross
amount of P32,494,805.27 as fees from 2004 to 2009 for the PIATCO cases. The BIR Report also shows
that she paid the withholding taxes on said fees in the total amount of Php4,599,504.71. By mathematical
computation, respondent would have had Php27,895,300.56 as her net disposable income. This net
disposable income was not reflected in respondent's SALN for 2006 (which she claims to really be her
SALN as of July 27, 2010) nor in her SALN as of 2009. Her SALN for 2009 revealed net worth of only
Php17,936,353.00;
(h) The unaccounted income from the PIATCO cases could not have been due to losses or liabilities
considering that respondent have had an increase in her net worth from 2002 to 2009. Her SALN for 2002
shows net worth of only Php3,804,000.00 while her SALN for 2009 shows net worth of Php17,936,353.00,
her net worth thus increased by Php14,132,353.00. While the BIR Report shows that respondent received
approximately Php27M in disposable net income, her SALN only shows an increase of approximately
Php14M in net worth. The difference between the two, in the amount of estimatedly Php13M, was
conspicuously missing in the SALNs filed by respondent;
(i) There is glaring difference between the two 2010 SALNs filed. The total value of respondent's personal
properties in the "SALN as of July 27, 2010" is Php9,000,000.00, while the value of her personal properties
as declared in her "SALN as of December 31, 2010" increased to Php11,723,010. Respondent, therefore,
enjoyed an increase of approximately Php2,700,000.00 in personal properties in just span of five (5) months
after having been appointed as Associate Justice.
j) It is contrary to human experience that the SALNs purportedly recovered by respondent's husband were
not stamped received by the UP HRDO. It is unusual that respondent did not bother to demand that her
personal copy be duly stamped received with particulars as to the date and initial, at least of the party who
received the same as proof that she timely filed her SALN.
(k) There is no indication from the stamped "Certified Photocopy" and initialed by Rosemarie Pabiona on
the SALNs that she is the official custodian of the same, and whether the photocopies of the original are on
file, contrary to Section 24, Rule 1322 of the Rules of Court.
The above circumstances betray respondent's intention to falsely state material fact and to practice deception
in order to secure for herself the appointment as Chief Justice. It is therefore clear as day that respondent
failed not only in complying with the physical act of filing, but also committed dishonesty betraying her lack
of integrity, honesty and probity.288
Consistently, the Court does not hesitate to impose the supreme penalty of dismissal against public officials
whose SALNs were found to have contained discrepancies, inconsistencies and non-disclosures. For
instance, in Rabe v. Flores,289 the Court unanimously imposed the ultimate penalty of dismissal from service
upon regional trial court interpreter with forfeiture of all retirement benefits and accrued leaves and with
prejudice to re-employment for dishonesty and for failure to disclose her business interest, which was "stall
336
in the market" for continued period of four years.The Court stressed that it is the obligation of an employee
to submit sworn statement as the "public has right to know" the employee's assets, liabilities and net worth
and financial and business interests.
The dockets of the Sandiganbayan itself show that several charges for violationof R.A. No. 6713 for failure
to file and for untruthful declarations in the SALNs resulted to plea of guilt from the accused, lest the latter
run the risk of being imprisoned.290 Interestingly, the Sandiganbayan concluded criminal case291against
certain Rogelio Pureza, then Senior Superintendent of the Philippine National Police, who was charged with
counts of violation of Section in relation to Section 11 of R.A. No. 6713 for failure to file his annual SALN
for the years 1990, 1991, 1992 and 1993. In the course of the investigation by the Office of the Deputy
Ombudsman for the Military relative to an anonymous letter of concerned resident of Kalookan City on the
alleged illegal activities and unexplained wealth of several policemen, Pureza was found to have no record
of his SALN from 1989 to 1993 on file with the PNP Records Center. In handing guilty verdict, the
Sandiganbayan reasoned that the non-existence of the SALs with the Records Center of the PNP proved that
the accused did not file his SAL for 1990 to 1993. The Sandiganbayan observed that even assuming that the
accused had indeed filed his SAL with the PNP and his records were lost during the transfer of records, he
could have easily and conveniently obtained copy of his SAL from either the CSC or the Office of the
Military Ombudsman.
It is thus plainly obvious that the courts do not take violations of the SALN laws slightly even as against
lowly public officials.
With more reason should such test of dishonesty and lack of integrity be applied in the instant case when
respondent failed to file her SALNs for several years and for those years that she filed, the SALNs so filed
prove to be untruthful.
C.
Respondent failed to submit the required SALNs as to qualify for nomination pursuant to the JBC
rules
The JBC required the submission of at least ten SALNs from those applicants who are incumbent
Associate Justices, absent which, the applicant ought not to have been interviewed, much less been
considered for nomination
Further compounding respondent's woes is the established and undisputed fact that she failed to submit the
required number of SALNs in vjolation of the rules set by the JBC itself during the process of nomination.
To recall, the announcement for the opening of the application and recommendation of the position of Chief
Justice in 2012 was preceded by JBC En Bancmeeting where the members thereof agreed that applicants
who were previously in the government service must submit all previous SALNs. This agreement was
reflected in the JBC's announcement published on June 5, 2012, where it was made clear that applicants
from the government shall submit, in addition to the usual documentary requirements, all previous SALNs,
with warning that those with incomplete or out-of-date documentary requirements will not be interviewed or
considered for nomination.
As extensively quoted, the minutes292 of the JBC deliberation held on July 20, 2012 show that the JBC
deliberated on the candidates who submitted incomplete SALNs and then determined who among them are
to be considered as having "substantially complied." Senator Francis G. Escudero, as then ex
officio member, suggested that "at least an attempt to comply with particular requirement" can be used as
parameter for determining substantial compliance.293
With this, the JBC proceeded to go over, one by one, the compliance of the candidates with the lacking
documentary requirements. For instance, Justice Abad was considered as having substantially complied
because he submitted SALNs in his year-stint with the OSG and because the filing of the SALN at the time
Justice Abad joined the government was not yet required. Dean Raul C. Pangalangan lacked SALNs but that
he was trying to get them from the Civil Service Commission and so, regular member Justice Aurora
Santiago-Lagman moved that the SALNs he submitted be considered as substantial compliance.
Congressman Rufus B. Rodriguez did not submit even one SALN which prompted Justice Peralta to remark
that Congressman Rodriguez may no longer be interested. Commissioner Rene V. Sarmiento also submitted
incomplete SALNs, but there was no mention whether the SALNs he submitted were considered as
substantial compliance. Similarly, for respondent, the JBC determined that she did not submit her SALNs
from 1986 to 2006 and that, as remarked by Senator Escudero, the filing thereof during those years was
already required. There was no indication that the JBC deemed the three SALNs (for the years 2009, 2010
and 2011) submitted by respondent for her 20 years as professor in the U.P. College of Law and two years
as Associate Justice, as substantial compliance.
We revisit the pertinent portions of the aforesaid Minutes as follows:
III. Deliberation on Candidates with Incomplete Documentary Requirements:
xxxx
Justice Peralta suggested that the Council examine the matrix per candidate as follows:
Justice Roberto A. Abad
The Executive Officer reported that Justice Abad lacks the Statement of Assets, Liabilities and Networth
(SALN) for the years 1982-1983.
Justice Peralta mentioned that Justice Abad joined the government in the late 70's and during that time
there was no R.A. 6713 yet. He added that Justice Abad might no longer locate them.
Senator Escudero said that SALNs were not yet required at that time.
The Executive Officer said that Justice Abad had been with the OSG from 1982 to 1986; but he submitted
only his SALNs for the period 1981, 1984, 1985 and 1986. He was already asked to submit the lacking
SALNs.
Justice Peralta asked whether there is need for them to explain the reason for failing to comply with the
requirements considering the time constraint.
Senator Escudero said that it would be more proper for the JBC to ask the candidate for the reason; however,
in the case of Justice Abad, he opined that he substantially complied with the requirements of the JBC.
Justice Lagman agreed with the Senator.
There being no objection, the Council agreed that Justice Abad had SUBSTANTIALLY COMPLIED
with the requirements of the JBC.
xxxx
337
The Executive Officer asked for clarification, particularly with respect to SALNs, whether five (5) SALNs
would constitute substantial compliance if the candidate has been in the government service for twenty (20)
years.
The Council examined the list with regard to the SALNs, particularly the candidates corning from the
government, and identified who among them, would be considered to have substantially complied:
1. Justice Arturo D. Brion - has substantially complied;
2. Justice Antonio T. Carpio - has substantially complied;
xxxx
5. Solicitor General Francis H. Jardeleza - has complied;
6. Justice Teresita J. Leonardo-De Castro - has substantially complied;
xxxx
10. Justice Maria Lourdes P.A. Sereno
The Executive Officer informed the Council that she had not submitted her SALNs for period of ten
(10) years, (sic) that is, from 1986 to 2006.
Senator Escudero mentioned that Justice Sereno was his professor at U.P. and that they were required to
submit SALNs during those years.
xxxx
16. Atty. Ronaldo B. Zamora has lacking SALNs and MCLE cert.
xxxx
From the foregoing discourse, it appears that respondent was specifically singled out from the rest of the
applicants for having failed to submit single piece of SALN for her years of service in the U.P. College of
Law. This is in obvious contrast with the other shortlisted applicants who submitted SALNs, or whose years
in government service correspond to the period prior to the effectivity of R.A. No. 6713.
The minutes of the JBC En Banc meeting also show that Senator Escudero moved that the determination of
whether candidate has substantially complied with the requirements be delegated to the Executive
Committee.294 In the end, it appears that the JBC En Banc decided to require only the submission of the past
ten (10) SALNs, or from 2001-2011, for applicants to the Chief Justice position.295 This, as much, was
confirmed by Atty. Pascual during the Congressional hearings. 296
From the foregoing, it is clear that the JBC En Banc did not do away with the requirement of submission of
SALNs, only that substantial compliance therewith, i.e., the submission of the SALNs for the immediately
preceding 10 years instead of all SALNs, was deemed sufficient.
Conformably thereto, the following candidates submitted their respective letters as regards the submission of
the SALNs:
(a) Justice De Castro submitted letter297 dated July 17, 2012 with the attached SALNs for 16 years covering
the period 1997 to 2011, from the time she became an Associate Justice of the Sandiganbayan on September
23, 1997 until December 2011 as Associate Justice of the Supreme Court. She also disclosed that her SALN
from February 19, 1973 until November 30, 1978 which she filed during her employment in the Supreme
Court, could no longer be located. She also disclosed that her personal files, including her SALNs that she
filed while employed at the Department of Justice from December 1, 1978 to September 22, 1997, were
among those burned when the third floor of the DOJ was gutted by fire in late 1996 or early 1997. In any
case, upon inquiry from the CSC, she was told that her SALNs filed as DOJ employee were already
disposed of, as it was way beyond the statutory ten (10) year period.
(b) Jose Manuel Diokno submitted sworn and verified statement 298 dated July 17, 2012, stating therein that
while he served as General Counsel of the Senate Blue Ribbon Committee and as Special Counsel to the
Board of Directors of the Development [Bank] of the Philippines, his engagement was only as consultant on
contractual basis and as such, was not required to file SALN.
(c) Justice Carpio submitted letter299 dated July 23, 2012 stating that he resigned as Chief Presidential Legal
Counsel effective January 31, 1996 and as such, he did not submit SALN for the year 1995 because the
submission for that year was on April 30, 1996 when he was no longer employed with the government.
Nevertheless, the clearance issued by the Office of the President certifies that Justice Carpio has submitted
his SALN and that he has no pending criminal or administrative case.
(d) Justice Abad submitted an attestation300 dated July 23, 2012 that he does not have copy of his SALNs for
the years 1968 to 1974, 1976 to 1980 and 1982 to 1983.
(e) Dean Amado Valdez wrote letter301 dated July 23, 2012 saying that he could no longer find the SALNs
covering the years 1985 to 1987, 2002 to 2003 and 2004 representing the years of his intermittent
government service. He said that in, any case, the assets reflected in the SALN which he already filed were
acquired after he left government service as shown by his income tax returns for the periods from 2005 to
2011.
Notably, Jose Manuel Diokno and Dean Amado Valdez were not included in the short list.
That such was the standing requirement of the JBC from at least the incumbent Associate Justices applying
for the position of Chief Justice is evident from the fact that five (5) out of six (6) applicants who were
incumbent Associate Justices, namely: (1) Justice Carpio; (2) Justice Brion; (3) Justice Velasco; and (4)
Justice De Castro were determined to have completely complied with the SALN requirement; and (5) Justice
Abad was determined to have substantially complied. These Justices submitted the following numbers of
SALNs:302
Justice Carpio 14 SALNs
Justice Brion 12 SALNs
Justice Velasco 19 SALNs
Justice Leonardo-De Castro 15 SALNs
338
Justice Abad 7 SALNs
This belies respondent's representation that the JBC maintained its requirement that the candidates submit all
previous SALNs. If such were the case, only those candidates determined to have complied should have
been shortlisted, and the others, including respondent, should not have qualified. In any case, the
requirement of submitting SALNs within the ten-year period instead of all previous SALNs is more in
keeping with the law. Recall that Section 8, paragraph C(4) of R.A. No. 6713 provides that the filed SALNs
need not be retained by the receiving officer or the custodian after more than ten years from the filing or
receipt thereof, and actually allows such documents to be destroyed unless needed in an ongoing
investigation.
Be that as it may, records clearly show that the only remaining applicant-incumbent Justice who was not
determined by the JBC En Banc to have substantially complied was respondent, who submitted only
SALNs, i.e., 2009, 2010 and 2011, even after extensions of the deadline for the submission to do so.
Instead of complying, respondent offered, by way of her letter dated July 23, 2012, justifications why she
should no longer be required to file the SALNs: that she resigned from U.P. in 2006 and then resumed
government service only in 2009, thus her government service is not continuous; that her government
records are more than 15 years old and thus infeasible to retrieve; and that U.P. cleared her of all academic
and administrative responsibilities and charges.
These justifications, however, did not obliterate the simple fact that respondent submitted only SALNs in
her 20-year service in U.P., and that there was nary an attempt on respondent's part to comply.
Respondent sought to be excused from complying with the SALN requirement because, allegedly, the
SALNs requested from her (1995-1999 as respondent alleged) from U.P., are old and thus "infeasible to
retrieve." But the Republic, through the OSG, was able to present before the Court copies of respondent's
SALNs for 1985, 1990, 1991, 1993, 1994, 1995, 1996, 1997, and 2002 from the U.P. HRDO. These files,
therefore, are not "infeasible to retrieve." Also, in comparison with the other nominees, the SALNs which
the latter could no longer produce are much older in age than the SALNs which respondent regarded as
"infeasible to retrieve". For instance, Justice Abad had no copy of his SALN from 1968-1974, 1976-1980
and 1981-1983 while Justice Leonardo-De Castro had no copy of her SALNs from 1973-1978.
Respondent likewise sought special treatment as having complied with the submission of the SALN by
submitting Certificate of Clearance issued by the U.P. HRDO. This clearance, however, hardly suffice as
substitute for SALNs. The import of said clearance is limited only to clearing respondent of her academic
and administrative responsibilities, money and property accountabilities and from administrative charges as
of the date of her resignation on June 1, 2006. But such could not, by any stretch of imagination, be
considered as compliance with the SALN requirement. Obviously, an administrative officer, performing
ministerial and administrative duties, could not have certified respondent's compliance with the filing of
SALNs which is statutory, and not merely an administrative, requirement.
In all these, respondent curiously failed to mention that she, in fact, did not file several SALNs during the
course of her employment in U.P. Such failure to disclose material fact and the concealment thereof from
the JBC betrays any claim of integrity especially from Member of the Supreme Court. On this score, the
observations of the Court in the case of OCA v. Judge Estacion, Jr.303 ring special significance:
He concealed from the appointing authority, at the time he applied for the judicial post until his
appointment, information regarding the criminal charges for homicide and attempted homicide filed against
him. Such fact would have totally eluded the Court had it not been complained of by one Mrs. Ruth L. Vda.
de Sison who, incidentally, is the mother of one of the victims. x x x
xxxx
x x x Respondent did not honestly divulge all that the appointing authority ought to know to correctly
discern whether he is indeed fit for the judicial post. He continuously suppressed vital information on his
personal circumstances under the false belief that he can mislead the Court and get away with it for good.
What respondent did, or omitted to do, was calculated deception committed not only against the Court but
against the public as well, clearly indicative of his lack of moral rectitude to sit as magistrate, and
sufficiently repulsive that it detracts from public confidence in the integrity of the judiciary. Dismissal
indeed is the appropriate retribution for such kind of transgression.
Be it stressed that judges are held to higher standards of integrity and ethical conduct than attorneys or other
persons not invested with the public trust. They should inspire trust and confidence, and should bring honor
to the judiciary. And because of their critical position in the judicial bureaucracy, this Court as overseer is
duty-bound to insure that the integrity of the judicial system is preserved and maintained, by pursuing that
ever-vigilant search for the virtues of competence, integrity, probity and independence mandated by no less
than the Constitution itself.304 (Citations omitted)
Indubitably, respondent not only failed to substantially comply with the submission of the SALNs but there
was no compliance at all. The contents of respondent's Letter dated July 23, 2012 itself betray an exercise of
dishonesty and disposition to deceive in an attempt to secure for herself the appointment as Chief Justice.
In Ombudsman v. Peliño,305 We held:
Under the laws governing civil service, dishonesty is classified as grave offense the penalty of which is
dismissal from the service at the first infraction. person aspiring to public office must observe honesty,
candor anq faithful compliance with the law. Nothing less is expected. This ideal standard ensures that only
those of known probity, competence and integrity are called to the challenge of public service. It is
understood to imply disposition to lie, cheat, deceive, or defraud; untrustworthiness; lack of integrity; lack
of honesty, probity or integrity in principle; lack of fairness and straightforwardness; disposition to defraud,
deceive or betray. Dishonesty is malevolent act that puts serious doubt upon one's ability to perform his
duties with the integrity and uprightness demanded of public officer or employee. 306
For these reasons, the JBC should no longer have considered respondent for interview as it already required
the submission of, at least, the SALNs corresponding to the immediately preceding 10 years up to December
31, 2011.
Parenthetically, the Court observes that the circumstances surrounding the receipt of, and the action or non-
action of the JBC, on respondent's Letter dated July 23, 2012 likewise leave much to be desired. The Letter,
while ostensibly sent to and received by the JBC on the same date, does not appear to have been brought to
the attention of the JBC En Banc. Excerpts307 from the Report of the House Committe on Justice on this
point is revealing:
Justice Peralta, who was acting Chief Justice and ex officio Chairman of the JBC at the time, testified that he
never learned about the non-submission of the SALNs by then-applicant [respondent], and that he also never
saw the letter submitted by the [r]espondent explaining why she could not submit her SALNs. He stated that
had he known about these matters, he could have raised these issues during the en banc meeting of the JBC.
Atty. [Maria Milagros N. Fernan-]Cayosa likewise stated that she never saw the letter-explanation, and that
she merely relied on the matrix prepared by the JBC Secretariat which stated that the Respondent Chief
Justice Sereno had already submitted her complete requirements. 308
Even the JBC's Execom to which the duty of ascertaining whether or not the candidates have substantially
complied with the documentary requirements had been expressly delegated by the JBC En Banc, could not
produce any minutes of meeting or record to show that respondent was in fact determined to have complied.
339
At any rate, the issue of whether or not there is administrative culpability in the ranks of the JBC, the OEO
or the ORSN relative to the nomination of respondent in 2012 is not concern in the instant petition and is
matter best left to be decided in A.M. No. 17-11-12-SC and A.M. No. 17-11-17-SC, now pending before the
Court.
Respondent's failure to submit to the JBC her SALNs for several years means that her integrity was not
established at the time of her application
Respondent argues that failure to submit the SALNs to the JBC is not cause for disqualification because the
SALN was not among the documents which the JBC considered as evidence of integrity.
This Court, again, disagrees.
The requirement to submit SALNs is made more emphatic when the applicant is eyeing the position of the
Chief Justice. The minutes of the JBC En Bancmeeting309 enlightens as to the rationale behind the
requirement:
Senator Escudero moved that additional requirements be imposed by the (JBC) for the position of Chief
Justice, namely (1) all previous SALNs (up to December 31, [2011]) for those in the government or SALN
as of December 31, (2011) for those from the private sector; and (2) waiver in favor of the JBC of the
confidentiality of local and foreign currency bank accounts under the Bank Secrecy Law and Foreign
Currency Deposits Act. The documents shall be treated with utmost confidentiality and only for the use of
the JBC. He proposed that these additional requirements be included in the publication of the announcement
opening the said position. He explained that the basis of his motion was the fact that the reason why
Chief Justice Corona was removed from office was due to inaccuracies in his SALN. The Members of
the House of Representatives, in the exercise of their wisdom, determined that non-inclusion of assets
in one's SALN is an impeachable offense. Likewise, majority of the Senate voted to convict because of
the inaccuracies in the bank accounts and statements in his SALN. He said that the JBC would not
want to recommend person who is susceptible to such kind of attack. He said that the JBC should
impose higher standards to aspirants for the position of Chief Justice.
Congressman Tupas concurred with Senator Escudero's motion and suggested that the waiver should not be
limited to year-end balances only.
There being no objection, the motion was APPROVED. The (JBC) agreed to PUBLISH the announcement
opening the position of Chief Justice of the Supreme Court of the Philippines together with the additional
requirements.
x x x. (Emphasis ours)
The requirement to submit the SALNs along hand with the waiver of bank deposits, is therefore not an
empty requirement that may easily be dispensed with, but was placed by the JBC itself for reason in order to
allow thJBC to carry on its mandate of recommending only applicants of high standards and who would be
unsusceptible to impeachment attacks due to inaccuracies in SALNs.
Further, the failure to submit the required SALNs means that the JBC and the public are divested of the
opportunity to consider the applicant's fitness or propensity to commit corruption or dishonesty. In
respondent's case, for example, the waiver of the confidentiality of bank deposits would be practically
useless for the years that she failed to submit her SALN since the JBC cannot verify whether the same
matches the entries indicated in the SALN. This is precisely the reason why the JBC required the submission
of the SALNs together with the waiver of bank deposits, thus:
Justice Lagman expressed that previously the Members had agreed that they would only use the waiver
when there is complaint, doubt, or suspicion on the SALN of any of the candidates.
Senator Escudero said that if the argument that the JBC would not use the waiver unless there is complaint,
bank information could not be secured. The complaint could have no basis. He commented that by the time
the JBC receives the information, the public interview is finished. In this case, the least that the JBC could
do is to give the candidate an opportunity to explain his side. He explained that the theory and logic
behind the requirement of waiver was precisely due to the fact that the former Chief Justice was
impeached because of inaccuracies in his SALN. Thus, the JBC should ensure that all the nominees
who would be nominated would not be accused of the same. The JBC would just want to avoid
situation where the next Chief Justice, nominated by the JBC and appointed by the President, would
again be subjected to impeachment.
Justice Peralta asked the Senator for clarification whether it is his suggestion that if the JBC finds something
wrong on the bank account of any candidate, he or she would be asked in public.
Senator Escudero replied that it could be done; however, in the questions that would be propounded by
Member, or in the response of the candidates, the amounts need not be stated. The questions should only
tackle inconsistencies of bank deposits as against their SALNs.
Justice Lagman agreed with the Senator.
xxxx
Justice Hermosisima commented that the waiver is very easy to comply with. The problem is that banks may
not be able to respond given the very short period of time. He said that the JBC requires waiver so that in the
event that there is any question as to the accuracy of candidate's accounting in his or her SALN, then, the
JBC would be able to look into the bank accounts without violating the bank secrecy law. He said that the
JBC need not look into their accounts for now as no complaint has been filed yet on any of the candidates.
Senator Escudero and Congressman Tupas commented that everybody should comply.
x x x.310 (Emphasis ours)
Respondent is presumed to know of the importance of the filing of the SALN together with the bank waiver.
The waiver which respondent executed under oath clearly provides:
This waiver is executed on the condition that the JBC or its duly authorized representatives shall make use
of it, as well as any and all information or data obtained by virtue thereof, for the exclusive and sole
purpose of evaluating my qualifications for the position of Chief Justice of the Supreme Court.
(Emphasis ours)
Conclusively then, respondent's failure to submit her SALNs to the JBC means that she was not able to
prove her integrity at the time of her application as Chief Justice.
D.
Respondent's disposition to commit deliberate acts and omissions demonstrating dishonesty and lack
of forthrightness is discordant with any claim of integrity
The Court cannot play blind against the manifest inconsistencies, lack of forthrightness and dishonesty
committed by respondent as government official prior to and at the time of her application as Chief Justice.
In addition to the suspicious and highly questionable circumstances surrounding the execution of her
340
SALNs, the following untruthful statements and dishonest acts (as herein elsewhere discussed) ultimately
negate respondent's claim that she is person of proven integrity:
(1) Respondent had no permit from U.P. to engage in private practice while in government service but she
did engage in private practice as shown in her PDS and admitted in her Ad Cautelam Comment;
(2) Respondent represented that after her resignation from U.P. in 2006, she was engaged, full time, in
private practice. However, in her PDS, it was stated that she was engaged as counsel by the government in
the PIATCO cases from 1994 up to 2009;
(3) Respondent claims that the clearance issued by U.P., clearing her of academic/administrative
responsibilities, money and property accountabilities and from administrative charges as of June 1, 2006 can
be taken as an assurance that U.P. considered the SALN requirements to have been met since it is the
ministerial duty of the Head of the Office to ensure that the SALNs of its personnel are properly filed and
accomplished. However, this ministerial duty of U.P. HRDO to call her attention as regards compliance with
the SALN requirements was imposed only in April 2006 (CSC Resolution No. Memorandum Circular No.
10-2006 dated April 17, 2006) as stated in her Letter. Hence, the U.P. HRDO could not have been expected
to perform its ministerial duty of issuing compliance orders to respondent when such rule was not yet in
existence at that time;
(4) Her PDS shows that she was Deputy Ca,mmissioner of the Commission on Human Rights only later to
be disclaimed by her during the Oral Argument stating that it was only functional title;
(5) In her Letter dated July 23, 2012 to the JBC, respondent represented that her SALNs were infeasible to
retrieve when the SALNs that she selectively filed were available all along in U.P. and in fact the OSG was
able to get copies of the same. Even respondent herself was able to get copy of her 1989 SALN from U.P.;
(6) There is marked incompatibility between the excuse respondent proffered in her Letter dated July 23,
2012, and the explanation she gave in the Oral Argument. In the Letter, the respondent reasoned that it is
"infeasible to retrieve" all her SALNs because of the age of said documents, i.e., that they are more than
fifteen years old. However, during her Oral Arguments, she explained that it was "infeasible" to retrieve
them only because of time constraints;
(7) She claims that the other candidates for the Chief Justice position did not comply with the SALN
requirement for the application, when it was only she who did not comply. Out of the six incumbent Justices
who were candidates for the Chief Justice positions, it was only respondent who did not comply with SALN
submission. There are competent proofs on record to show these other candidates' compliance, contrary to
respondent's allegations.
(8) Respondent committed tax fraud when she failed to truthfully declare her income in her income tax
returns for the years 2007-2009 and in her value-added tax (VAT) returns for the years 2005-2009;
Per the BIR Report,311 respondent underdeclared her income in her quarterly VAT Returns the following
amounts in the taxable years 2005-2009:
Quarterly Income from Declared Income per VAT Over (Under)
Period
PIATCO Case (Php) Return (Php) (Php)
2005
 Argument. In its Memorandum, the Republic explained that during the Oral Argument, some Members of
Q3 1,398,807.50 - -1,398,807.50
the Court raised questions regarding respondent's income as counsel in the PIATCO cases and the payment
of the corresponding taxes thereto, hence, the inclusion of the same in its Memorandum. 312 In the same way,
Q4 7,234,455.44 667,333.33 -6567122.11
respondent could have addressed the same in her Memorandum Ad Cautelam, instead she opted to do so in
belatedly filed Reply/Supplement to the Memorandum Ad Cautelam.
2006
At any rate, respondent's argument in the said Reply/Supplement, implying that the allegations on the tax
Q1 - 469,375.00 469,375.00 fraud are unfounded, and that in including this matter, which is mere reiteration of the discussion in Article
of the Articles of Impeachment, the OSG usurped the sole power of the House of Representatives to initiate
Q2 - 1,416,664.25 1,416,664.25 and prosecute the Articles of Impeachment in blatant disregard of the Constitution, 313 deserve scam
consideration.
Q3 1,539,546.28 - -1,539,546.28
It bears stressing that respondent is not being prosecuted for tax fraud in this case. The Court did not discuss
Q4 1,387,292.12 1,246,992.00 -140,300.12 the merits of the said tax fraud nor did the Court made any conviction against the respondent as regards the
said offense. Neither is this Court's finding of respondent's lack of proven integrity during her application
2007 anchored upon this act. This matter is cited as corroborative circumstance to respondent's non-filing of
certain SALNs, already established in this case. Notably, the Congress had already determined that probable
Q1 - 2,620,340.17 2,620,340.17 cause exist that respondent committed the said offense.

Q2 - - Further, respondent's disposition and propensity to commit dishonesty and lack of candidness are manifested
through her subsequent acts committed during her incumbency as Chief Justice, which are now matters of
Q3 4,379,198.29 2,183,529.33 -2,195,668.96 public record and also determined to be constituting probable cause for impeachment:
(9) Caused the procurement of brand-new Toyota Land Cruiser worth at least Php5,000,000.00;
Q4 633,670.58 - -633,670.58
(10) Caused the hiring of Ms. Helen Macasaet without the requisite public bidding and who received
2008 excessive compensation amounting to more than Php11,000,000.00;

Q1 - 2,650,440.00 2,650,440.00 (11) Misused at least Php3,000,000.00 of government funds for hotel accommodation at Shangri-La
Boracay as the venue of the 3rd ASEAN Chief Justices meeting;
Q2 - -
(12) Created the Judiciary Decentralized Office (JDO) in the guise of reopening the Regional Court
Q3 - 508,032.00 508,032.00 Administration Office (RCAO) without being sanctioned by the Court En Banc;

Q4 5,184,435.85 1,045,262.67 -4,139,173.19 (13) Issued Temporary Restraining Order (TRO) in Coalition of Associations of Senior Citizens in the
Philippines v. COMELEC contrary to the Supreme Court's internal rules an misrepresented that the TRO
2009 was issued upon the recommendation of the Member-in-charge;

Q1 344,243.65 301,552.00 -42,691.65 (14) Manipulated the disposition of the DOJ request to transfer the venue of the Maute cases outside of
Mindanao;
Total Undeclared Income
-16,656,980.39
Subject to VAT (15) Ignored rulings of the Supreme Court with respect to the grant of survivorship benefits which caused
undue delay to the release of survivorship benefits to spouses of deceased judges and Justices;
On this matter, respondent avers in her Reply/Supplement to the Memorandum Ad Cautelam that she was
not given the chance to be heard on this new matter in the Republic's Memorandum, which makes reference (16) Appointed Geraldine Econg as Head of the JDO and Brenda Jay Angeles-Mendoza as Chief of the
to new documents, totally alien to and outside of the matters raised in the Republic's Petition, Reply, and Philippine Mediation Center Office (PMCO) without the approval of the Court En Banc;
other previous submissions.
(17) Failed and refused to appoint qualified applicants to several high-ranking positions in the Supreme
There is no truth to the allegation that respondent was not afforded the opportunity to address this matter or Court;
that this matter is "totally alien" to this proceedings. This matter was actually brought up during the Oral

341
(18) Ordered the dissemination of erroneous information on what transpired during the Supreme Court En
Banc deliberations in A.M. No. 16-08-04-SC on the alleged involvement of four (4) incumbent judges in
illegal drugs and undermined the co-equal power of the Executive Department by ordering the Executive
Secretary himself to file cases against the judges;
(19) Manipulated the processes of the JBC to exclude then Solicitor General, now Associate Justice Francis
Jardeleza, by using highly confidential document involving national security against the latter;
(20) Clustered the nominees for the six (6) vacant positions of Associate Justice in the Sandiganbayan
without legal basis and in so doing, impaired the power of the President to appoint members of the
Judiciary;
(21) Misrepresented to the members of the Supreme Court En Banc that there were Justices who requested
to do away with the voting of recommended applicants to the vacant positions in the Supreme Court;
(22) Manipulated the processes of the JBC to exclude Court of Appeals Associate Justice Fernanda Lampas-
Peralta from the shortlist of nominees for the position of Presiding Justice of the Court of Appeals;
(23) Interfered with the investigation conducted by the House of Representatives on the alleged misuse of
the tobacco funds in the Province of Ilocos Norte by unilaterally preparing Joint Statement, asking the
House of Representatives to reconsider its show cause order against the Justices of the Court of Appeals,
and then pressuring then Presiding Justice of the Court of Appeals, now Associate Justice Andres B. Reyes,
Jr. to likewise sign the same;
(24) Undermined and disrespected the impeachment proceedings conducted by the House of Representatives
against her.314
Again, while concedingly the foregoing acts as revealed during the Congressional hearings on the
impeachment are not proper subjects of the instant quo warranto petition, these acts are nevertheless
reflective and confirmatory of respondent's lack of integrity at the time of her nomination and appointment
as Chief Justice and her inability to possess such continuing requirement of integrity. Indeed, Rule 130,
Section 34 of the Rules on Evidence provide:
SEC. 34. Similar acts as evidence. Evidence that one did or did not do certain thing at one time is not
admissible to prove that he did or did not do the same or similar thing at another time; but it may be
received to prove specific inent or knowledge, identity, plan, system, scheme, habit, custom or usage,
and the like. (Emphasis ours)
E.
Respondent's ineligibility for lack of proven integrity cannot be cured by her nomination and
subsequent appointment as Chief Justice
The Court is all too aware that the instant petition neither partakes of an administrative or criminal
proceeding meant to determine culpability for failure to file SALNs. Respondent maintains that she filed ail
her SALNs, only that she refuses to present proof of such SALNs before the Court. The Court's
pronouncement, however, should not be made dependent upon the pieces of evidence which party may
possibly present in different forum. Rather, the Court is mandated to render judgment based on the evidence
presented before it, in compliance with the dictates of due process. And the evidence, as it stands before Us,
shows that respondent failed to file nine SALNs in her 20-year service in U.P. College of Law and
submitted to the JBC only three out of the required ten SALNs at the time of her application as Chief
Justice.
342
Respondent split hairs in stating that failure to file is different from failure to submit the SALNs to the JBC.
That may be true. But it is likewise true that despite ample opportunity to do so, respondent chose not to
present evidence as to preponderate the case in her favor. The Court cannot therefore be faulted, at least for
purposes of the instant quo warranto proceedings, to conclude that respondent not only failed to submit the
SALNs to the JBC, but altogether failed to file the same.
Such failure to file and to submit the SALNs to the JBC, is clear violation not only of the JBC rules, but also
of the law and the Constitution. The discordance between respondent's non-filing and non-submission of the
SALNs and her claimed integrity as person is too patent to ignore. For lack of proven integrity, respondent
ought to have been disqualified by the JBC and ought to have been excluded from the list of nominees
transmitted to the President. As the qualification of proven integrity goes into the barest standards set forth
under the Constitution to qualify as Member of the Court, the subsequent nomination and appointment to the
position will not qualify an otherwise excluded candidate. In other words, the inclusion of respondent in the
shortlist of nominees submitted to the President cannot override the minimum Constitutional qualifications.
Well-settled is the rule that qualifications for public office must be possessed at the time of appointment and
assumption of office and also during the officer's entire tenure as continuing requirement.315 When the law
requires certain qualifications to be possessed or that certain disqualifications be not possessed by persons
desiring to serve as public officials, those qualifications must be met before one even becomes candidate.316
The voidance of the JBC nomination as necessary consequence of the Court's finding that respondent is
ineligible, in the first place, to be candidate for the position of Chief Justice and to be nominated for said
position follows as matter of course. The Court has ample jurisdiction to do so without the necessity of
impleading the JBC as the Court can take judicial notice of the explanations from the JBC members and the
OEO, as regards the circumstances relative to the selection and nomination of respondent submitted to this
Court in A.M. No. 17-11-12 and A.M. No. 17-11-17-SC. Relatedly, the Court, in quo warrantoproceeding,
maintains the power to issue such further judgment determining the respective rights in and to the public
office, position or franchise of all the parties to the action as justice requires.317
Neither will the President's act of appointment cause to qualify respondent. Although the JBC is an office
constitutionally created, the participation of the President in the selection and nomination process is evident
from the composition of the JBC itself. The regular members of the JBC are appointees of the President,
including an ex officio member, the Secretary of Justice, who serves as the President's alter ego. As observed
during the deliberations of the 1986 Constitutiopal Commission:
xxxx
MR. CONCEPCION. The Judicial and Bar Council is no doubt an innovation. But it is an innovation made
in response to the public clamor in favor of eliminating politics in the appointment of judges.
At present, there will be about 2,200 positions of judges, excluding those of the Supreme Court, to be filled.
We feel that neither the President alone nor the Commission on Appointments would have the time and the
means necessary to study the background of every one of the candidates for appointment to the various
courts in the Philippines, specially considering that we have accepted this morning the amendment to the
effect that no person shall be qualified unless he has proven high sense of morality and probity. These are
matters that require time, which we are sure the President does not have except, probably, he would have to
endorse the matter to the National Bureau of Investigation or to some intelligence agency of the government.
And we do not think that these agencies are qualified to pass upon questions of morality, integrity and
competence of lawyers.
As regards the implication that we are, in effect, depriving the President of the power of appointment, all we
do consider is the fact that the members of the Council are all appointees of the President. They are alter
egos of the President so, in effect, they are exercising the power by virtue of the appointment by the
President. So, the alleged negation or denial or emasculation of the appointing power of the President does
not really exist since all members of the Council, except those who are ex officio members who, by the way,
are also appointees of the President, are all appointees of the President.
In effect, the action of the JBC, particularly that of the Secretary of Justice as ex officio member, is reflective
of the action of the President. Such as when the JBC mistakenly or wrongfully accepted and nominated
respondent, the President, through his alter egos in the JBC, commits the same mistake and the President's
subsequent act of appointing respondent cannot have any curative effect.
Besides in Luego v. Civil Service Commission,318 We said:
Appointment is an essentially discretionary power and must be performed by the officer in which it is vested
according to his best lights, the only condition being that the appointee should possess the qualifications
required by law. If he does, then the appointment cannot be faulted on the ground that there are others
better qualified who should have been preferred. This is political question involving considerations of
wisdom which only the appointing authority can decide. (Emphasis ours)
As emphasized in Central Bank v. Civil Service Commission:319
It is well-settled that when the appointee is qualified, as in this case, and all the other legal
requirements are satisfied, the Commission has no alternative but to attest to the appointment in
accordance with the Civil Service Law. The Commission has no authority to revoke an appointment on the
ground that another person is more qualified for particular position. It also has no authority to direct the
appointment of sub'stitute of its choice. To do so would be an encroachment on the discretion vested upon
the appointing authority. An appointment is essentially within the discretionary power of whomsoever it
is vested, subject to the only condition that the appointee should possess the qualifications required by
law. (Emphasis ours)
Thus, while the Court surrenders discretionary appointing power to the President, the exercise of such
discretion is subject to the non-negotiable requirements that the appointee is qualified and all other legal
requirements are satisfied, in the absence of which, the appointment is susceptible to attack.
Even as respondent took her "oath of office," she remains disqualified. An oath of office is qualifying
requirement for public office and prerequisite to the full investiture of the office. 320 The oath, couched in the
following tenor, states:
Ako ay taimtim na nanunumpa na tutuparin ko nang buong husay at katapatan, sa abot ng aking kakayahan,
ang mga tungkulin ng aking kasalukuyang katungkulan at ng mga iba pang pagkaraan nito gagampanan ko
sa ilalim ng Republika ng Pilipinas, na aking itataguyod at ipagtatanggol ang Saligang Batas ng Pilipinas;
na tunay na mananalig at tatalima ako rito; na susundin ko ang mga batas, mga kautusang legal, at mga
dekretong pinaiiral ng mga sadyang itinakdang may kapangyarihan ng Republika ng Pilipinas; at kusa
kong babalikatin ang pananagutang ito nang walang ano mang pasubali hangaring umiwas.
Kasihan nawa ako ng Diyos.
As respondent herself expressed through her dissent in Philippine Savings Bank, "[w]hen public officer
affixes his signature on his Oath of Office, he embraces all his constitutional and statutory duties as public
officer, one of which is the positive duty to disclose all of his assets and liabilities. Thus, for all public
officers, what is absolute is not the confidentiality privilege, but the obligation of disclosure."321
While respondent putatively took an oath to defend and support the Constitution and to obey the laws of the
land, she had not been forthright with the circumstances surrounding the lacking SALNs. This makes her
oath untruthful and altogether false.
343
F.
Respondent is de facto officer removable through quo warranto
The effect of finding that person appointed to an office is ineligible therefor is that his presumably valid
appointment will give him color of title that confers on him the status of de facto officer.322
Tayko v. Capistrano,323 through Justice Ostrand, instructs:
Briefly defined, de facto judge is one who exercises the duties of judicial office under color of an
appointment or election thereto x x x. He differs, on the one hand, from mere usurper who undertakes to act
officially without any color of right, and on the others hand, from judge de jure who is in all respects legally
appointed and qualified and whose term of office has not expired x x x. (Citations omitted)
For lack of Constitutional qualification, respondent is ineligible to hold the position of Chief Justice and is
merely holding colorable right or title thereto. As such, respondent has never attained the status of an
impeachable official and her removal from the office, other than by impeachment, is justified. The remedy,
therefore, of quo warranto at the instance of the State is proper to oust respondent from the appointive
position of Chief Justice. Tayko continues:
The rightful authority of judge, in the full exercise of his public judicial functions, cannot be questioned by
any merely private suitor, nor by any other, excepting in the form especially provided by law. judge de facto
assumes the exercise of part of the prerogative of sovereignty, and the legality of that assumption is open to
the attack of the sovereign power alone. Accordingly, it is well established principle, dating from the earliest
period and repeatedly confirmed by an unbroken current of decisions, that the official acts of de facto judge
are just as valid for all purposes as those of de jure judge, so far as the public or third persons who are
interested therein are concerned. The rule is the same in civil and criminal cases. The principle is one
founded in policy and convenience, for the right of no one claiming title or interest under or through the
proceedings of an officer having an apparent authority to act would be safe, if it were necessary in every
case to examine the legality of the title of such officer up to its original source, and the title or interest of
such person were held to be invalidated by some accidental defect or flaw in the appointment, election or
qualification of such officer, or in the rights of those from whom his appointment or election emanated; nor
could the supremacy of the laws be maintained, or their execution enforced, if the acts of the judge having
colorable, but not legal title, were to be deemed invalid. As in the case of judges of courts of record, the acts
of justice de facto cannot be called in question in any suit to which he is not party. The official acts of de
facto justice cannot be attacked collaterally. An exception to the general rule that the title of person
assuming to act as judge cannot be questioned in suit before him in generally recognized in the case of
special judge, and it is held that party to an action before special judge may question his title to the office of
judge on the proceedings before him, and that the judgment will be reversed on appeal, where proper
exceptions are taken, if the person assuming to act as special judge is not judge de jure. The title of de facto
officer cannot be indirectly questioned in proceeding to obtain writ of prohibition to prevent him from doing
an official act nor in suit to enjoin the collection of judgment rendered by him. Having at least colorable
right to the officer his title can be determined only in quo warranto proceeding or information in the nature
of quo warranto at suit of the sovereign. (Citation omitted)
Although Tayko dealt with challenge to the title of judge, who is not an impeachable official, the ruling
therein finds suitable application since quo warrantoas remedy is available against respondent who is de
facto Chief Justice, having mere colorable right thereto. This must necessarily be so since the Constitution,
in providing that impeachable officials can only be removed by impeachment, presumes that such
impeachable official is one having de juretitle to the office.
Upon finding that respondent is in fact ineligible to hold the position of Chief Justice and is therefore
unlawfully holding and exercising such public office, the consequent judgment under Section 9, Rule 66 of
the Rules of Court is the ouster and exclusion of respondent from holding and exercising the rights,
functions and duties of the Office of the Chief Justice.
IV.
Guidelines for the Bench, the Bar and the JBC
The present is the exigent and opportune time for the Court to establish well-defined guidelines that would
serve as guide posts for the bench, the bar and the JBC, as well, in the discharge of its Constitutionally
mandated functions. In sum, this Court holds:
Quo warranto as remedy to oust an ineligible public official may be availed of, provided that the requisites
for the commencement thereof are present, when the subject act or omission was committed prior to or at the
time of appointment or election relating to an official's qualifications to hold office as to render such
appointment or election invalid. Acts or omissions, even if it relates to the qualification of integrity being
continuing requirement but nonetheless committed during the incumbency of validly appointed and/or
validly elected official cannot be the subject of a quo warranto proceeding, but of impeachment if the public
official concerned is impeachable and the act or omission constitutes an impeachable offense, or to
disciplinary, administrative or criminal action, if otherwise.
Members of the Judiciary are bound by the qualifications of honesty, probity, competence, and integrity. In
ascertaining whether candidate possesses such qualifications, the JBC in the exercise of its Constitutional
mandate, set certain requirements which should be complied with by the candidates to be able to qualify.
These requirements are announced and published to notify not only the applicants but the public as well.
Changes to such set of requirements, as agreed upon by the JBC En Banc through proper deliberation, such
as in this case when the JBC decided to allow substantial compliance with the SALN submission
requirement, should also be announced and published for the same purpose of apprising the candidates and
the public of such changes. At any rate, if candidate is appointed despite being unable to comply with the
requirements of the JBC and despite the lack of the aforementioned qualifications at the time of application,
the appointment may be the subject of quo warranto provided it is filed within one year from the
appointment or discovery of the defect. Only the Solicitor General may institute the quo warranto petition.
The willful non-filing of SALN is an indication of dishonesty, lack of probity and lack of integrity. Moreso
if the non-filing is repeated in complete disregard of the mandatory requirements of the Constitution and the
law.
Consistent with the SALN laws, however, SALNs filed need not be retained after more than ten years by the
receiving office or custodian or repository unless these are the subject of investigation pursuant to the law.
Thus, to be in keeping with the spirit of the law requiring public officers to file SALNs to manifest
transparency and accountability in public office if public officers cannot produce their SALNs from their
personal files, they must obtain certification from the office where they filed and/or the custodian or
repository thereof to attest to the fact of filing. In the event that said offices certify that the SALN was
indeed filed but could not be located, said offices must certify the valid and legal reason of their non-
availability, such as by reason of destruction by natural calamity due to fire or earthquake, or by reason of
the allowed destruction after ten years under Section of R.A. No. 6713.
V.
Blatant Disregard and Open Defiance to the Sub Judice Rule
Perhaps owing to novelty, the instant case has opened pandora's box of unsolicited opinions, streaming in
abundance from those professed legal and non-legal experts alike. This flurry of opinions, demonstrations,
public and media appearances made by the parties themselves or at their behest, or by their lawyers and
344
spokespersons, had demonstrably shifted the plane from what should otherwise be purely legal, calm and
sober approach to the present controversy into detestable feast of pros and cons, and of mediocre and
haphazard approximation of perceived good versus evil. This veritable feast had become too delectable to
escape the waiting predators' keen sense of attack, especially at time when the prey appears to be at its most
vulnerable. This Court is an institution designed and dedicated to specific purpose and thus refuses to fall
prey and invite claws to dig into its walls. Because of the various extraneous redirections from the merits
which the instant case has received, there is need to emphasize that this case involves purely legal and
justiciable matter which the Court intends, and had resolved, through the application of the Constitution, the
law and relevant jurisprudence, unswayed by personalities or sentiments.
As such, the Court had lent extreme tolerance to the parties and nonparties equally, as the Court shall
ultimately speak through its decision. Be that as it may, the Court, in jealous regard of judicial
independence, cannot simply overlook the open and blatant defiance of the sub judice rule suffered by the
present action.
The sub judice rule restricts comments and disclosures pertaining to the judicial proceedings in order to
avoid prejudging the issue, influencing the court, or obstructing the administration of justice. 324 The
rationale for this rule is for the courts, in the decision of issues of fact and law, to be immune from every
extraneous influence; for the case to be decided upon evidence produced in court; and for the determination
of such facts be uninfluenced by bias, prejudice or symphathies. In fine, what is sought to be protected is the
primary duty of the courts to administer justice in the resolution of cases before them. 325
Thus, it is generally inappropriate to discuss the merits of and make comments on cases sub judice and such
acts may even result to contempt of court. In US. v. Sullen326 it was stated:
In clear case where it is necessary in order to dispose of judicial business unhampered by publications which
reasonably tend to impair the impartiality of verdicts; or otherwise obstruct the administration of justice, this
Court will not hesitate to exercise its undoubted power to punish for contempt. This Court must be permitted
to proceed with the disposition of its business in an orderly manner free from outside interference
obstructive of its constitutional functions. This right will be insisted upon as vital to an impartial court, and,
as last resort, as an individual exercises the right of self-defense, it will act to preserve its existence as an
unprejudiced tribunal.
In Our jurisdiction, this rule finds legal basis on the Court's power of contempt. Rule 71 of the Rules of
Court provides:
Sec. 3. Indirect contempt to be punished after charge and hearing. After charge in writing has been filed,
and an opportunity given to the respondent to comment thereon within such period may be fixed by the
court and to be heard by himself or counsel, person guilty of any of the following acts may be punished for
indirect contempt:
xxxx
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the
administration of justice;
x x (Emphasis ours)
The oft-cited defense of persons charged with indirect contempt for violating the sub judice rule is their right
to free speech. Needless to say, this Court would be the first in line of combat in legal battle to uphold such
constitutionally-protected right. However, when actions, posing to be innocent exercise of such right,
"impede, interfere with and embarrass the administration of justice" or "make serious and imminent threat
thereto", this Court will not hesitate to call out and punish the same.327 In Sheppard v. Maxwell,328 the US
Supreme Court reminds that although the freedom of expression should be given great latitutde, it must not
be so broad as to divert the trial away from its objective which is to adjudicate both criminal and civil
matters in an objective, calm, and solemn courtroom setting.
The sub judice rule finds more austere application to members of the Bar and of the Bench as the strict
observance thereof is mandated by the Code of Professional Responsibility and the Code of Judicial
Conduct:
CODE OF PROFESSIONAL RESPONSIBILITY
CANON 13 A LAWYER SHALL RELY UPON THE MERITS OF HIS CAUSE AND REFRAIN FROM
ANY IMPROPRIETY WHICH TENDS TO INFLUENCE, OR GIVES THE APPEARANCE OF
INFLUENCING THE COURT.
Rule 13.02 A lawyer shall not make public statements in the media regarding pending case tending to arouse
public opinion for or against party.
NEW CODE OF JUDICIAL CONDUCT FOR THE PHILIPPINE JUDICIARY
CANON - INDEPENDENCE
Judicial independence is pre-requisite to the rule of law and fundamental guarantee of fair trial. judge shall
therefore uphold and exemplify judicial independence in both its individual and institutional aspects.
SECTION 3. Judges shall refrain from influencing in any manner the outcome of litigation or dispute
pending before any court or administrative agency.
SECTION 7. Judges shall encourage and uphold safeguards for the discharge of judicial duties in order to
maintain and enhance the institutional and operational independence of the judiciary.
SECTION 8. Judges shall exhibit and promote high standards of judicial conduct in order to reinforce public
confidence in the judiciary, which is fundamental to the maintenance of judicial independence.
CANON - INTEGRITY
Integrity is essentially not only to the proper discharge of the judicial office but also to the personal
demeanor of judges.
SECTION 1. Judges shall ensure that not only is their conduct above reproach, but that it is perceived to be
so in the view of reasonable observer.
SECTION 2. The behavior and conduct of judges must reaffirm the people's faith in the integrity of the
judiciary. Justice must not merely be done but must also be seen to be done.
CANON - IMPARTIALITY
Impartiality is essential to the proper discharge of the judicial office. It applies not only to the decision itself
but to the process by which the decision is made.
SECTION 2. Judges shall ensure that his or her conduct, both in and out of court, maintains and enhances
the confidence of the public, the legal profession, and litigants in the impartiality of the judge and of the
345
judiciary.
SECTION 4. Judges shall not knowingly, while proceeding is before or could come before them, make any
comment that might reasonably be expected to affect the outcome of such proceeding or impair the manifest
fairness of the process. Nor shall judges make any comment in public or otherwise that might affect the fair
trial of any person or issue.
CANON - PROPRIETY
SECTION 2. As subject of constant public scrutiny, judges must accept personal restrictions that might be
viewed as burdensome by the ordinary citizen and should do so freely and willingly. In particular, judges
shall conduct themselves in way that is consistent with the dignity of the judicial office.
SECTION 6. Judges, like any other citizen, are entitled to freedom of expression, belief, association and
assembly, but in exercising such rights, they shall always conduct themselves in such manner as to preserve
the dignity of the judicial office and the impartiality and independence of the judiciary.
Lawyer speech is subject to greater regulation for two significant reasons: one, because of the lawyer's
relationship to the judicial process; and two, the signficant dangers that lawyer's speech poses to the trial
process.329 As such, actions in violation of the sub judice rule may be dealt with not only through contempt
proceedings but also through administrative actions.
It is thus perturbing that certain officials of the separate branches of the Government and even men and
women learned in law had succumbed to the tempting affray that tends to divert the instant quo
warranto action from its primary purpose. Even worse, respondent and her spokepersons chose to litigate
respondent's case, apart from her Ad Cautelam submissions to the Court, before several media-covered
engagements. Through her actuations, respondent appears to have forgotten that this is court action for quo
warranto, and as such, the concomitant rule on sub judice unnegotiably applies. Worst still, respondent who
is lawyer and who asserts right to the Chief Justice position and therefore must foremost be aware of the
rule, continues to conjure public clamor against the Court and its Members with regard to this pending case
in Court.
It is interesting to note that respondent initially refused to participate in the congressional hearings for the
impeachment complaint. When this petition for quo warranto was filed, respondent continuously refuses to
recognize this Court's jurisdiction. Instead of participating in the process and answering the charges against
her truthfully to assist in the expeditious resolution of the matter, respondent opted to proceed to nationwide
campaign, conducting speeches and accepting interviews, discussing the merits of the case and making
comments thereon to vilify the members of the Congress, cast aspersions on the impartiality of the Members
of the Court, degrade the faith of the people to the Judiciary, and falsely impute ill motives against the
government that it is orchestrating the charges against her. It is well-nigh unthinkable for respondent to
profess deprivation of due process when she herself chose to litigate her case before the media.
These public appearances,330 to name few, are as follows:
Event Source Quotations
'Speak Truth Video: "Kung
to Power' <https://web.facebook.com/juliusnleonen/videos/889291114607029/> manalo ang
forum in UP Article: quo
Diliman, <https://www.rappler.com/nation/201854-sereno-quo-warranto-destroy- warranto,
Quezon City judicial-independence> mapupunta
on May 5, tayo sa "That is what
2018 diktaturya," is going to
she said happen if the
"Talagang quo waranto
wawasakin petition is
completely ng granted, "
quo warranto Sereno
na ito ang stated.
judiciary."
"The
"Pag itong booming
quo warranto voice of
natuloy, hindi Justice
na right and Vicente
reason, kundi Mendoza has
will will na reverberated
nu'ng that if the quo
whoever is on waranto
top. So petition is
kailangan granted, the
natin pigilan Judiciary will
ito ..." she destroy
said. itself," Sereno
said as she
Integrated Bar Article: "Ano po ang also praised
of the <https://businessmirror.com.ph/sereno-seesdictatorship-after-filingof- tawag sa the IBP's
Philippines quo-warranto-petitionagainst-her/> kondisyon na stand to
(IBP) Central ang citizen oppose and
Luzon walang dismiss the
Regional kalaban- petition.
Convention laban sa
and Mandatory gobyerno" Forum on Video: "Of my
Continuing Chief Justice upholding <https://web.facebook.com/24OrasGMA/videos/l colleagues,
Legal Maria Judicial 0156438427991977/?t=16> know that
Education at Lourdes A. Independence Article: several of
thr Quest Sereno at the Ateneo <http://newsinfo.inquirer. net/985460/defend-judicial-independence-cj- them, have
Hotel here asked. Law School in sereno-tells-law-students> had their
on May 2, Rockwell, qualifications
2018 "Ang tawag Makati City on , their
po doon Wednesday, A inability to
dictatorship, pril 25, 2018 submit
hindi po documentary
constitutional requirements,
democracy waived,
ang tawag several of
doon, " she them. If the
said. JBC was

346
correct in laughter from
saying that the crowd.
an attempt to
submit "Hindi ko
requirements, naman po
that good minanipula ni
faith should konti ang
be accorded JBC...14
to the 14, kaming pare-
including parehong
those against sitwasyon.
me, why am Bakit
the only one nagreklamo
being singled kung kayo
out?, " she nalagay sa
told law listahan at
students at ako nalagay
the Ateneo sa listahan.
Law School Ang masama
during forum ay hindi kayo
on judicial ang nalagay
independence at ako ang
. nalagay, "
she added.
"The
questions Speech at the <https://www.philstar.com/headlines/2018/04/23/1808492/sereno-camp- "The month
propounded Commenceme questions-sc-haste-decide-her-case> of May is
by Supreme nt Exercises of time that 'is
Court itself, the College of <https://news.mb.com.ph/2018/04/21/no-need-to-rush-quo-warranto- supposed to
they wanted Law of the sereno/> be devoted to
to examine University of writing
everything San Agustin decisions in
did in the (USA) in the many
past in the Iloilo City, pending cases
hope they on April 20, before the
would find 2018 Court.
something Anyway the
scandalous in session will
my life. was resume on
just June 5, so
preparing wha's with
myself for the the rush?"
question,
'ilang "Wala
boyfriend mo namang
na?,'" Sereno dahilan para
said, which magmadali."
elicited

347
 "Kung totoo judiciary as
po, indication well as the
po ito na entire
mayroon na consitutional
po silang framework."
conclusion
bago pa man 30th <http://newsinfo.inquirer.net/973692/sereno-delivers-most-powerful- "I look at any
marinig ang Anniversary speech-yet-not-all-peers-happy> forum to try
lahat," and 23rd me other than
Sereno said. National the
Convention of constitutional
Fellowship of <http://newsinfo.inquirer.net/981806/sereno-ups-attack-vs-quo-warranto- "Even your the Philippine ly exclusive
the Philippine in-speech-at-lawyers-forum? very Women form of
Bar utm_campaign=Echobox&utm_medium=Social&utm_source=Facebook livelihoods Judges impeachment
Association #link_time=1523450119> are Association as an
(PBA) in threatened; (PWJA) in admission by
Makati City there is no Manila Hotel the
on April 11, safety for any on complainant
2018 of you... That Thursday, Ma and my other
is how deadly rch 8, 2018 detractors
this quo that after 15
warranto hearings,
petition is," they have
she added. failed to
come up with
Sereno said if any evidence
the Supreme which can be
Court would convicted in
cooperate in the Senate,"
the move of she asserted.
the Executive
to oust her "Sila ang
sans nagsimula
impeachment bakit ay aw
trial, "I will nilang
use directly tapusin?
the words of Napakaaga
Chief Justice naman yata
Davide that it para umamin
will be sila na wala
judicial hara- silang napala
kiri, if not kundi
judicial matinding
kamikaze kabiguan
bringing it kaya't kung
the anu-ano na
destruction of lamang ang
the entire gimik ang

348
 ginagawa
nila masunod - CJOL
lamang ang Sereno
kanilang refused to
nais," Sereno talk about the
added. quo warranto
petition, but
CNN <https://www.youtube.com/watch?v=HlYKAQ4QPcY In this interpreted
Philippines 1. http://cnnphilippines.com/videos/2018/03/09/One-on-one-with-Chief- interview, the SC's
(March Justice-Maria-Lourdes-Sereno.html> CJOL resolution
9,2018); One Sereno, which
on One with among directed her
the Chief others, stated to comment
Justice with that her on said
Pinky Webb defense petition
preparation without
was directed taking due
towards the course to the
impeachment petition.
proceedings CJOL said
as she has not that such
assessed yet action of the
the quo SC does not
warranto mean
petition as of anything and
the affirmed
interview. Webb's
interepretatio
- "From the n that such
very action does
beginning, we not mean that
were looking the SC
really at the assumes
impeachment jurisdiction
provisions of over the quo
the warranto
Constitution case.
so that has
been the - "Yan naman
preparation talaga ang
all along. hindi ko
Well, haven't pwede
yet assessed pagusapan,
this latest quo ano."
warranto
petition. Not - On
yet time jurisdiction:
maybe" "Normal yan,

349
mar ami yun"
kaming
ganyan Speech of <https: www.youtube.com/watch?v="iN511xW9bpk"> Directed
petition. CJOL Sereno towards
Wala naman at the politicians
talagang ibig Panpacific supposedly
sabihin yan. University regarding the
In most cases, North ongoing
walang ibig Philippines impeachment
sabihin yun (March 9, proceedings,
kasi hindi pa 2018) (Posted CJOL Sereno
prejudged. by CNN said, "Wag na
Pero hayaan Philippines) 'wag niyo
niyo po muna kami
yung lawyers gigipitin" and
ko ang further stated
magsabi kasi that such
mahirap what judicial
naman pong independence
pangunahan means.
ko sila eh
ginagawa pa - I know that
po nila yung our women
sagot eh". judges, for
example, are
- "Marami ho always eager
kaming to make stand
laging for judicial
ginagamit na independence
without due . Kayong mga
course at pulitiko, wag
marami nyong
kaming pakialaman
dinidismiss ang aming
na mga gustong
nanggaling gawin kung
sa without palagay nyo
giving due kayo ay tama
course pero at andyan
pinagkocomm ang
ent... It ebidensya,
doesn't lalabas
mean... Ang naman yan
usual eh. Pero
tradition po huwag na
namin ay huwag nyo
walang ibig kaming
sabihin po gigipitin. Yan

350
 ang ibig
sabihin ng - CJOL
judicial Sereno said
independence that "Even
" when they
thought they
Speech on <http://newsinfo.inquirer.net/987807/live-chief-justice-sereno-at-up- - CJOL have won, in
"The diliman-forum> Sereno the end, they
Mumshie on emphasized will never
Fire: Speak that AJ win. The
Truth to Leonardo-De country is
Power" held Castro's already woke.
at the inhibition The youth
University of would prove would not
the that she is listen to lies.
Philippines unbiased. The people
(May 5, 2018) own the
* Forum was - Hindi sila judiciary.
organized by tumigil, They are not
youth hangga't owned by the
groups, Ako Ay naisip ng isa, judiciary, the
Isang yung justices, the
Sereno and nagaakusa sa judges" and
Youth for akin, "ay that the
Miriam yung SALN "good will
niya, yung always
SALN nya na prevail over
sinabi nya sa evil".
JBC na
nahihirapart - CJOL
niyang Sereno said
humanap that two of
(sic). Yun, her accusers,
dun tugisin. who she
At sinabi nya considers as
na dapat ako her rival also,
ay idisqualify will be one of
dahil unjust those who
daw na ako will decide
ang the quo
naappoint. warranto
May injustice petition filed
na nangyari. against her,
So alam na thereby
natin ang isa against the
sa basic rules of
pinagsisimula fair play.
n nito"

351
- "Eh bakit arguments
biglang now sit as
umatras judge? This
sila(pertainin violates the
g to his most basic
accusers in norms of
the fairplay...Nga
impeachment yon talaga,
proceedings) nakita na, na
at ginawa hindi ho ako
itong kaso net bibigyan
quo warranto talaga ng
kung saan Hang ito ng
ang dalawa kahit anong
sa nags ab modicum of
ing hindi ako fairness"
dapat
naappoint eh - She
sila rin ang discussed that
maghuhusga one of the
sa akin. Saan effects of an
kayo nakakila invalid
ng sitwasyon appointment
na yung is the
karibal niyo forfeiture of
sa posisyon retirement
ang may benefits.
kapangyariha
n sabihin - "At alam
kayong dapat nyo ho, pag
ka matanggal sinabi na
sa posisyon, invalid yung
hindi ikaw appointment,
dapat. Paano pati yung
nangyari? retirement
Under what benefits ho
rules of tatanggalin"
fairness, what
rules of - The
Constitution granting of
or legal quo warranto
system, can would result
an accuser into
who acted dictatorship
also as my and would
prosecutor destroy the
during the judiciary.
oral

352
- At ano ho
ang - "Saang
mangyayari korte kayo
kung ang pupunta?
buong sangay Sino ang
ang lahat ng magtatapang
kawani ng na huwes
gobyerno ay kung madali
kayang na sila
takutin at mapatanggal
hindi na ?... Hindi na
pwedeng ho kayo
maging makakatakbo,
independent?. kasi lahat ho
. Ano hong ng judges
mangyayari tatakutin ng
kung ang Solicitor
COMELEC General...Saa
ho ay n ho kayo
sinabihan ng pupunta sa
Presidente at isang arbiter
Solicitor na
General na impartial?..
"yungpartido wala na po.
lang namin Wawasakin
ang pwedeng nitong quo
manalo, kung warranto
hindi i-quo petition nito,
warranto ka completely
namin?" Ano ang
po yun? Ano judiciary"
yung tawag
sa ganoong - "Ano na ho
sitwasyon na ang
may mangyayari
matinding sa bayan
pananakot sa natin kung
buong wala na hong
bayan? Ang security of
tawag po tenure sa
dun, government
diktalurya.. service? Kasi
Kung manalo kung may
po ang quo haunting
warranto, kulang lang
yan po ang sa file...
magiging kulang ang
resulta" file na

353
 nabigay sa government.
JBC. eh CJOL Sereno
naglalabasan said that such
na ho ang assertion
SALN ko... makes the
pero eto action
tatanggalin at imprescriptibl
gagawa sila e.
ng prinsipyo
at - "According
ikawawasak to the
ng buong Solicitor
bayan para General, the
lang sa one year
kanilang prescriptive
personal na period can
interes. never apply
Nakakalagim against
po ang government.
pangyayaring It must be
ito" personal
knowledge of
Speech on <https://www.youtube.com/watch?v="oh35V4BMiww> CJOL Sereno the Solicitor
Ateneo Law discussed the General
School for the contents of himself And
forum Tindig: the quo so if you
forum on warranto change the
upholding petition. person of the
judicial Solicitor
independence - On the General, the
as pillar of prescriptive period,
democracy period, CJOL continues to
(April 25, Sereno said always be
2018) that jobs of fresh. It's
the justices, never
judges and prescriptible,
government completely
employees imprescriptib
are le action. So
jeopardized you
because of jeopardize
the assertion the jobs of the
of the OSG justices, the
that petition judges and
for quo all gov't
warranto does employees.
not prescribe You allow
against the selected

354
targeting and justices
against the that are
Chief Justice already
for reasons sitting now
that are very because all of
obvious now their
and you qualifications
destroy the may suddenly
legal be reviewed.
profession" The JBC was
wrong to
1. waive this
qualification
- On the for this
effect of the position. can
quo warranto tell you as
petition, matter of
CJOL Sereno record that of
said that all my
incumbent colleagues,
judges and know that
justices several of
would be them have
prejudiced had their
because their qualifications
qualifications , their
may suddenly inability to
be reviewed. submit
documentary
- "The SC requirements,
itself really waived.
wanted to Several of
examine them. So if
every little the JBC was
thing did in correct in
the past in the saying that
hope that an attempt to
they would submit the
find requirements,
something the good faith
scandalous accorded to
about my those who
life..." had missing
requirements,
- "It also should be
prejudices accorded to
more than 14 of us,
2000 judges including

355
 prevented by the said rule is already manifest. In fact, in the May 2, 2018 issue of the Philippine Daily
those who
Inquirer, certain individuals, including lawyers, already made their own pre-judgment on the case:
have
GRANTING THE QUO WARRANTO PETITION IS ILLEGAL, BETRAYAL OF DEMOCRACY
complained
loudly
THE SUPREME COURT TRAMPLED ON the Philippine Constitution and betrayed its primary duty to the
against me
Filipino people when it violated Chief Justice Ma. Loudes Sereno's right to due process.
among my
colleagues,
The Supreme Court abandoned its chief mandate to ensure an independent judiciary by accepting bankrupt
why am the
Quo Warranto petition and refusing to inhibit five openly biased Justices.
only one
being singled
The Judiciary's Code of Conduct decrees resistance against attempts to subvert judicial independence. It
out? The
orders judges to be impartial. The five justices bowed to Congress' impeaclunent summons. They attacked
rules of
the Chief Justice in proceedings that refused her right to question accusers. Doing so, they prejudged the
inability to
Chief Justice and betrayed the Court's position as co-equal branch of the government.
submit all the
SALNs were
We repudiate as illegal ruling tainted with these shameful acts.
waived in
favor of 14
The Quo Warranto action against CJ Sereno, filed beyond the one year deadline, is itself illegal and
out of 20
unconstitutional the Supreme Court has affirmed many times that impeachment is the only mode for
applicants,
removing an impeachable officer.
out of the
were
In accepting this farcical petition, it crushes constitutional checks and balances it threatens every Filipino
shortlisted.
citizen's right to free, impartial justice system.
Why is the
rule being
The State derives its power from the people. When the key instruments of the State conspire to subvert the
invoked only
Constitution and democracy, the people must rise as the last bastion of our rights and freedoms.
against me?
And so it
We challenge the Supreme Court: Pull back from the brink. Do not be party to the death of judicial
would appear
independence. Heed the Constitution. OBEY THE CODE OF JUDICIAL CONDUCT. COMPEL THE
that this is
INHIBITION OF THE BIASED 5. DISMISS THE ILLEGAL QUO WARRANTO PETITION!
selected
targeting"
If the Biased will not inhibit, then we call on them to resign. The people will not acccept any Decision
The public actuation of respondent showing disdain and contempt towards some Members of the Court tainted by gross injustice and Justices who cannot act with justice. (Emphasis ours)
whom she dubbed as "Biased 5" later increased and modified to "Biased 6" can no longer be tolerated. She It could readily be seen that such statements do not only "tend to" but categorically force and influence the
may be held liable for disbarment for violating the Canons of Professional Responsibility for violating deliberative and decision-making process of this Court. Notably, the threatening tenor could not go
the sub judice rule by repeatedly discussing the merits of the quo warranto petition in different fora and for unnoticed.
casting aspersions and ill motives to the Members of the Court even before decision is made, designed to
affect the results of the Court's collegial vote and influence public opinion. This wrongful actuation To be sure, the Court is not merely being unreasonably sensitive in addressing this matter, as in fact, it
exemplify poor regard for the judicial system and may amount to conduct unbecoming of Justice and guarantees that it is not swayed or influenced by such attacks and maintains its judicial independence in
lawyer. resolving this controversial case. However, when aggressive actions are taken against the Judiciary as an
institution and clouds of doubt are casted upon the people's faith in the administration of justice, especially
Such actions, indeed, resulted to the obfuscation of the issues on hand, camouflaging the charges against her so when the same are perpetrated by members of the Bar, this Court cannot be apathetic to and is not
with assaults to judicial independence, and falsely conditioning the public's mind that this is fight for helpless against such attacks, but the prudent thing to do is to stand and deal with it head on.
democracy. Once and for all, it should be stated that this is not fight for democracy nor for judicial Epilogue
independence. This is an undertaking of the Court's duty, as it is called for by the Republic, to judicially
determine and settle the uncertainty in the qualification, or otherwise, of respondent to sit on the highest The foregoing discourse thins down to public officer's accountability to the public. The very purpose and
position in the Judiciary. nature of public office is grounded upon it being public trust. No less than our Constitution gave special
importance on the principle of public office being public trust. Section 1, Article XI of the 1987 Constitution
The detrimental effect of this open and blatant disregard of the sub judice rule or the evil sought to be categorically states that:

356
Section 1. Public office is public trust. Public officers and employees must at all times be accountable WHEREFORE, the Petition for Quo Warranto is GRANTED. Respondent Maria Lourdes P.A. Sereno is
to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism found DISQUALIFIED from and is hereby adjudged GUILTY of UNLAWFULLY HOLDING and
and justice, and lead modest lives. EXERCISING the OFFICE OF THE CHIEF JUSTICE. Accordingly, Respondent Maria Lourdes P. A.
It is therefore an established principle that public office is not "property" but is public trust or agency, Sereno is OUSTED and EXCLUDED therefrom.
governed by the Constitution and by existing laws. There is no Torrens title to public office. Justice
Malcolm, in Cornejo v. Gabriel and Provincial Board of Rizal,331 expounded on this principle, viz.: The position of the Chief Justice of the Supreme Court is declared vacant and the Judicial and Bar Council is
In the case of Taylor v. Beckham ([1899], 178, U. S., 548), Mr. Chief Justice Fuller said that: "Decisions are directed to commence the application and nomination process.
numerous to the effect that public offices are mere agencies or trust, and not property as such." The basic
idea of government in the Philippine Islands, as in the United States, is that of popular representative This Decision is immediately executory without need of further action from the Court.
government, the officers being mere agents and not rulers of the people, one where no one man or set
of men has proprietary or contractual right to an office, but where every officer accepts office Respondent Maria Lourdes P.A. Sereno is ordered to SHOW CAUSE within ten (10) days from receipt
pursuant to the provisions of the law and holds the office as trust for the people whom he hereof why she should not be sanctioned for violating the Code of Professional Responsibility and the Code
represents.332 (Emphasis ours) of Judicial Conduct for transgressing the sub judice rule and for casting aspersions and ill motives to the
The right to hold public office under our political system is therefore not natural right. It exists, when it Members of the Supreme Court.
exists at all, only because and by virtue of some law expressly or impliedly creating and conferring
it.333 Needless to say, before one can hold public office, he or she must be eligible in accordance with the SO ORDERED.
qualifications fixed by law and the authority conferring and creating the office. There is no such thing as
vested interest or an estate in an office, or even an absolute right to hold office public officer who is not
truthful, not forthright, in complying with the qualifications to public office, perforce, has not legally
qualified, was not legally appointed, and consequently, has not legally assumed the said public office
disqualification cannot be erased by intentional concealment of certain defects in complying with the
qualifications to public office set by the Constitution and laws. The passage of time will not cure such
invalidity of holding public office, much less, foreclose the right and duty of the government, the keeper of
the said public office, to oust and remove the usurper.

One who claims title to public office must prove beyond cavil that he/she is legally qualified to the said
office, otherwise, he or she has no ground to stand upon his or her claim of title to the office and his or her
title may reasonably be challenged. qualification must be proved positively, clearly, and affirmatively. It
cannot be proved by mere acquiescence nor by estoppel or prescription. In the same vein, disqualification
cannot be obliterated by intentional concealment thereof. As matter of fact, such concealment is clear
manifestation of lack of integrity, probity, and honesty. It cannot be over-emphasized that public service
requires integrity. For this reason, public servants must, at all times, exhibit the highest sense of honesty. By
the very nature of their duties and responsibilities, they must faithfully adhere to, and hold sacred and render
inviolate the constitutional principle that public office is public trust. 334 The expectation of strong adherence
to this principle escalates proportionately as one ascends to public office. John Adams, then President of the
United States, said, "society's demands for moral authority and character increase as the importance of the
position increases."

In this case, it was found that respondent is ineligible to hold the Chief Justice of the Supreme Court
position for lack of integrity on account of her failure to file substantial number of SALNs and also, her
failure to submit the required SALNs to the JBC during her application for the position. Again, one of the
Constitutional duties of public officer is to submit declaration under oath of his or her assets, liabilities, and
net worth upon assumption of office and as often thereafter as may be required by law. 335 When the
Constitution and the law exact obedience, public officers must comply and not offer excuses. When public
officer is unable or unwilling to comply, he or she must not assume office in the first place, or if already
holding one, he or she must vacate that public office because it is the correct and honorable thing to do.
public officer who ignores, trivializes or disrespects Constitutional and legal provisions, as well as the
canons of ethical standards, forfeits his or her right to hold and continue in that office.

357
 SECOND DIVISION
G.R. No. 131977 February 4, 1999
PEDRO MENDOZA, petitioner,
vs.
RAY ALLAS and GODOFREDO OLORES, respondents.
PUNO, J.:
Before us, petitioner prays for the execution of the decision of the trial court 1 granting his petition for quo
warrantowhich ordered his reinstatement as Director III, Customs Intelligence and Investigation Service,
and the payment of his back salaries and benefits.
Petitioner Pedro Mendoza joined the Bureau of Customs in 1972. He held the positions of Port Security
Chief from March 1972 to August 1972, Deputy Commissioner of Customs from August 1972 to September
1975, Acting Commissioner of Customs from September 1975 to April 1977 and Customs Operations Chief
I from October 1987 to February 1988. 2 On March 1, 1988, he was appointed Customs Service Chief of the
Customs Intelligence and Investigation Service (CIIS). In 1989, the position of Customs Service Chief was
reclassified by the Civil Service as "Director III" in accordance with Republic Act No. 6758 and National
Compensation Circular No. 50. Petitioner's position was thus categorized as "Director III, CIIS" and he
discharged the function and duties of said office.
On April 22, 1993, petitioner was temporarily designated as Acting District Collector, Collection District X,
Cagayan de Oro City. In his place, respondent Ray Allas was appointed as "Acting Director III" of the CIIS.
Despite petitioner's new assignment as Acting District Collector, however, he continued to receive the salary
and benefits of the position of Director III.
In September 1994, petitioner received a letter from Deputy Customs Commissioner Cesar Z. Dario,
informing him of his termination from the Bureau of Customs, in view of respondent Allas' appointment as
Director III by President Fidel V. Ramos. The pertinent portion of the letter reads:
Effective March 4, 1994, Mr. Ray Allas was appointed Director III by President Fidel V.
Ramos and as a consequence, [petitioner's] services were terminated without prejudice to
[his] claim for all government benefits due [him].
Attached to the letter was the appointment of respondent Ray Allas as "Director III, CIIS, Bureau
of Customs, vice Pedro Mendoza."
Petitioner wrote the Customs Commissioner demanding his reinstatement with full back wages and without
loss of seniority rights. No reply was made.
On December 2, 1994, petitioner filed a petition for quo warranto against respondent Allas before the
Regional Trial Court, Paranaque, Branch 258. 3 The case was tried and on September 11, 1995, a decision
was rendered granting the petition. The court found that petitioner was illegally terminated from office
without due process of law and in violation of his security of tenure, and that as he was deemed not to have
vacated his office, the appointment of respondent Allas to the same office was void ab initio. The court
ordered the ouster of respondent Allas from the position of Director III, and at the same time directed the
reinstatement of petitioner to the same position with payment of full back salaries and other benefits
appurtenant thereto.
Respondent Allas appealed to the Court of Appeals. On February 8, 1996, while the case was pending
before said court, respondent Allas was promoted by President Ramos to the position of Deputy
Commissioner of Customs for Assessment and Operations. As a consequence of this promotion, Petitioner
moved to dismiss respondent's appeal as having been rendered moot and academic. The Court of Appeals
granted the motion and dismissed the case accordingly. The order of dismissal became final and entry of
judgment was made on March 19, 1996.4
358
On May 9, 1996, petitioner filed with the court a quo a Motion for Execution of its decision. On July 24,
1996, the court denied the motion on the ground that the contested position vacated by respondent Allas was
now being occupied by respondent Godofredo Olores who was not a party to the quo warranto petition.5
Petitioner filed a special civil action for certiorari and mandamus with the Court of Appeals questioning the
order of the trial court. 6 On November 27, 1997, the Court of Appeals dismissed the petition. 7 Hence, this
recourse.
Petitioner claims that:
The Court of Appeals grossly erred in holding that a writ of execution may no longer be
issued, considering that respondent Olores who was not a party to the case now occupies
the subject position.8
The instant petition arose from a special civil action for quo warranto under Rule 66 of the Revised Rules of
Court. Quo warranto is a demand made by the state upon some individual or corporation to show by what
right they exercise some franchise or privilege appertaining to the state which, according to the Constitution
and laws of the land, they cannot legally exercise except by virtue of a grant or authority from the state. 9 In
other words, a petition for quo warranto is a proceeding to determine the right of a person to the use or
exercise of a franchise or office and to oust the holder from its enjoyment, if his claim is not well-founded,
or if he has forfeited his right to enjoy the privilege. 10 The action may be commenced for the Government
by the Solicitor General or the fiscal 11 against individuals who usurp a public office, against a public officer
whose acts constitute a ground for the forfeiture of his office, and against an association which acts as a
corporation without being legally incorporated. 12 The action may also be instituted by an individual in his
own name who claims to be entitled to the public office or position usurped or unlawfully held or exercised
by another. 13
Where the action is filed by a private person, he must prove that he is entitled to the controverted position,
otherwise respondent has a right to the undisturbed possession of the office. 14 If the court finds for the
respondent, the judgment should simply state that the respondent is entitled to the office. 15 If, however, the
court finds for the petitioner and declares the respondent guilty of usurping, intruding into, or unlawfully
holding or exercising the office, judgment may be rendered as follows:
Sec. 10. Judgment where usurpation found. — When the defendant is found guilty of
usurping, intruding into, or unlawfully holding or exercising an office, position, right,
privilege, or franchise, judgment shall be rendered that such defendant be ousted and
altogether excluded therefrom, and that the plaintiff or relator, as the case may be,
recover his costs. Such further judgment may be rendered determining the respective
rights in and to the office, position, right, privilege, or franchise of all the parties to the
action as justice requires.
If it is found that the respondent or defendant is usurping or intruding into the office, or unlawfully
holding the same, the court may order:
(1) The ouster and exclusion of the defendant from office;
(2) The recovery of costs by plaintiff or relator;
(3) The determination of the respective rights in and to the office, position, right,
privilege or franchise of all the parties to the action as justice requires. 16
The character of the judgment to be rendered in quo warranto rests to some extent in the discretion of the
court and on the relief sought. 17 In the case at bar, petitioner prayed for the following relief:
WHEREFORE, it is respectfully prayed that respondent be ousted and altogether
excluded from the position of Director III, Customs Intelligence and Investigation
Service of the Bureau of Customs, and petitioner be seated to the position as the one
legally appointed and entitled thereto.
Other reliefs, just or equitable in the premises, are likewise prayed for. 18
In granting the petition, the trial court ordered that:
 WHEREFORE, viewed in the light of the foregoing, judgment is hereby rendered
granting this petition for quo warranto by:
1. Ousting and excluding respondent Ray Allas from the position of
Director III, Customs Intelligence and Investigation Service of the
Bureau of Customs; and
2. Reinstating petitioner Pedro C. Mendoza, Jr. to the position of
Director III, Customs Intelligence and Investigation Service of the
Bureau of Customs with full back wages and other monetary benefits
appurtenant thereto from the time they were withheld until
reinstated. 19
The trial court found that respondent Allas usurped the position of "Director III, Chief of the Customs
Intelligence and Investigation Service." Consequently, the court ordered that respondent Allas be ousted
from the contested position and that petitioner be reinstated in his stead. Although petitioner did not
specifically pray for his back salaries, the court ordered that he be paid his "full back wages and other
monetary benefits" appurtenant to the contested position "from the time they were withheld until reinstated."
The decision of the trial court had long become final and executory, and petitioner prays for its execution.
He alleges that he should have been reinstated despite respondent Olores' appointment because the subject
position was never vacant to begin with. Petitioner's removal was illegal and he was deemed never to have
vacated his office when respondent Allas was appointed to the same. Respondent Allas' appointment was
null and void and this nullity allegedly extends to respondent Olores, his successor-in-interest. 20
Ordinarily, a judgment against a public officer in regard to a public right binds his successor in office. This
rule, however, is not applicable in quo warranto cases. 21 A judgment in quo warranto does not bind the
respondent's successor in office, even though such successor may trace his title to the same source. This
follows from the nature of the writ of quo warranto itself. It is never directed to an officer as such, but
always against the person — to determine whether he is constitutionally and legally authorized to perform
any act in, or exercise any function of the office to which he lays claim. 22 In the case at bar, the petition
for quo warranto was filed by petitioner solely against respondent Allas. What was threshed out before the
trial court was the qualification and right of petitioner to the contested position as against respondent Ray
Allas, not against Godofredo Olores. The Court of Appeals did not err in denying execution of the trial
court's decision.
Petitioner has apprised this Court that he reached the compulsory retirement age of sixty-five (65) years on
November 13, 1997. Reinstatement not being possible, petitioner now prays for the payment of his back
salaries and other benefits from the time he was illegally dismissed until finality of the trial court's
decision. 23
Respondent Allas cannot be held personally liable for petitioner's back salaries and benefits. He was merely
appointed to the subject position by the President of the Philippines in the exercise of his constitutional
power as Chief Executive. Neither can the Bureau of Customs be compelled to pay the said back salaries
and benefits of petitioner. The Bureau of Customs was not a party to the petition for quo warranto. 24
IN VIEW WHEREOF, the petition is denied and the decision of the Court of Appeals in CA-G.R. SP No.
41801 is affirmed.
SO ORDERED.

359
 FIRST DIVISION
G.R. No. 168696 February 28, 2006
MA. LUTGARDA P. CALLEJA, JOAQUIN M. CALLEJA, JR., JADELSON PETER P. CALLEJA, MA.
JESSICA T. FLORES, MERCIE C. TIPONES and PERFECTO NIXON C. TABORA, Petitioners,
vs.
JOSE PIERRE A. PANDAY, AUGUSTO R. PANDAY and MA. THELNA P. MALLARI, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the petition for review on certiorari assailing the Order1 of the Regional Trial Court of San
Jose, Camarines Sur, Branch 58 (RTC-Br. 58) issued on July 13, 2005.
The antecedent facts are as follows.
On May 16, 2005, respondents filed a petition with the Regional Trial Court of San Jose, Camarines Sur
for quo warranto with Damages and Prayer for Mandatory and Prohibitory Injunction, Damages and
Issuance of Temporary Restraining Order against herein petitioners. Respondents alleged that from 1985 up
to the filing of the petition with the trial court, they had been members of the board of directors and officers
of St. John Hospital, Incorporated, but sometime in May 2005, petitioners, who are also among the
incorporators and stockholders of said corporation, forcibly and with the aid of armed men usurped the
powers which supposedly belonged to Respondents.
On May 24, 2005, RTC-Br. 58 issued an Order transferring the case to the Regional Trial Court in Naga
City. According to RTC-Br. 58, since the verified petition showed petitioners therein (herein respondents) to
be residents of Naga City, then pursuant to Section 7, Rule 66 of the 1997 Rules of Civil Procedure, the
action for quo warrantoshould be brought in the Regional Trial Court exercising jurisdiction over the
territorial area where the respondents or any of the respondents resides. However, the Executive Judge of
RTC, Naga City refused to receive the case folder of the subject case for quo warranto, stating that improper
venue is not a ground for transferring a quo warranto case to another administrative jurisdiction.
The RTC-Br. 58 then proceeded to issue and serve summons on herein petitioners (respondents below).
Petitioner Tabora filed his Answer dated June 8, 2005, raising therein the affirmative defenses of (1)
improper venue, (2) lack of jurisdiction, and (3) wrong remedy of quo warranto. Thereafter, the other
petitioners also filed their Answer, also raising the same affirmative defenses. All the parties were then
required to submit their respective memoranda.
On July 13, 2005, RTC-Br. 58 issued the assailed Order, the pertinent portions of which read as follows:
It is undisputed that the plaintiffs’ cause of action involves controversies arising out of intra-corporate
relations, between and among stockholders, members or associates of the St. John Hospital Inc. which
originally under PD 902-A approved on March 11, 1976 is within the original and exclusive jurisdiction of
the Securities and Exchange Commission to try and decide in addition to its regulatory and adjudicated
functions (Section 5, PD 902-A). Upon the advent of RA 8799 approved on July 19, 2000, otherwise known
as the Securities and Regulation Code, the Commission’s jurisdiction over all cases enumerated in Section 5,
Presidential Decree 902-A were transferred ["]to the Court of general jurisdiction or the appropriate
Regional Trial Court with a proviso that the "Supreme Court in the exercise of its authority may designate
the Regional Trial Court branches that shall exercise jurisdiction over these cases." Pursuant to this mandate
of RA 8799, the Supreme Court in the exercise of said mandated authority, promulgated on November 21,
2000, A.M. No. 00-11-03-SC which took effect 15 December 2000 designated certain branches of the
Regional Trial Court to try and decide Securities and Exchange Commission Cases arising within their
respective territorial jurisdiction with respect to the National Capital Region and within the
respective provincesin the First to Twelve Judicial Region. Accordingly, in the Province of Camarines Sur,
(Naga City) RTC Branch 23 presided by the Hon. Pablo M. Paqueo, Jr. was designated as "special court"
(Section 1, A.M. No. 00-11-03-SC).
Subsequently, on January 23, 2001, supplemental Administrative Circular No. 8-01 which took effect on
March 1, 2001 was issued by the Supreme Court which directed that "all SEC cases originally assigned or
360
transmitted to the regular Regional Trial Court shall be transferred to branches of the Regional Trial Court
specially designated to hear such cases in accordance with A.M. No. 00-11-03-SC.
On March 13, 2001, A.M. No. 01-2-04 SC was promulgated and took effect on April 1, 2001.
From the foregoing discussion and historical background relative to the venue and jurisdiction to try and
decide cases originally enumerated in Section 5 of PD 902-A and later under Section 5.2 of RA 8799, it is
evident that the clear intent of the circular is to bestow the juridiction "to try and decide these cases to the
"special courts" created under A.M. No. 00-11-03-SC. . . .
Under Section 8, of the Interim Rules, [a] Motion to Dismiss is among the prohibited pleadings. On the
otherhand, the Supreme Court under Administrative Order 8-01 has directed the transfer from the regular
courts to the branches of the Regional Trial Courts specially designated to try and decide intra-corporate
dispute.
In the light of the above-noted observations and discussion, the Motion to Dismiss is DENIED pursuant to
the Interim Rules of Procedure for Intra-Corporate Controversies (A.M. No. 01-2-04-SC) which mandates
that motion to dismiss is a prohibited pleading (Section 8) and in consonance with Administrative Order 8-
01 of the Supreme Court dated March 1, 2001, this case is hereby ordered remanded to the Regional Trial
Court Branch 23, Naga City which under A.M. No. 00-11-03-SC has been designated as special court to try
and decide intra-corporate controversies under R.A. 8799.
The scheduled hearing on the prayer for temporary restraining order and preliminary injunction set on July
18, 2005 is hereby cancelled.
For reasons of comity the issue of whether Quo Warranto is the proper remedy is better left to the court of
competent jurisdiction to rule upon.
SO ORDERED. 2
Petitioners no longer moved for reconsideration of the foregoing Order and, instead, immediately elevated
the case to this Court via a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure.
The petition raises the following issues:
I
WHETHER A BRANCH OF THE REGIONAL TRIAL COURT WHICH HAS NO
JURISDICTION TO TRY AND DECIDE A CASE HAS AUTHORITY TO REMAND THE
SAME TO ANOTHER CO-EQUAL COURT IN ORDER TO CURE THE DEFECTS ON
VENUE AND JURISDICTION
II
WHETHER OR NOT ADMINISTRATIVE CIRCULAR NO. 8-01 DATED JANUARY 23, 2001
WHICH TOOK EFFECT ON MARCH 1, 2001 MAY BE APPLIED IN THE PRESENT CASE
WHICH WAS FILED ON MAY 16, 2005. 3
In their Comment, respondents argue that the present petition should be denied due course and dismissed on
the grounds that (1) an appeal under Rule 45 is inappropriate in this case because the Order dated July 13,
2005 is merely an interlocutory order and not a final order as contemplated under Rule 45 of the 1997 Rules
of Civil Procedure; (2) a petition for review on certiorari under Rule 45 is the wrong remedy under A.M.
No. 04-9-07-SC, which provides that "all decisions and final orders in cases falling under the Interim Rules
of Corporate Rehabilitation and the Interim Rules of Procedure Governing Intra-Corporate Controversies
under Republic Act No. 8799 shall be appealable to the Court of Appeals through a petition for review under
Rule 43 of the Rules of Court;" and (3) the petition was intended merely to delay the proceedings in the trial
court because when the case was transferred to Branch 21 of the Regional Trial Court, said court granted
petitioners’ motion to hold the proceedings in view of the present petition pending before this Court.
Subsequently, petitioners also filed an Urgent Motion to Restore Status Quo Ante, alleging that on January
12, 2006, respondent Jose Pierre Panday, with the aid of 14 armed men, assaulted the premises of St. John
Hospital in Naga City, taking away the daily hospital collections estimated at ₱400,000.00.
The Court notes that, indeed, petitioners chose the wrong remedy to assail the Order of July 13, 2005. It is
hornbook principle that Rule 45 of the 1997 Rules of Civil Procedure governs appeals from judgments or
final orders.4 The Order dated July 13, 2005 is basically a denial of herein petitioners’ prayer in their
Answer for the dismissal of respondents’ case against them. As a consequence of the trial court’s refusal to
dismiss the case, it then directed the transfer of the case to another branch of the Regional Trial Court that
had been designated as a special court to hear cases formerly cognizable by the SEC. Verily, the order was
merely interlocutory as it does not dispose of the case completely, but leaves something more to be done on
its merits. Such being the case, the assailed Order cannot ordinarily be reviewed through a petition under
Rule 45. As we held in Tolentino v. Natanauan, 5 to wit:
In the case of Bangko Silangan Development Bank vs. Court of Appeals, the Court reiterated the well-settled
rule that:
. . . an order denying a motion to dismiss is merely interlocutory and therefore not appealable, nor can it be
the subject of a petition for review on certiorari. Such order may only be reviewed in the ordinary course of
law by an appeal from the judgment after trial. The ordinary procedure to be followed in that event is to file
an answer, go to trial, and if the decision is adverse, reiterate the issue on appeal from the final judgment. 6
It appears, however, that the longer this case remains unresolved, the greater chance there is for more
violence between the parties to erupt. In Philippine Airlines v. Spouses Kurangking,7 the Court proceeded to
give due course to a case despite the wrong remedy resorted to by the petitioner therein, stating thus:
While a petition for review on certiorari under Rule 45 would ordinarily be inappropriate to assail an
interlocutory order, in the interest, however, of arresting the perpetuation of an apparent error committed
below that could only serve to unnecessarily burden the parties, the Court has resolved to ignore the
technical flaw and, also, to treat the petition, there being no other plain, speedy and adequate remedy, as a
special civil action for certiorari. Not much, after all, can be gained if the Court were to refrain from now
making a pronouncement on an issue so basic as that submitted by the parties. 8
In this case, the basic issue of which court has jurisdiction over cases previously cognizable by the SEC
under Section 5, Presidential Decree No. 902-A (P.D. No. 902-A), and the propensity of the parties to resort
to violence behoove the Court to look beyond petitioners’ technical lapse of filing a petition for review
on certiorari instead of filing a petition for certiorari under Rule 65 with the proper court. Thus, the Court
shall proceed to resolve the case on its merits.
It should be noted that allegations in a complaint for quo warranto that certain persons usurped the offices,
powers and functions of duly elected members of the board, trustees and/or officers make out a case for an
intra-corporate controversy.9 Prior to the enactment of R.A. No. 8799, the Court, adopting Justice Jose Y.
Feria’s view, declared in Unilongo v. Court of Appeals 10 that Section 1, Rule 66 of the 1997 Rules of Civil
Procedure is "limited to actions of quo warranto against persons who usurp a public office, position or
franchise; public officers who forfeit their office; and associations which act as corporations without being
legally incorporated," while "[a]ctions of quo warrantoagainst corporations, or against persons who usurp an
office in a corporation, fall under the jurisdiction of the Securities and Exchange Commission and are
governed by its rules. (P.D. No. 902-A as amended)."11
However, R.A. No. 8799 was passed and Section 5.2 thereof provides as follows:
5.2. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No.
902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court:
Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. xxx
Therefore, actions of quo warranto against persons who usurp an office in a corporation, which were
formerly cognizable by the Securities and Exchange Commission under PD 902-A, have been transferred to
the courts of general jurisdiction. But, this does not change the fact that Rule 66 of the 1997 Rules of Civil
Procedure does not apply to quo warranto cases against persons who usurp an office in a private
corporation. Presently, Section 1(a) of Rule 66 reads thus:
361
Section 1. Action by Government against individuals. – An action for the usurpation of a public office,
position or franchise may be commenced by a verified petition brought in the name of the Republic of the
Philippines against
(a) A person who usurps, intrudes into, or unlawfully holds or exercises a public office, position or
franchise;
xxxx
As explained in the Unilongo12 case, Section 1(a) of Rule 66 of the present Rules no longer contains the
phrase "or an office in a corporation created by authority of law" which was found in the old Rules. Clearly,
the present Rule 66 only applies to actions of quo warranto against persons who usurp a public office,
position or franchise; public officers who forfeit their office; and associations which act as corporations
without being legally incorporated despite the passage of R.A. No. 8799. It is, therefore, The Interim Rules
of Procedure Governing Intra-Corporate Controversies Under R.A. No. 8799 (hereinafter the Interim Rules)
which applies to the petition for quo warrantofiled by respondents before the trial court since what is being
questioned is the authority of herein petitioners to assume the office and act as the board of directors and
officers of St. John Hospital, Incorporated.
The Interim Rules provide thus:
Section 1. (a) Cases covered. – These Rules shall govern the procedure to be observed in civil
cases involving the following:
xxxx
(2) Controversies arising out of intra-corporate, partnership, or association relations, between and
among stockholders, members, or associates, and between, any or all of them and the corporation,
partnership, or association of which they are stockholders, members, or associates, respectively;
(3) Controversies in the election or appointment of directors, trustees, officers, or managers of
corporations, partnerships, or associations;
xxxx
SEC. 5. Venue. – All actions covered by these Rules shall be commenced and tried in the Regional
Trial Court which has jurisdiction over the principal office of the corporation, partnership, or
association concerned. xxx (Emphasis ours)
Pursuant to Section 5.2 of R.A. No. 8799, the Supreme Court promulgated A.M. No. 00-11-03-SC (effective
December 15, 2000) designating certain branches of the Regional Trial Courts to try and decide cases
formerly cognizable by the Securities and Exchange Commission. For the Fifth Judicial Region, this Court
designated the following branches of the Regional Trial Court, to wit:
Camarines Sur (Naga City) Branch 23, Judge Pablo M. Paqueo, Jr.
Albay (Legaspi City) Branch 4, Judge Gregorio A. Consulta
Sorsogon (Sorsogon) Branch 52, Judge Honesto A. Villamor
Subsequently, the Court promulgated A.M. No. 03-03-03-SC, effective July 1, 2003, which provides that:
1. The Regional Courts previously designated as SEC Courts through the: (a) Resolutions of this
Court dated 21 November 2000, 4 July 2001, 12 November 2002, and 9 July 2002, all issued in
A.M. No. 00-11-03-SC, (b) Resolution dated 27 August 2001 in A.M. No. 01-5-298-RTC; and (c)
Resolution dated 8 July 2002 in A.M. No. 01-12-656-RTC are hereby DESIGNATED and shall
be CALLED as Special Commercial Courts to try and decide cases involving violations of
Intellectual Property Rights which fall within their jurisdiction and those cases formerly cognizable
by the Securities and Exchange Commission;
xxxx
4. The Special Commercial Courts shall have jurisdiction over cases arising within their respective
territorial jurisdiction with respect to the National Capital Judicial Region and within the
respective provinces with respect to the First to Twelfth Judicial Regions. Thus, cases shall be filed
in the Office of the Clerk of Court in the official station of the designated Special Commercial
Court; (Emphasis ours)
The next question then is, which branch of the Regional Trial Court has jurisdiction over the present action
for quo warrato? Section 5 of the Interim Rules provides that the petition should be commenced and tried in
the Regional Trial Court that has jurisdiction over the principal office of the corporation. It is undisputed
that the principal office of the corporation is situated at Goa, Camarines Sur. Thus, pursuant to A.M. No. 00-
11-03-SC and A.M. No. 03-03-03-SC, it is the Regional Trial Court designated as Special Commercial
Courts in Camarines Sur which shall have jurisdiction over the petition for quo warranto filed by herein
Respondents.
Evidently, the RTC-Br. 58 in San Jose, Camarines Sur is bereft of jurisdiction over respondents’ petition
for quo warranto. Based on the allegations in the petition, the case was clearly one involving an intra-
corporate dispute. The trial court should have been aware that under R.A. No. 8799 and the aforementioned
administrative issuances of this Court, RTC-Br. 58 was never designated as a Special Commercial Court;
hence, it was never vested with jurisdiction over cases previously cognizable by the SEC.
Such being the case, RTC-Br. 58 did not have the requisite authority or power to order the transfer of the
case to another branch of the Regional Trial Court. The only action that RTC-Br. 58 could take on the matter
was to dismiss the petition for lack of jurisdiction. In HLC Construction and Development Corp. v. Emily
Homes Subdivision Homeowners’ Association,13 the Court held that the trial court, having no jurisdiction
over the subject matter of the complaint, should dismiss the same so the issues therein could be
expeditiously heard and resolved by the tribunal which was clothed with jurisdiction.
Note, further, that respondents’ petition for quo warranto was filed as late as 2005. A.M. No. 03-03-03-SC
took effect as early as July 1, 2003 and it was clearly provided therein that such petitions shall be filed in the
Office of the Clerk of Court in the official station of the designated Special Commercial Court. Since the
official station of the designated Special Commercial Court for Camarines Sur is the Regional Trial Court in
Naga City, respondents should have filed their petition with said court. A.M. No. 00-11-03-SC having been
in effect for four years and A.M. No. 03-03-03-SC having been in effect for almost two years by the time
respondents filed their petition, there is no cogent reason why respondents were not aware of the appropriate
court where their petition should be filed.
The ratiocination of RTC-Br.58 that Administrative Circular No. 08-2001 authorized said trial court to order
the transfer of respondents’ petition to the Regional Trial Court of Naga City is specious because as of the
time of filing of the petition, A.M. No. 03-03-03-SC, which clearly stated that cases formerly cognizable by
the SEC should be filed with the Office of the Clerk of Court in the official station of the designated Special
Commercial Court,had been in effect for almost two years. Thus, the filing of the petition with the Regional
Trial Court of San Jose, Camarines Sur, which had no jurisdiction over those kinds of actions, was clearly
erroneous.
WHEREFORE, the petition is GIVEN DUE COURSE and GRANTED. The Order of the Regional Trial
Court of San Jose, Camarines Sur dated July 13, 2005 is SET ASIDE for being NULL and VOID. The
petition for quo warranto in Civil Case No. T-1007 (now re-docketed as SEC Case No. RTC 2005-0001),
entitled "Jose Pierre A. Panday, et al. v. Sps. Joaquin M. Calleja, Jr., et al." is ordered DISMISSED.
SO ORDERED.

362
 EN BANC
G.R. Nos. 179431-32 June 22, 2010
LUIS K. LOKIN, JR., as the second nominee of CITIZENS BATTLE AGAINST CORRUPTION
(CIBAC),Petitioner,
vs.
COMMISSION ON ELECTIONS and the HOUSE OF REPRESENTATIVES, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 180443
LUIS K. LOKIN, JR., Petitioner,
vs.
COMMISSION ON ELECTIONS (COMELEC), EMMANUEL JOEL J. VILLANUEVA, CINCHONA C.
GONZALES and ARMI JANE R. BORJE, Respondents.
DECISION
BERSAMIN, J.:
The principal question posed in these consolidated special civil actions for certiorari and mandamus is
whether the Commission on Elections (COMELEC) can issue implementing rules and regulations (IRRs)
that provide a ground for the substitution of a party-list nominee not written in Republic Act (R.A.) No.
7941,1 otherwise known as the Party-List System Act, the law that the COMELEC thereby implements.
Common Antecedents
The Citizens’ Battle Against Corruption (CIBAC) was one of the organized groups duly registered under the
party-list system of representation that manifested their intent to participate in the May 14, 2007
synchronized national and local elections. Together with its manifestation of intent to participate, 2 CIBAC,
through its president, Emmanuel Joel J. Villanueva, submitted a list of five nominees from which its
representatives would be chosen should CIBAC obtain the required number of qualifying votes. The
nominees, in the order that their names appeared in the certificate of nomination dated March 29,
2007,3 were: (1) Emmanuel Joel J. Villanueva; (2) herein petitioner Luis K. Lokin, Jr.; (3) Cinchona C.
Cruz-Gonzales; (4) Sherwin Tugna; and (5) Emil L. Galang. The nominees’ certificates of acceptance were
attached to the certificate of nomination filed by CIBAC. The list of nominees was later published in two
newspapers of general circulation, The Philippine Star News4 (sic) and The Philippine Daily Inquirer.5
Prior to the elections, however, CIBAC, still through Villanueva, filed a certificate of nomination,
substitution and amendment of the list of nominees dated May 7, 2007, 6 whereby it withdrew the
nominations of Lokin, Tugna and Galang and substituted Armi Jane R. Borje as one of the nominees. The
amended list of nominees of CIBAC thus included: (1) Villanueva, (2) Cruz-Gonzales, and (3) Borje.
Following the close of the polls, or on June 20, 2007, Villanueva sent a letter to COMELEC Chairperson
Benjamin Abalos,7 transmitting therewith the signed petitions of more than 81% of the CIBAC members, in
order to confirm the withdrawal of the nomination of Lokin, Tugna and Galang and the substitution of
Borje. In their petitions, the members of CIBAC averred that Lokin and Tugna were not among the
nominees presented and proclaimed by CIBAC in its proclamation rally held in May 2007; and that Galang
had signified his desire to focus on his family life.
On June 26, 2007, CIBAC, supposedly through its counsel, filed with the COMELEC en banc sitting as the
National Board of Canvassers a motion seeking the proclamation of Lokin as its second nominee. 8 The right
of CIBAC to a second seat as well as the right of Lokin to be thus proclaimed were purportedly based on
Party-List Canvass Report No. 26, which showed CIBAC to have garnered a grand total of 744,674 votes.
Using all relevant formulas, the motion asserted that CIBAC was clearly entitled to a second seat and Lokin
to a proclamation.
The motion was opposed by Villanueva and Cruz-Gonzales.
Notwithstanding Villanueva’s filing of the certificate of nomination, substitution and amendment of the list
of nominees and the petitions of more than 81% of CIBAC members, the COMELEC failed to act on the
363
matter, prompting Villanueva to file a petition to confirm the certificate of nomination, substitution and
amendment of the list of nominees of CIBAC on June 28, 2007. 9
On July 6, 2007, the COMELEC issued Resolution No. 8219, 10 whereby it resolved to set the matter
pertaining to the validity of the withdrawal of the nominations of Lokin, Tugna and Galang and the
substitution of Borje for proper disposition and hearing. The case was docketed as E.M. No. 07-054.
In the meantime, the COMELEC en banc, sitting as the National Board of Canvassers, issued National
Board of Canvassers (NBC) Resolution No. 07-60 dated July 9, 200711 to partially proclaim the following
parties, organizations and coalitions participating under the Party-List System as having won in the May 14,
2007 elections, namely: Buhay Hayaan Yumabong, Bayan Muna, CIBAC, Gabriela Women's Party,
Association of Philippine Electric Cooperatives, Advocacy for Teacher Empowerment Through Action,
Cooperation and Harmony Towards Educational Reforms, Inc., Akbayan! Citizen's Action Party, Alagad,
Luzon Farmers Party, Cooperative-Natco Network Party, Anak Pawis, Alliance of Rural Concerns and
Abono; and to defer the proclamation of the nominees of the parties, organizations and coalitions with
pending disputes until final resolution of their respective cases.
The COMELEC en banc issued another resolution, NBC Resolution No. 07-72 dated July 18,
2007,12 proclaiming Buhay Hayaan Yumabong as entitled to 2 additional seats and Bayan Muna, CIBAC,
Gabriela Women's Party, and Association of Philippine Electric Cooperatives to an additional seat each; and
holding in abeyance the proclamation of the nominees of said parties, organizations and coalitions with
pending disputes until the final resolution of their respective cases.
With the formal declaration that CIBAC was entitled to an additional seat, Ricardo de los Santos,
purportedly as secretary general of CIBAC, informed Roberto P. Nazareno, Secretary General of the House
of Representatives, of the promulgation of NBC Resolution No. 07-72 and requested that Lokin be formally
sworn in by Speaker Jose de Venecia, Jr. to enable him to assume office. Nazareno replied, however, that
the request of Delos Santos could not be granted because COMELEC Law Director Alioden D. Dalaig had
notified him of the pendency of E.M. 07-054.
On September 14, 2007, the COMELEC en banc resolved E.M. No. 07-05413 thuswise:
WHEREFORE, considering the above discussion, the Commission hereby approves the withdrawal of the
nomination of Atty. Luis K. Lokin, Sherwin N. Tugna and Emil Galang as second, third and fourth
nominees respectively and the substitution thereby with Atty. Cinchona C. Cruz-Gonzales as second
nominee and Atty. Armi Jane R. Borje as third nominee for the party list CIBAC. The new order of
CIBAC's nominees therefore shall be:
1. Emmanuel Joel J. Villanueva
2. Cinchona C. Cruz-Gonzales
3. Armi Jane R. Borje
SO ORDERED.
The COMELEC en banc explained that the actions of Villanueva in his capacity as the president of CIBAC
were presumed to be within the scope of his authority as such; that the president was charged by Section 1
of Article IV of the CIBAC By-Laws to oversee and direct the corporate activities, which included the act of
submitting the party's manifestation of intent to participate in the May 14, 2007 elections as well as its
certificate of nominees; that from all indications, Villanueva as the president of CIBAC had always been
provided the leeway to act as the party's representative and that his actions had always been considered as
valid; that the act of withdrawal, although done without any written Board approval, was accomplished with
the Board’s acquiescence or at least understanding; and that the intent of the party should be given
paramount consideration in the selection of the nominees.
As a result, the COMELEC en banc proclaimed Cruz-Gonzales as the official second nominee of
CIBAC.14 Cruz-Gonzales took her oath of office
as a Party-List Representative of CIBAC on September 17, 2007. 15
Precís of the Consolidated Cases
In G.R. No. 179431 and G.R. No. 179432, Lokin seeks through mandamus to compel respondent
COMELEC to proclaim him as the official second nominee of CIBAC.
In G.R. No. 180443, Lokin assails Section 13 of Resolution No. 7804 promulgated on January 12,
2007;16 and the resolution dated September 14, 2007 issued in E.M. No. 07-054 (approving CIBAC’s
withdrawal of the nominations of Lokin, Tugna and Galang as CIBAC’s second, third and fourth nominees,
respectively, and the substitution by Cruz-Gonzales and Borje in their stead, based on the right of CIBAC to
change its nominees under Section 13 of Resolution No. 7804). 17 He alleges that Section 13 of Resolution
No. 7804 expanded Section 8 of R.A. No. 7941.18the law that the COMELEC seeks to thereby implement.
In its comment, the COMELEC asserts that a petition for certiorari is an inappropriate recourse in law due to
the proclamation of Cruz-Gonzales as Representative and her assumption of that office; that Lokin’s proper
recourse was an electoral protest filed in the House of Representatives Electoral Tribunal (HRET); and that,
therefore, the Court has no jurisdiction over the matter being raised by Lokin.
For its part, CIBAC posits that Lokin is guilty of forum shopping for filing a petition for mandamus and a
petition for certiorari, considering that both petitions ultimately seek to have him proclaimed as the second
nominee of CIBAC.
Issues
The issues are the following:
(a) Whether or not the Court has jurisdiction over the controversy;
(b) Whether or not Lokin is guilty of forum shopping;
(c) Whether or not Section 13 of Resolution No. 7804 is unconstitutional and violates the Party-
List System Act; and
(d) Whether or not the COMELEC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in approving the withdrawal of the nominees of CIBAC and allowing the
amendment of the list of nominees of CIBAC without any basis in fact or law and after the close of
the polls, and in ruling on matters that were intra-corporate in nature.
Ruling
The petitions are granted.
A creating the possibility of conflicting decisions being rendered by the different fora upon the same issue. 20
The Court has jurisdiction over the case
The COMELEC posits that once the proclamation of the winning party-list organization has been done and
its nominee has assumed office, any question relating to the election, returns and qualifications of the
candidates to the House of Representatives falls under the jurisdiction of the HRET pursuant to Section 17,
Article VI of the 1987 Constitution. Thus, Lokin should raise the question he poses herein either in an
election protest or in a special civil action for quo warranto in the HRET, not in a special civil action for
certiorari in this Court.
We do not agree.
An election protest proposes to oust the winning candidate from office. It is strictly a contest between the
defeated and the winning candidates, based on the grounds of electoral frauds and irregularities, to
determine who between them has actually obtained the majority of the legal votes cast and is entitled to hold
the office. It can only be filed by a candidate who has duly filed a certificate of candidacy and has been
voted for in the preceding elections.
A special civil action for quo warranto refers to questions of disloyalty to the State, or of ineligibility of the
winning candidate. The objective of the action is to unseat the ineligible person from the office, but not to
install the petitioner in his place. Any voter may initiate the action, which is, strictly speaking, not a contest
where the parties strive for supremacy because the petitioner will not be seated even if the respondent may
be unseated.
The controversy involving Lokin is neither an election protest nor an action for quo warranto, for it
concerns a very peculiar situation in which Lokin is seeking to be seated as the second nominee of CIBAC.
Although an election protest may properly be available to one party-list organization seeking to unseat
364
another party-list organization to determine which between the defeated and the winning party-list
organizations actually obtained the majority of the legal votes, Lokin’s case is not one in which a nominee
of a particular party-list organization thereby wants to unseat another nominee of the same party-list
organization. Neither does an action for quo warranto lie, considering that the case does not involve the
ineligibility and disloyalty of Cruz-Gonzales to the Republic of the Philippines, or some other cause of
disqualification for her.
Lokin has correctly brought this special civil action for certiorari against the COMELEC to seek the review
of the September 14, 2007 resolution of the COMELEC in accordance with Section 7 of Article IX-A of the
1987 Constitution, notwithstanding the oath and assumption of office by Cruz-Gonzales. The constitutional
mandate is now implemented by Rule 64 of the 1997 Rules of Civil Procedure, which provides for the
review of the judgments, final orders or resolutions of the COMELEC and the Commission on Audit. As
Rule 64 states, the mode of review is by a petition for certiorari in accordance with Rule 65 to be filed in the
Supreme Court within a limited period of 30 days. Undoubtedly, the Court has original and exclusive
jurisdiction over Lokin’s petitions for certiorari and for mandamus against the COMELEC.
B
Petitioner is not guilty of forum shopping
Forum shopping consists of the filing of multiple suits involving the same parties for the same cause of
action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. Thus,
forum shopping may arise: (a) whenever as a result of an adverse decision in one forum, a party seeks a
favorable decision (other than by appeal or certiorari) in another; or (b) if, after having filed a petition in the
Supreme Court, a party files another petition in the Court of Appeals, because he thereby deliberately splits
appeals "in the hope that even as one case in which a particular remedy is sought is dismissed, another case
(offering a similar remedy) would still be open"; or (c) where a party attempts to obtain a writ of preliminary
injunction from a court after failing to obtain the writ from another court. 19
What is truly important to consider in determining whether forum shopping exists or not is the vexation
caused to the courts and the litigants by a party who accesses different courts and administrative agencies to
rule on the same or related causes or to grant the same or substantially the same reliefs, in the process
The filing of identical petitions in different courts is prohibited, because such act constitutes forum
shopping, a malpractice that is proscribed and condemned as trifling with the courts and as abusing their
processes. Forum shopping is an improper conduct that degrades the administration of justice. 21
Nonetheless, the mere filing of several cases based on the same incident does not necessarily constitute
forum shopping. The test is whether the several actions filed involve the same transactions and the same
essential facts and circumstances.22 The actions must also raise identical causes of action, subject matter, and
issues.23 Elsewise stated, forum shopping exists where the elements of litis pendentia are present, or where a
final judgment in one case will amount to res judicata in the other.24
Lokin has filed the petition for mandamus to compel the COMELEC to proclaim him as the second nominee
of CIBAC upon the issuance of NBC Resolution No. 07-72 (announcing CIBAC’s entitlement to an
additional seat in the House of Representatives), and to strike down the provision in NBC Resolution No.
07-60 and NBC Resolution No. 07-72 holding in abeyance "all proclamation of the nominees of concerned
parties, organizations and coalitions with pending disputes shall likewise be held in abeyance until final
resolution of their respective cases." He has insisted that the COMELEC had the ministerial duty to
proclaim him due to his being CIBAC’s second nominee; and that the COMELEC had no authority to
exercise discretion and to suspend or defer the proclamation of winning party-list organizations with
pending disputes.
On the other hand, Lokin has resorted to the petition for certiorari to assail the September 14, 2007
resolution of the COMELEC (approving the withdrawal of the nomination of Lokin, Tugna and Galang and
the substitution by Cruz-Gonzales as the second nominee and Borje as the third nominee); and to challenge
the validity of Section 13 of Resolution No. 7804, the COMELEC’s basis for allowing CIBAC’s withdrawal
of Lokin’s nomination.
Applying the test for forum shopping, the consecutive filing of the action for certiorari and the action for
mandamus did not violate the rule against forum shopping even if the actions involved the same parties,
because they were based on different causes of action and the reliefs they sought were different.
C non-contradictory requirements not contemplated by the Legislature. 33
Invalidity of Section 13 of Resolution No. 7804
The legislative power of the Government is vested exclusively in the Legislature in accordance with the
doctrine of separation of powers. As a general rule, the Legislature cannot surrender or abdicate its
legislative power, for doing so will be unconstitutional. Although the power to make laws cannot be
delegated by the Legislature to any other authority, a power that is not legislative in character may be
delegated.25
Under certain circumstances, the Legislature can delegate to executive officers and administrative boards the
authority to adopt and promulgate IRRs. To render such delegation lawful, the Legislature must declare the
policy of the law and fix the legal principles that are to control in given cases. The Legislature should set a
definite or primary standard to guide those empowered to execute the law. For as long as the policy is laid
down and a proper standard is established by statute, there can be no unconstitutional delegation of
legislative power when the Legislature leaves to selected instrumentalities the duty of making subordinate
rules within the prescribed limits, although there is conferred upon the executive officer or administrative
board a large measure of discretion. There is a distinction between the delegation of power to make a law
and the conferment of an authority or a discretion to be exercised under and in pursuance of the law, for the
power to make laws necessarily involves a discretion as to what it shall be.26
The authority to make IRRs in order to carry out an express legislative purpose, or to effect the operation
and enforcement of a law is not a power exclusively legislative in character, but is rather administrative in
nature. The rules and regulations adopted and promulgated must not, however, subvert or be contrary to
existing statutes. The function of promulgating IRRs may be legitimately exercised only for the purpose of
carrying out the provisions of a law. The power of administrative agencies is confined to implementing the
law or putting it into effect. Corollary to this is that administrative regulation cannot extend the law and
amend a legislative enactment. It is axiomatic that the clear letter of the law is controlling and cannot be
amended by a mere administrative rule issued for its implementation. Indeed, administrative or executive
acts shall be valid only when they are not contrary to the laws or the Constitution. 27
To be valid, therefore, the administrative IRRs must comply with the following requisites to be valid:28
1. Its promulgation must be authorized by the Legislature;
2. It must be within the scope of the authority given by the Legislature;
3. It must be promulgated in accordance with the prescribed procedure; and
4. It must be reasonable.
The COMELEC is constitutionally mandated to enforce and administer all laws and regulations relative to
the conduct of an election, a plebiscite, an initiative, a referendum, and a recall.29 In addition to the powers
and functions conferred upon it by the Constitution, the COMELEC is also charged to promulgate IRRs
implementing the provisions of the Omnibus Election Code or other laws that the COMELEC enforces and
administers.30
The COMELEC issued Resolution No. 7804 pursuant to its powers under the Constitution, Batas Pambansa
Blg. 881, and the Party-List System Act.31 Hence, the COMELEC met the first requisite.
The COMELEC also met the third requisite. There is no question that Resolution No. 7804 underwent the
procedural necessities of publication and dissemination in accordance with the procedure prescribed in the
resolution itself.
Whether Section 13 of Resolution No. 7804 was valid or not is thus to be tested on the basis of whether the
second and fourth requisites were met. It is in this respect that the challenge of Lokin against Section 13
succeeds.
365
As earlier said, the delegated authority must be properly exercised. This simply means that the resulting
IRRs must not be ultra vires as to be issued beyond the limits of the authority conferred. It is basic that an
administrative agency cannot amend an act of Congress,32 for administrative IRRs are solely intended to
carry out, not to supplant or to modify, the law. The administrative agency issuing the IRRs may not
enlarge, alter, or restrict the provisions of the law it administers and enforces, and cannot engraft additional
Section 8 of R.A. No. 7941 reads:
Section 8. Nomination of Party-List Representatives.-Each registered party, organization or coalition shall
submit to the COMELEC not later that forty-five (45) days before the election a list of names, not less than
five (5), from which party-list representatives shall be chosen in case it obtains the required number of votes.
A person may be nominated in one (1) list only. Only persons who have given their consent in writing may
be named in the list. The list shall not include any candidate of any elective office or a person who has lost
his bid for an elective office in the immediately preceding election. No change of names or alteration of the
order of nominees shall be allowed after the same shall have been submitted to the COMELEC except in
cases where the nominee dies, or withdraws in writing his nomination, becomes incapacitated in which case
the name of the substitute nominee shall be placed last in the list. Incumbent sectoral representatives in the
House of Representatives who are nominated in the party-list system shall not be considered resigned.
The provision is daylight clear. The Legislature thereby deprived the party-list organization of the right to
change its nominees or to alter the order of nominees once the list is submitted to the COMELEC, except
when: (a) the nominee dies; (b) the nominee withdraws in writing his nomination; or (c) the nominee
becomes incapacitated. The provision must be read literally because its language is plain and free from
ambiguity, and expresses a single, definite, and sensible meaning. Such meaning is conclusively presumed
to be the meaning that the Legislature has intended to convey. Even where the courts should be convinced
that the Legislature really intended some other meaning, and even where the literal interpretation should
defeat the very purposes of the enactment, the explicit declaration of the Legislature is still the law, from
which the courts must not depart.34 When the law speaks in clear and categorical language, there is no
reason for interpretation or construction, but only for application. 35Accordingly, an administrative agency
tasked to implement a statute may not construe it by expanding its meaning where its provisions are clear
and unambiguous.36
The legislative intent to deprive the party-list organization of the right to change the nominees or to alter the
order of the nominees was also expressed during the deliberations of the Congress, viz:
MR. LAGMAN: And again on Section 5, on the nomination of party list representatives, I do not see any
provision here which prohibits or for that matter allows the nominating party to change the nominees or to
alter the order of prioritization of names of nominees. Is the implication correct that at any time after
submission the names could still be changed or the listing altered?
MR. ABUEG: Mr. Speaker, that is a good issue brought out by the distinguished Gentleman from Albay and
perhaps a perfecting amendment may be introduced therein. The sponsoring committee will gladly consider
the same.
MR. LAGMAN: In other words, what I would like to see is that after the list is submitted to the COMELEC
officially, no more changes should be made in the names or in the order of listing.
MR. ABUEG: Mr. Speaker, there may be a situation wherein the name of a particular nominee has been
submitted to the Commission on Elections but before election day the nominee changed his political party
affiliation. The nominee is therefore no longer qualified to be included in the party list and the political party
has a perfect right to change the name of that nominee who changed his political party affiliation.
MR. LAGMAN: Yes of course. In that particular case, the change can be effected but will be the exception
rather than the rule. Another exception most probably is the nominee dies, then there has to be a change but
any change for that matter should always be at the last part of the list so that the prioritization made by the
party will not be adversely affected.37
The usage of "No" in Section 8 – "No change of names or alteration of the order of nominees shall be
allowed after the same shall have been submitted to the COMELEC except in cases where the nominee dies,
or withdraws in writing his nomination, or becomes incapacitated, in which case the name of the substitute
nominee shall be placed last in the list" – renders Section 8 a negative law, and is indicative of the
legislative intent to make the statute mandatory. Prohibitive or negative words can rarely, if ever, be
directory, for there is but one way to obey the command "thou shall not," and that is to completely refrain
from doing the forbidden act,38 subject to certain exceptions stated in the law itself, like in this case.
Section 8 does not unduly deprive the party-list organization of its right to choose its nominees, but merely
divests it of the right to change its nominees or to alter the order in the list of its nominees’ names after
submission of the list to the COMELEC.
The prohibition is not arbitrary or capricious; neither is it without reason on the part of lawmakers. The
COMELEC can rightly presume from the submission of the list that the list reflects the true will of the party-
list organization. The COMELEC will not concern itself with whether or not the list contains the real
intended nominees of the party-list organization, but will only determine whether the nominees pass all the
requirements prescribed by the law and whether or not the nominees possess all the qualifications and none
of the disqualifications. Thereafter, the names of the nominees will be published in newspapers of general
circulation. Although the people vote for the party-list organization itself in a party-list system of election,
not for the individual nominees, they still have the right to know who the nominees of any particular party-
list organization are. The publication of the list of the party-list nominees in newspapers of general
circulation serves that right of the people, enabling the voters to make intelligent and informed choices. In
contrast, allowing the party-list organization to change its nominees through withdrawal of their
nominations, or to alter the order of the nominations after the submission of the list of nominees circumvents
the voters’ demand for transparency. The lawmakers’ exclusion of such arbitrary withdrawal has eliminated
the possibility of such circumvention.
D To reword means to alter the wording of or to restate in other words; to rephrase is to phrase anew or in a
Exceptions in Section 8 of R.A. 7941 are exclusive
Section 8 of R.A. No. 7941 enumerates only three instances in which the party-list organization can
substitute another person in place of the nominee whose name has been submitted to the COMELEC,
namely: (a) when the nominee dies; (b) when the nominee withdraws in writing his nomination; and (c)
when the nominee becomes incapacitated.
The enumeration is exclusive, for, necessarily, the general rule applies to all cases not falling under any of
the three exceptions.
When the statute itself enumerates the exceptions to the application of the general rule, the exceptions are
strictly but reasonably construed. The exceptions extend only as far as their language fairly warrants, and all
doubts should be resolved in favor of the general provision rather than the exceptions. Where the general
rule is established by a statute with exceptions, none but the enacting authority can curtail the former. Not
even the courts may add to the latter by implication, and it is a rule that an express exception excludes all
others, although it is always proper in determining the applicability of the rule to inquire whether, in a
particular case, it accords with reason and justice.391avvphi1
The appropriate and natural office of the exception is to exempt something from the scope of the general
words of a statute, which is otherwise within the scope and meaning of such general words. Consequently,
the existence of an exception in a statute clarifies the intent that the statute shall apply to all cases not
excepted. Exceptions are subject to the rule of strict construction; hence, any doubt will be resolved in favor
of the general provision and against the exception. Indeed, the liberal construction of a statute will seem to
require in many circumstances that the exception, by which the operation of the statute is limited or
abridged, should receive a restricted construction.
E Effect of partial nullity of Section 13 of Resolution No. 7804
Section 13 of Resolution No. 7804 expanded
the exceptions under Section 8 of R.A. No. 7941
366
Section 13 of Resolution No. 7804 states:
Section 13. Substitution of nominees. – A party-list nominee may be substituted only when he dies, or his
nomination is withdrawn by the party, or he becomes incapacitated to continue as such, or he withdraws his
acceptance to a nomination. In any of these cases, the name of the substitute nominee shall be placed last in
the list of nominees.
No substitution shall be allowed by reason of withdrawal after the polls.
Unlike Section 8 of R.A. No. 7941, the foregoing regulation provides four instances, the fourth being when
the "nomination is withdrawn by the party."
Lokin insists that the COMELEC gravely abused its discretion in expanding to four the three statutory
grounds for substituting a nominee.
We agree with Lokin.
The COMELEC, despite its role as the implementing arm of the Government in the enforcement and
administration of all laws and regulations relative to the conduct of an election, 40 has neither the authority
nor the license to expand, extend, or add anything to the law it seeks to implement thereby. The IRRs the
COMELEC issues for that purpose should always accord with the law to be implemented, and should not
override, supplant, or modify the law. It is basic that the IRRs should remain consistent with the law they
intend to carry out.41
Indeed, administrative IRRs adopted by a particular department of the Government under legislative
authority must be in harmony with the provisions of the law, and should be for the sole purpose of carrying
the law’s general provisions into effect. The law itself cannot be expanded by such IRRs, because an
administrative agency cannot amend an act of Congress.42
The COMELEC explains that Section 13 of Resolution No. 7804 has added nothing to Section 8 of R.A. No.
7941,43because it has merely reworded and rephrased the statutory provision’s phraseology.
The explanation does not persuade.
new form.44 Both terms signify that the meaning of the original word or phrase is not altered.
However, the COMELEC did not merely reword or rephrase the text of Section 8 of R.A. No. 7941, because
it established an entirely new ground not found in the text of the provision. The new ground granted to the
party-list organization the unilateral right to withdraw its nomination already submitted to the COMELEC,
which Section 8 of R.A. No. 7941 did not allow to be done. Neither was the grant of the unilateral right
contemplated by the drafters of the law, who precisely denied the right to withdraw the nomination (as the
quoted record of the deliberations of the House of Representatives has indicated). The grant thus conflicted
with the statutory intent to save the nominee from falling under the whim of the party-list organization once
his name has been submitted to the COMELEC, and to spare the electorate from the capriciousness of the
party-list organizations.
We further note that the new ground would not secure the object of R.A. No. 7941 of developing and
guaranteeing a full, free and open party-list electoral system. The success of the system could only be
ensured by avoiding any arbitrariness on the part of the party-list organizations, by seeing to the
transparency of the system, and by guaranteeing that the electorate would be afforded the chance of making
intelligent and informed choices of their party-list representatives.
The insertion of the new ground was invalid. An axiom in administrative law postulates that administrative
authorities should not act arbitrarily and capriciously in the issuance of their IRRs, but must ensure that their
IRRs are reasonable and fairly adapted to secure the end in view. If the IRRs are shown to bear no
reasonable relation to the purposes for which they were authorized to be issued, they must be held to be
invalid and should be struck down.45
F
An IRR adopted pursuant to the law is itself law.46 In case of conflict between the law and the IRR, the law
prevails. There can be no question that an IRR or any of its parts not adopted pursuant to the law is no law at
all and has neither the force nor the effect of law.47 The invalid rule, regulation, or part thereof cannot be a
valid source of any right, obligation, or power.
Considering that Section 13 of Resolution No. 7804 – to the extent that it allows the party-list organization
to withdraw its nomination already submitted to the COMELEC – was invalid, CIBAC’s withdrawal of its
nomination of Lokin and the others and its substitution of them with new nominees were also invalid and
ineffectual. It is clear enough that any substitution of Lokin and the others could only be for any of the
grounds expressly stated in Section 8 of R.A. No. 7941. Resultantly, the COMELEC’s approval of CIBAC’s
petition of withdrawal of the nominations and its recognition of CIBAC’s substitution, both through its
assailed September 14, 2007 resolution, should be struck down for lack of legal basis. Thereby, the
COMELEC acted without jurisdiction, having relied on the invalidly issued Section 13 of Resolution No.
7804 to support its action.
WHEREFORE, we grant the petitions for certiorari and mandamus.
We declare Section 13 of Resolution No. 7804 invalid and of no effect to the extent that it authorizes a
party-list organization to withdraw its nomination of a nominee once it has submitted the nomination to the
Commission on Elections.
Accordingly, we annul and set aside:
(a) The resolution dated September 14, 2007 issued in E. M. No. 07-054 approving Citizens’ Battle
Against Corruption’s withdrawal of the nominations of Luis K. Lokin, Jr., Sherwin N. Tugna, and
Emil Galang as its second, third, and fourth nominees, respectively, and ordering their substitution
by Cinchona C. Cruz-Gonzales as second nominee and Armi Jane R. Borje as third nominee; and
(b) The proclamation by the Commission on Elections of Cinchona C. Cruz-Gonzales as a Party-
List Representative representing Citizens’ Battle Against Corruption in the House of
Representatives.
We order the Commission on Elections to forthwith proclaim petitioner Luis K. Lokin, Jr. as a Party-List
Representative representing Citizens’ Battle Against Corruption in the House of Representatives.
We make no pronouncements on costs of suit. SO ORDERED.

367
 EN BANC
G.R. No. 195229 October 9, 2012
EFREN RACEL ARA TEA, Petitioner,
vs.
COMMISSiON ON ELECTIONS and ESTELA D. ANTlPOLO, Respondents.
DECISION
CARPIO, J.:
The Case
This is a special civil action for certiorari1 seeking to review and nullify the Resolution2 dated 2 February
2011 and the Order3 dated 12 January 2011 of the Commission on Elections (COMELEC) En Banc in Dra.
Sigrid S. Rodolfo v. Romeo D. Lonzanida, docketed as SPA No. 09-158 (DC). The petition asserts that the
COMELEC issued the Resolution and Order with grave abuse of discretion amounting to lack or excess of
jurisdiction.
The Facts
Romeo D. Lonzanida (Lonzanida) and Estela D. Antipolo (Antipolo) were candidates for Mayor of San
Antonio, Zambales in the May 2010 National and Local Elections. Lonzanida filed his certificate of
candidacy on 1 December 2009.4 On 8 December 2009, Dra. Sigrid S. Rodolfo (Rodolfo) filed a petition
under Section 78 of the Omnibus Election Code to disqualify Lonzanida and to deny due course or to cancel
Lonzanida’s certificate of candidacy on the ground that Lonzanida was elected, and had served, as mayor of
San Antonio, Zambales for four (4) consecutive terms immediately prior to the term for the May 2010
elections. Rodolfo asserted that Lonzanida made a false material representation in his certificate of
candidacy when Lonzanida certified under oath that he was eligible for the office he sought election. Section
8, Article X of the 1987 Constitution5 and Section 43(b) of the Local Government Code6 both prohibit a local
elective official from being elected and serving for more than three consecutive terms for the same position.
The COMELEC Second Division rendered a Resolution7 on 18 February 2010 cancelling Lonzanida’s
certificate of candidacy. Pertinent portions of the 18 February 2010 Resolution read:
Respondent Lonzanida never denied having held the office of mayor of San Antonio, Zambales for more
than nine consecutive years. Instead he raised arguments to forestall or dismiss the petition on the grounds
other than the main issue itself. We find such arguments as wanting. Respondent Lonzanida, for holding the
office of mayor for more than three consecutive terms, went against the three-term limit rule; therefore, he
could not be allowed to run anew in the 2010 elections. It is time to infuse new blood in the political arena
of San Antonio.
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The Certificate of
Candidacy of Respondent Romeo D. Lonzanida for the position of mayor in the municipality of San
Antonio, Zambales is hereby CANCELLED. His name is hereby ordered STRICKEN OFF the list of
Official Candidates for the position of Mayor of San Antonio, Zambales in May 10, 2010 elections.
SO ORDERED.8
Lonzanida’s motion for reconsideration before the COMELEC En Banc remained pending during the May
2010 elections. Lonzanida and Efren Racel Aratea (Aratea) garnered the highest number of votes and were
respectively proclaimed Mayor and Vice-Mayor.
Aratea took his oath of office as Acting Mayor before Regional Trial Court (RTC) Judge Raymond C. Viray
of Branch 75, Olongapo City on 5 July 2010. 9 On the same date, Aratea wrote the Department of Interior
and Local Government (DILG) and requested for an opinion on whether, as Vice-Mayor, he was legally
required to assume the Office of the Mayor in view of Lonzanida’s disqualification. DILG Legal Opinion
No. 117, S. 201010 stated that Lonzanida was disqualified to hold office by reason of his criminal conviction.
As a consequence of Lonzanida’s disqualification, the Office of the Mayor was deemed permanently vacant.
Thus, Aratea should assume the Office of the Mayor in an acting capacity without prejudice to the
COMELEC’s resolution of Lonzanida’s motion for reconsideration. In another letter dated 6 August 2010,
Aratea requested the DILG to allow him to take the oath of office as Mayor of San Antonio, Zambales. In
368
his response dated 24 August 2010, then Secretary Jesse M. Robredo allowed Aratea to take an oath of
office as "the permanent Municipal Mayor of San Antonio, Zambales without prejudice however to the
outcome of the cases pending before the [COMELEC]."11
On 11 August 2010, the COMELEC En Banc issued a Resolution12 disqualifying Lonzanida from running
for Mayor in the May 2010 elections. The COMELEC En Banc’s resolution was based on two
grounds: first, Lonzanida had been elected and had served as Mayor for more than three consecutive terms
without interruption; and second, Lonzanida had been convicted by final judgment of ten (10) counts of
falsification under the Revised Penal Code. Lonzanida was sentenced for each count of falsification to
imprisonment of four (4) years and one (1) day of prisión correccional as minimum, to eight (8) years and
one (1) day of prisión mayor as maximum. The judgment of conviction became final on 23 October 2009 in
the Decision of this Court in Lonzanida v. People,13 before Lonzanida filed his certificate of candidacy on 1
December 2009. Pertinent portions of the 11 August 2010 Resolution read:
Prescinding from the foregoing premises, Lonzanida, for having served as Mayor of San Antonio, Zambales
for more than three (3) consecutive terms and for having been convicted by a final judgment of a crime
punishable by more than one (1) year of imprisonment, is clearly disqualified to run for the same position in
the May 2010 Elections.
WHEREFORE, in view of the foregoing, the Motion for Reconsideration is hereby DENIED.
SO ORDERED.14
On 25 August 2010, Antipolo filed a Motion for Leave to Intervene and to Admit Attached Petition-in-
Intervention.15She claimed her right to be proclaimed as Mayor of San Antonio, Zambales because
Lonzanida ceased to be a candidate when the COMELEC Second Division, through its 18 February 2010
Resolution, ordered the cancellation of his certificate of candidacy and the striking out of his name from the
list of official candidates for the position of Mayor of San Antonio, Zambales in the May 2010 elections.
In his Comment filed on 26 January 2011, Aratea asserted that Antipolo, as the candidate who received the
second highest number of votes, could not be proclaimed as the winning candidate. Since Lonzanida’s
disqualification was not yet final during election day, the votes cast in his favor could not be declared stray.
Lonzanida’s subsequent disqualification resulted in a permanent vacancy in the Office of Mayor, and
Aratea, as the duly-elected Vice-Mayor, was mandated by Section 4416 of the Local Government Code to
succeed as Mayor.
The COMELEC’s Rulings
The COMELEC En Banc issued an Order dated 12 January 2011, stating:
Acting on the "Motion for Leave to Intervene and to Admit Attached Petition-in-Intervention" filed by
Estela D. Antipolo (Antipolo) and pursuant to the power of this Commission to suspend its Rules or any
portion thereof in the interest of justice, this Commission hereby RESOLVES to:
1. GRANT the aforesaid Motion;
2. ADMIT the Petition-in-Intervention filed by Antipolo;
3. REQUIRE the Respondent, ROMEO DUMLAO LONZANIDA, as well as EFREN RACEL ARATEA,
proclaimed Vice-Mayor of San Antonio, Zambales, to file their respective Comments on the Petition-in-
Intervention within a non-extendible period of five (5) days from receipt thereof;
4. SET the above-mentioned Petition-in-Intervention for hearing on January 26, 2011 at 10:00 a.m.
COMELEC Session Hall, 8th Floor, Palacio del Gobernador, Intramuros, Manila.
WHEREFORE, furnish copies hereof the parties for their information and compliance.
SO ORDERED.17
In its Resolution dated 2 February 2011, the COMELEC En Banc no longer considered Lonzanida’s
qualification as an issue: "It is beyond cavil that Lonzanida is not eligible to hold and discharge the
functions of the Office of the Mayor of San Antonio, Zambales. The sole issue to be resolved at this juncture
is how to fill the vacancy resulting from Lonzanida’s disqualification." 18 The Resolution further stated:
We cannot sustain the submission of Oppositor Aratea that Intervenor Antipolo could never be proclaimed
as the duly elected Mayor of Antipolo [sic] for being a second placer in the elections. The teachings in the
cases of Codilla vs. De Venecia and Nazareno and Domino vs. COMELEC, et al., while they remain sound
jurisprudence find no application in the case at bar. What sets this case apart from the cited jurisprudence is
that the notoriety of Lonzanida’s disqualification and ineligibility to hold public office is established both in
fact and in law on election day itself. Hence, Lonzanida’s name, as already ordered by the Commission on
February 18, 2010 should have been stricken off from the list of official candidates for Mayor of San
Antonio, Zambales.
WHEREFORE, in view of the foregoing, the Commission hereby:
1. Declares NULL and VOID the proclamation of respondent ROMEO D. LONZANIDA;
2. GRANTS the Petition for Intervention of Estela D. Antipolo;
3. Orders the immediate CONSTITUTION of a Special Municipal Board of Canvassers to PROCLAIM
Intervenor Estela D. Antipolo as the duly elected Mayor of San Antonio, Zambales;
4. Orders Vice-Mayor Efren Racel Aratea to cease and desist from discharging the functions of the Office of
the Mayor, and to cause a peaceful turn-over of the said office to Antipolo upon her proclamation; and
5. Orders the Office of the Executive Director as well as the Regional Election Director of Region III to
cause the implementation of this Resolution and disseminate it to the Department of Interior and Local
Government.
SO ORDERED.19
Aratea filed the present petition on 9 February 2011.
The Issues
The manner of filling up the permanent vacancy in the Office of the Mayor of San Antonio, Zambales is
dependent upon the determination of Lonzanida’s removal. Whether Lonzanida was disqualified under
Section 68 of the Omnibus Election Code, or made a false material representation under Section 78 of the
same Code that resulted in his certificate of candidacy being void ab initio, is determinative of whether
Aratea or Antipolo is the rightful occupant to the Office of the Mayor of San Antonio, Zambales.
The dissenting opinions reverse the COMELEC’s 2 February 2011 Resolution and 12 January 2011 Order.
They hold that Aratea, the duly elected Vice-Mayor of San Antonio, Zambales, should be declared Mayor
pursuant to the Local Government Code’s rule on succession.
The dissenting opinions make three grave errors: first, they ignore prevailing jurisprudence that a false
representation in the certificate of candidacy as to eligibility in the number of terms elected and served is a
material fact that is a ground for a petition to cancel a certificate of candidacy under Section 78; second,
they ignore that a false representation as to eligibility to run for public office due to the fact that the
candidate suffers from perpetual special disqualification is a material fact that is a ground for a petition to
cancel a certificate of candidacy under Section 78; and third, they resort to a strained statutory construction
to conclude that the violation of the three-term limit rule cannot be a ground for cancellation of a certificate
of candidacy under Section 78, even when it is clear and plain that violation of the three-term limit rule is an
ineligibility affecting the qualification of a candidate to elective office.
The dissenting opinions tread on dangerous ground when they assert that a candidate’s eligibility to the
office he seeks election must be strictly construed to refer only to the details, i.e., age, citizenship, or
residency, among others, which the law requires him to state in his COC, and which he must swear under
oath to possess. The dissenting opinions choose to view a false certification of a candidate’s eligibility on
the three-term limit rule not as a ground for false material representation under Section 78 but as a ground
for disqualification under Section 68 of the same Code. This is clearly contrary to well-established
jurisprudence.
The Court’s Ruling
We hold that Antipolo, the alleged "second placer," should be proclaimed Mayor because Lonzanida’s
certificate of candidacy was void ab initio. In short, Lonzanida was never a candidate at all. All votes for
Lonzanida were stray votes. Thus, Antipolo, the only qualified candidate, actually garnered the highest
number of votes for the position of Mayor.
Qualifications and Disqualifications
369
Section 65 of the Omnibus Election Code points to the Local Government Code for the qualifications of
elective local officials. Paragraphs (a) and (c) of Section 39 and Section 40 of the Local Government Code
provide in pertinent part:
Sec. 39. Qualifications. ‒ (a) An elective local official must be a citizen of the Philippines; a registered voter
in the barangay, municipality, city or province x x x; a resident therein for at least one (1) year immediately
preceding the day of the election; and able to read and write Filipino or any other local language or dialect.
xxxx
(c) Candidates for the position of mayor or vice-mayor of independent component cities, component cities,
or municipalities must be at least twenty-one (21) years of age on election day.
xxxx
Sec. 40. Disqualifications. - The following persons are disqualified from running for any elective local
position:
(a) Those sentenced by final judgment for an offense involving moral turpitude or for an offense punishable
by one (1) year or more of imprisonment, within two (2) years after serving sentence;
(b) Those removed from office as a result of an administrative case;
(c) Those convicted by final judgment for violating the oath of allegiance to the Republic;
(d) Those with dual citizenship;
(e) Fugitives from justice in criminal or non-political cases here or abroad;
(f) Permanent residents in a foreign country or those who have acquired the right to reside abroad and
continue to avail of the same right after the effectivity of this Code; and
(g) The insane or feeble-minded. (Emphasis supplied)
Section 12 of the Omnibus Election Code provides:
Sec. 12. Disqualification. — Any person who has been declared by competent authority insane or
incompetent, or has been sentenced by final judgment for subversion, insurrection, rebellion or for any
offense for which he was sentenced to a penalty of more than eighteen months or for a crime involving
moral turpitude, shall be disqualified to be a candidate and to hold any office, unless he has been given
plenary pardon or granted amnesty.
The disqualifications to be a candidate herein provided shall be deemed removed upon the declaration by
competent authority that said insanity or incompetence had been removed or after the expiration of a period
of five years from his service of sentence, unless within the same period he again becomes disqualified.
(Emphasis supplied)
The grounds for disqualification for a petition under Section 68 of the Omnibus Election Code are
specifically enumerated:
Sec. 68. Disqualifications. ‒ Any candidate who, in an action or protest in which he is a party is declared by
final decision by a competent court guilty of, or found by the Commission of having (a) given money or
other material consideration to influence, induce or corrupt the voters or public officials performing electoral
functions; (b) committed acts of terrorism to enhance his candidacy; (c) spent in his election campaign an
amount in excess of that allowed by this Code; (d) solicited, received or made any contribution prohibited
under Sections 89, 95, 96, 97 and 104; (e) violated any of Sections 80, 83, 85, 86 and 261, paragraphs d, e,
k, v, and cc, subparagraph 6, shall be disqualified from continuing as a candidate, or if he has been elected,
from holding the office. Any person who is a permanent resident of or an immigrant to a foreign country
shall not be qualified to run for any elective office under this Code, unless said person has waived his status
as permanent resident or immigrant of a foreign country in accordance with the residence requirement
provided for in the election laws. (Emphasis supplied)
A petition for disqualification under Section 68 clearly refers to "the commission of prohibited acts and
possession of a permanent resident status in a foreign country."20 All the offenses mentioned in Section 68
refer to election offenses under the Omnibus Election Code, not to violations of other penal laws. There is
absolutely nothing in the language of Section 68 that would justify including violation of the three-term
limit rule, or conviction by final judgment of the crime of falsification under the Revised Penal Code, as one
of the grounds or offenses covered under Section 68. In Codilla, Sr. v. de Venecia,21 this Court ruled:
[T]he jurisdiction of the COMELEC to disqualify candidates is limited to those enumerated in Section 68 of
the Omnibus Election Code. All other election offenses are beyond the ambit of COMELEC jurisdiction.
They are criminal and not administrative in nature. x x x
Clearly, the violation by Lonzanida of the three-term limit rule, or his conviction by final judgment of the
crime of falsification under the Revised Penal Code, does not constitute a ground for a petition under
Section 68.
False Material Representation
Section 78 of the Omnibus Election Code states that a certificate of candidacy may be denied or cancelled
when there is false material representation of the contents of the certificate of candidacy:
Sec. 78. Petition to deny due course to or cancel a certificate of candidacy. ‒ A verified petition seeking to
deny due course or to cancel a certificate of candidacy may be filed by the person exclusively on the ground
that any material representation contained therein as required under Section 74 hereof is false. The petition
may be filed at any time not later than twenty-five days from the time of the filing of the certificate of
candidacy and shall be decided, after due notice and hearing, not later than fifteen days before the election.
(Emphasis supplied)
Section 74 of the Omnibus Election Code details the contents of the certificate of candidacy:
Sec. 74. Contents of certificate of candidacy. ‒ The certificate of candidacy shall state that the person filing
it is announcing his candidacy for the office stated therein and that he is eligible for said office; if for
Member of the Batasang Pambansa, the province, including its component cities, highly urbanized city or
district or sector which he seeks to represent; the political party to which he belongs; civil status; his date of
birth; residence; his post office address for all election purposes; his profession or occupation; that he will
support and defend the Constitution of the Philippines and will maintain true faith and allegiance thereto;
that he will obey the laws, legal orders, and decrees promulgated by the duly constituted authorities; that he
is not a permanent resident or immigrant to a foreign country; that the obligation imposed by his oath is
assumed voluntarily, without mental reservation or purpose of evasion; and that the facts stated in the
certificate of candidacy are true to the best of his knowledge.
x x x x (Emphasis supplied)
A candidate for mayor in the 2010 local elections was thus required to provide 12 items of information in
the certificate of candidacy:22 name; nickname or stage name; gender; age; place of birth; political party that
nominated the candidate; civil status; residence/address; profession or occupation; post office address for
election purposes; locality of which the candidate is a registered voter; and period of residence in the
Philippines before 10 May 2010. The candidate also certifies four statements: a statement that the candidate
is a natural born or naturalized Filipino citizen; a statement that the candidate is not a permanent resident of,
or immigrant to, a foreign country; a statement that the candidate is eligible for the office he seeks election;
and a statement of the candidate’s allegiance to the Constitution of the Republic of the Philippines.23 The
certificate of candidacy should also be under oath, and filed within the period prescribed by law.
The conviction of Lonzanida by final judgment, with the penalty of prisión mayor, disqualifies him
perpetually from holding any public office, or from being elected to any public office. This perpetual
disqualification took effect upon the finality of the judgment of conviction, before Lonzanida filed his
certificate of candidacy. The pertinent provisions of the Revised Penal Code are as follows:
Art. 27. Reclusion perpetua. — x x x
Prisión mayor and temporary disqualification. — The duration of the penalties of prisión mayor and
temporary disqualification shall be from six years and one day to twelve years, except when the penalty of
disqualification is imposed as an accessory penalty, in which case, it shall be that of the principal penalty.
xxxx
Art. 30. Effects of the penalties of perpetual or temporary absolute disqualification. — The penalties
of perpetual or temporary absolute disqualification for public office shall produce the following effects:
370
1. The deprivation of the public offices and employments which the offender may have held, even if
conferred by popular election.
2. The deprivation of the right to vote in any election for any popular elective office or to be elected to such
office.
3. The disqualification for the offices or public employments and for the exercise of any of the rights
mentioned.
In case of temporary disqualification, such disqualification as is comprised in paragraphs 2 and 3 of this
article shall last during the term of the sentence.
4. The loss of all rights to retirement pay or other pension for any office formerly held.
Art. 31. Effects of the penalties of perpetual or temporary special disqualification. — The penalties
of perpetual or temporary special disqualification for public office, profession or calling shall produce the
following effects:
1. The deprivation of the office, employment, profession or calling affected.
2. The disqualification for holding similar offices or employments either perpetually or during the term of
the sentence, according to the extent of such disqualification.
Art. 32. Effects of the penalties of perpetual or temporary special disqualification for the exercise of the
right of suffrage. — The perpetual or temporary special disqualification for the exercise of the right of
suffrage shall deprive the offender perpetually or during the term of the sentence, according to the nature of
said penalty, of the right to vote in any popular election for any public office or to be elected to such
office. Moreover, the offender shall not be permitted to hold any public office during the period of his
disqualification.
Art. 42. Prisión mayor — Its accessory penalties. — The penalty of prision mayor shall carry with it that
of temporary absolute disqualification and that of perpetual special disqualification from the right of
suffrage which the offender shall suffer although pardoned as to the principal penalty, unless the same shall
have been expressly remitted in the pardon. (Emphasis supplied)
The penalty of prisión mayor automatically carries with it, by operation of law,24 the accessory penalties of
temporary absolute disqualification and perpetual special disqualification. Under Article 30 of the Revised
Penal Code, temporary absolute disqualification produces the effect of "deprivation of the right to vote in
any election for any popular elective office or to be elected to such office.” The duration of temporary
absolute disqualification is the same as that of the principal penalty of prisión mayor. On the other hand,
under Article 32 of the Revised Penal Code, perpetual special disqualification means that "the offender shall
not be permitted to hold any public office during the period of his disqualification,” which is
perpetually. Both temporary absolute disqualification and perpetual special disqualification constitute
ineligibilities to hold elective public office. A person suffering from these ineligibilities is ineligible to run
for elective public office, and commits a false material representation if he states in his certificate of
candidacy that he is eligible to so run.
In Lacuna v. Abes (Lacuna),25 the Court, speaking through Justice J.B.L. Reyes, explained the import of the
accessory penalty of perpetual special disqualification:
On the first defense of respondent-appellee Abes, it must be remembered that appellee’s conviction of a
crime penalized with prision mayor which carried the accessory penalties of temporary absolute
disqualification and perpetual special disqualification from the right of suffrage (Article 42, Revised Penal
Code); and Section 99 of the Revised Election Code disqualifies a person from voting if he had been
sentenced by final judgment to suffer one year or more of imprisonment.
The accessory penalty of temporary absolute disqualification disqualifies the convict for public office and
for the right to vote, such disqualification to last only during the term of the sentence (Article 27, paragraph
3, & Article 30, Revised Penal Code) that, in the case of Abes, would have expired on 13 October 1961.
But this does not hold true with respect to the other accessory penalty of perpetual special disqualification
for the exercise of the right of suffrage. This accessory penalty deprives the convict of the right to vote or to
be elected to or hold public office perpetually, as distinguished from temporary special disqualification,
which lasts during the term of the sentence. Article 32, Revised Penal Code, provides:
Art. 32. Effects of the penalties of perpetual or temporary special disqualification for the exercise of the
right of suffrage. — The perpetual or temporary special disqualification for the exercise of the right of
suffrage shall deprive the offender perpetually or during the term of the sentence, according to the nature of
said penalty, of the right to vote in any popular election for any public office or to be elected to such office.
Moreover, the offender shall not be permitted to hold any public office during the period of disqualification.
The word "perpetually" and the phrase "during the term of the sentence" should be applied distributively to
their respective antecedents; thus, the word "perpetually" refers to the perpetual kind of special
disqualification, while the phrase "during the term of the sentence" refers to the temporary special
disqualification. The duration between the perpetual and the temporary (both special) are necessarily
different because the provision, instead of merging their durations into one period, states that such duration
is "according to the nature of said penalty" — which means according to whether the penalty is the perpetual
or the temporary special disqualification. (Emphasis supplied)
Clearly, Lacuna instructs that the accessory penalty of perpetual special disqualification "deprives the
convict of the right to vote or to be elected to or hold public office perpetually.”
The accessory penalty of perpetual special disqualification takes effect immediately once the judgment of
conviction becomes final. The effectivity of this accessory penalty does not depend on the duration of the
principal penalty, or on whether the convict serves his jail sentence or not. The last sentence of Article 32
states that "the offender shall not be permitted to hold any public office during the period of his [perpetual
special] disqualification." Once the judgment of conviction becomes final, it is immediately executory. Any
public office that the convict may be holding at the time of his conviction becomes vacant upon finality of
the judgment, and the convict becomes ineligible to run for any elective public office perpetually. In the
case of Lonzanida, he became ineligible perpetually to hold, or to run for, any elective public office from the
time the judgment of conviction against him became final. The judgment of conviction was promulgated on
20 July 2009 and became final on 23 October 2009, before Lonzanida filed his certificate of candidacy on 1
December 2009 . 26
Perpetual special disqualification is a ground for a petition under Section 78 of the Omnibus Election Code
because this accessory penalty is an ineligibility, which means that the convict is not eligible to run for
public office, contrary to the statement that Section 74 requires him to state under oath in his certificate of
candidacy. As this Court held in Fermin v. Commission on Elections,27 the false material representation may
refer to "qualifications or eligibility.” One who suffers from perpetual special disqualification is ineligible to
run for public office. If a person suffering from perpetual special disqualification files a certificate of
candidacy stating under oath that "he is eligible to run for (public) office," as expressly required under
Section 74, then he clearly makes a false material representation that is a ground for a petition under Section
78. As this Court explained in Fermin:
Lest it be misunderstood, the denial of due course to or the cancellation of the CoC is not based on the lack
of qualifications but on a finding that the candidate made a material representation that is false, which may
relate to the qualifications required of the public office he/she is running for. It is noted that the candidate
states in his/her CoC that he/she is eligible for the office he/she seeks. Section 78 of the OEC, therefore, is to
be read in relation to the constitutional and statutory provisions on qualifications or eligibility for public
office. If the candidate subsequently states a material representation in the CoC that is false, the COMELEC,
following the law, is empowered to deny due course to or cancel such certificate. Indeed, the Court has
already likened a proceeding under Section 78 to a quo warranto proceeding under Section 253 of the OEC
since they both deal with the eligibility or qualification of a candidate, with the distinction mainly in the fact
that a "Section 78" petition is filed before proclamation, while a petition for quo warranto is filed after
proclamation of the winning candidate.28(Emphasis supplied)
Latasa, Rivera and Ong:
The Three-Term Limit Rule as a Ground for Ineligibility
371
Section 74 requires the candidate to certify that he is eligible for the public office he seeks election. Thus,
Section 74 states that "the certificate of candidacy shall state that the person filing x x x is eligible for said
office.” The three-term limit rule, enacted to prevent the establishment of political dynasties and to enhance
the electorate’s freedom of choice,29 is found both in the Constitution30 and the law.31 After being elected and
serving for three consecutive terms, an elective local official cannot seek immediate reelection for the same
office in the next regular election32 because he is ineligible. One who has an ineligibility to run for elective
public office is not "eligible for [the] office." As used in Section 74, the word "eligible"33 means having the
right to run for elective public office, that is, having all the qualifications and none of the ineligibilities to
run for the public office.
In Latasa v. Commission on Elections,34 petitioner Arsenio Latasa was elected mayor of the Municipality of
Digos, Davao del Sur in 1992, 1995, and 1998. The Municipality of Digos was converted into the City of
Digos during Latasa’s third term. Latasa filed his certificate of candidacy for city mayor for the 2001
elections. Romeo Sunga, Latasa’s opponent, filed before the COMELEC a "petition to deny due course,
cancel certificate of candidacy and/or disqualification" under Section 78 on the ground that Latasa falsely
represented in his certificate of candidacy that he is eligible to run as mayor of Digos City. Latasa argued
that he did not make any false representation. In his certificate of candidacy, Latasa inserted a footnote after
the phrase "I am eligible" and indicated "*Having served three (3) term[s] as municipal mayor and now
running for the first time as city mayor." The COMELEC First Division cancelled Latasa’s certificate of
candidacy for violation of the three-term limit rule but not for false material representation. This Court
affirmed the COMELEC En Banc’s denial of Latasa’s motion for reconsideration.
We cancelled Marino Morales’ certificate of candidacy in Rivera III v. Commission on
Elections (Rivera).35 We held that Morales exceeded the maximum three-term limit, having been elected and
served as Mayor of Mabalacat for four consecutive terms (1995 to 1998, 1998 to 2001, 2001 to 2004, and
2004 to 2007). We declared him ineligible as a candidate for the same position for the 2007 to 2010 term.
Although we did not explicitly rule that Morales’ violation of the three-term limit rule constituted false
material representation, we nonetheless granted the petition to cancel Morales’ certificate of candidacy
under Section 78. We also affirmed the cancellation of Francis Ong’s certificate of candidacy in Ong v.
Alegre,36 where the "petition to disqualify, deny due course and cancel" Ong’s certificate of candidacy under
Section 78 was predicated on the violation of the three-term limit rule.
Loong, Fermin and Munder:
When Possession of a Disqualifying Condition
is Not a Ground for a Petition for Disqualification
It is obvious from a reading of the laws and jurisprudence that there is an overlap in the grounds for
eligibility and ineligibility vis-à-vis qualifications and disqualifications. For example, a candidate may
represent that he is a resident of a particular Philippine locality37 when he is actually a permanent resident of
another country.38 In cases of such overlap, the petitioner should not be constrained in his choice of remedy
when the Omnibus Election Code explicitly makes available multiple remedies. 39 Section 78 allows the
filing of a petition to deny due course or to cancel a certificate of candidacy before the election, while
Section 253 allows the filing of a petition for quo warranto after the election. Despite the overlap of the
grounds, one should not confuse a petition for disqualification using grounds enumerated in Section 68 with
a petition to deny due course or to cancel a certificate of candidacy under Section 78.
The distinction between a petition under Section 68 and a petition under Section 78 was discussed in Loong
v. Commission on Elections40 with respect to the applicable prescriptive period. Respondent Nur Hussein
Ututalum filed a petition under Section 78 to disqualify petitioner Benjamin Loong for the office of
Regional Vice-Governor of the Autonomous Government of Muslim Mindanao for false representation as to
his age. The petition was filed 16 days after the election, and clearly beyond the prescribed 25 day period
from the last day of filing certificates of candidacy. This Court ruled that Ututalum’s petition was one based
on false representation under Section 78, and not for disqualification under Section 68. Hence, the 25-day
prescriptive period provided in Section 78 should be strictly applied. We recognized the possible gap in the
law:
It is true that the discovery of false representation as to material facts required to be stated in a certificate of
candidacy, under Section 74 of the Code, may be made only after the lapse of the 25-day period prescribed
by Section 78 of the Code, through no fault of the person who discovers such misrepresentations and who
would want the disqualification of the candidate committing the misrepresentations. It would seem,
therefore, that there could indeed be a gap between the time of the discovery of the misrepresentation, (when
the discovery is made after the 25-day period under Sec. 78 of the Code has lapsed) and the time when the
proclamation of the results of the election is made. During this so-called "gap" the would-be petitioner (who
would seek the disqualification of the candidate) is left with nothing to do except to wait for the
proclamation of the results, so that he could avail of a remedy against the misrepresenting candidate, that is,
by filing a petition for quo warranto against him. Respondent Commission sees this "gap" in what it calls a
procedural gap which, according to it, is unnecessary and should be remedied.
At the same time, it can not be denied that it is the purpose and intent of the legislative branch of the
government to fix a definite time within which petitions of protests related to eligibility of candidates for
elective offices must be filed, as seen in Sections 78 and 253 of the Code. Respondent Commission may
have seen the need to remedy this so-called “procedural gap", but it is not for it to prescribe what the law
does not provide, its function not being legislative. The question of whether the time to file these petitions or
protests is too short or ineffective is one for the Legislature to decide and remedy.41
In Fermin v. Commission on Elections,42 the issue of a candidate’s possession of the required one-year
residency requirement was raised in a petition for disqualification under Section 68 instead of a petition to
deny due course or to cancel a certificate of candidacy under Section 78. Despite the question of the one-
year residency being a proper ground under Section 78, Dilangalen, the petitioner before the COMELEC
in Fermin, relied on Section 5(C)(1) and 5(C)(3)(a)(4) of COMELEC Resolution No. 7800 43 and filed the
petition under Section 68. In Fermin, we ruled that "a COMELEC rule or resolution cannot supplant or vary
legislative enactments that distinguish the grounds for disqualification from those of ineligibility, and the
appropriate proceedings to raise the said grounds."44 A petition for disqualification can only be premised on
a ground specified in Section 12 or 68 of the Omnibus Election Code or Section 40 of the Local Government
Code. Thus, a petition questioning a candidate’s possession of the required one-year residency requirement,
as distinguished from permanent residency or immigrant status in a foreign country, should be filed under
Section 78, and a petition under Section 68 is the wrong remedy.
In Munder v. Commission on Elections,45 petitioner Alfais Munder filed a certificate of candidacy for Mayor
of Bubong, Lanao del Sur on 26 November 2009. Respondent Atty. Tago Sarip filed a petition for Munder’s
disqualification on 13 April 2010. Sarip claimed that Munder misrepresented that he was a registered voter
of Bubong, Lanao del Sur, and that he was eligible to register as a voter in 2003 even though he was not yet
18 years of age at the time of the voter’s registration. Moreover, Munder’s certificate of candidacy was not
accomplished in full as he failed to indicate his precinct and did not affix his thumb-mark. The COMELEC
Second Division dismissed Sarip’s petition and declared that his grounds are not grounds for disqualification
under Section 68 but for denial or cancellation of Munder’s certificate of candidacy under Section 78.
Sarip’s petition was filed out of time as he had only 25 days after the filing of Munder’s certificate of
candidacy, or until 21 December 2009, within which to file his petition.
The COMELEC En Banc, however, disqualified Munder. In reversing the COMELEC Second Division, the
COMELEC En Banc did not rule on the propriety of Sarip’s remedy but focused on the question of whether
Munder was a registered voter of Bubong, Lanao del Sur. This Court reinstated the COMELEC Second
Division’s resolution. This Court ruled that the ground raised in the petition, lack of registration as voter in
the locality where he was running as a candidate, is inappropriate for a petition for disqualification. We
further declared that with our ruling in Fermin, we had already rejected the claim that lack of substantive
qualifications of a candidate is a ground for a petition for disqualification under Section 68. The only
372
substantive qualification the absence of which is a ground for a petition under Section 68 is the candidate’s
permanent residency or immigrant status in a foreign country.
The dissenting opinions place the violation of the three-term limit rule as a disqualification under Section 68
as the violation allegedly is "a status, circumstance or condition which bars him from running for public
office despite the possession of all the qualifications under Section 39 of the [Local Government Code]." In
so holding the dissenting opinions write in the law what is not found in the law. Section 68 is explicit as to
the proper grounds for disqualification under said Section. The grounds for filing a petition for
disqualification under Section 68 are specifically enumerated in said Section. However, contrary to the
specific enumeration in Section 68 and contrary to prevailing jurisprudence, the dissenting opinions add to
the enumerated grounds the violation of the three-term limit rule and falsification under the Revised Penal
Code, which are obviously not found in the enumeration in Section 68.
The dissenting opinions equate Lonzanida’s possession of a disqualifying condition (violation of the three-
term limit rule) with the grounds for disqualification under Section 68. Section 68 is explicit as to the proper
grounds for disqualification: the commission of specific prohibited acts under the Omnibus Election Code
and possession of a permanent residency or immigrant status in a foreign country. Any other false
representation regarding a material fact should be filed under Section 78, specifically under the candidate’s
certification of his eligibility. In rejecting a violation of the three-term limit as a condition for eligibility, the
dissenting opinions resort to judicial legislation, ignoring the verba legis doctrine and well-established
jurisprudence on this very issue.
In a certificate of candidacy, the candidate is asked to certify under oath his eligibility, and thus
qualification, to the office he seeks election. Even though the certificate of candidacy does not specifically
ask the candidate for the number of terms elected and served in an elective position, such fact is material in
determining a candidate’s eligibility, and thus qualification for the office. Election to and service of the
same local elective position for three consecutive terms renders a candidate ineligible from running for the
same position in the succeeding elections. Lonzanida misrepresented his eligibility because he knew full
well that he had been elected, and had served, as mayor of San Antonio, Zambales for more than three
consecutive terms yet he still certified that he was eligible to run for mayor for the next succeeding term.
Thus, Lonzanida’s representation that he was eligible for the office that he sought election constitutes false
material representation as to his qualification or eligibility for the office.
Legal Duty of COMELEC
to Enforce Perpetual Special Disqualification
Even without a petition under Section 78 of the Omnibus Election Code, the COMELEC is under a legal
duty to cancel the certificate of candidacy of anyone suffering from perpetual special disqualification to run
for public office by virtue of a final judgment of conviction. The final judgment of conviction is judicial
notice to the COMELEC of the disqualification of the convict from running for public office. The law itself
bars the convict from running for public office, and the disqualification is part of the final judgment of
conviction. The final judgment of the court is addressed not only to the Executive branch, but also to other
government agencies tasked to implement the final judgment under the law.
Whether or not the COMELEC is expressly mentioned in the judgment to implement the disqualification, it
is assumed that the portion of the final judgment on disqualification to run for elective public office is
addressed to the COMELEC because under the Constitution the COMELEC is duty bound to "enforce and
administer all laws and regulations relative to the conduct of an election."46 The disqualification of a convict
to run for elective public office under the Revised Penal Code, as affirmed by final judgment of a competent
court, is part of the enforcement and administration of "all the laws" relating to the conduct of elections.
Effect of a Void Certificate of Candidacy
A cancelled certificate of candidacy void ab initio cannot give rise to a valid candidacy, and much less to
valid votes.47 We quote from the COMELEC’s 2 February 2011 Resolution with approval:
As early as February 18, 2010, the Commission speaking through the Second Division had already ordered
the cancellation of Lonzanida’s certificate of candidacy, and had stricken off his name in the list of official
candidates for the mayoralty post of San Antonio, Zambales. Thereafter, the Commission En Banc in its
resolution dated August 11, 2010 unanimously affirmed the resolution disqualifying Lonzanida. Our
findings were likewise sustained by the Supreme Court no less. The disqualification of Lonzanida is not
simply anchored on one ground. On the contrary, it was emphasized in our En Banc resolution that
Lonzanida’s disqualification is two-pronged: first, he violated the constitutional fiat on the three-term limit;
and second, as early as December 1, 2009, he is known to have been convicted by final judgment for ten
(10) counts of Falsification under Article 171 of the Revised Penal Code. In other words, on election day,
respondent Lonzanida’s disqualification is notoriously known in fact and in law. Ergo, since respondent
Lonzanida was never a candidate for the position of Mayor [of] San Antonio, Zambales, the votes cast for
him should be considered stray votes. Consequently, Intervenor Antipolo, who remains as the sole qualified
candidate for the mayoralty post and obtained the highest number of votes, should now be proclaimed as the
duly elected Mayor of San Antonio, Zambales.48 (Boldfacing and underscoring in the original; italicization
supplied)
Lonzanida's certificate of candidacy was cancelled because he was ineligible or not qualified to run for
Mayor.1âwphi1Whether his certificate of candidacy is cancelled before or after the elections is immaterial
because the cancellation on such ground means he was never a candidate from the very beginning, his
certificate of candidacy being void ab initio. There was only one qualified candidate for Mayor in the May
201 0 elections - Anti polo, who therefore received the highest number of votes.
WHEREFORE, the petition is DISMISSED. The Resolution dated 2 February 2011 and the Order dated 12
January 2011 of the COMELEC En Bane in SPA No. 09-158 (DC) are AFFIRMED. The COMELEC En
Bane is DIRECTED to constitute a Special Municipal Board of Canvassers to proclaim Estela D. Antipolo
as the duly elected Mayor of San Antonio, Zambales. Petitioner Efren Racel Aratea is ORDERED to cease
and desist from discharging the functions of the Office of the Mayor of San Antonio, Zambales.
SO ORDERED.

373
 EN BANC
G.R. No. 194994 April 16, 2013
EMMANUEL A. DE CASTRO, Petitioner,
vs.
EMERSON S. CARLOS, Respondent.
DECISION
SERENO, CJ.:
Before us is a Petition for the issuance of a writ of quo warranto under Rule 66 filed by Emmanuel A. de
Castro (petitioner) seeking to oust respondent Emerson S. Carlos (respondent) from the position of assistant
general manager for operations (AGMO) of the Metropolitan Manila Development Authority (MMDA).
On 29 July 2009, then President Gloria Macapagal Arroyo appointed petitioner as AGM0. 1 His appointment
was concurred in by the members of the Metro Manila Council in MMDA Resolution No. 09-10, Series of
2009.2 He took his oath on 17 August 2009 before then Chairperson Bayani F. Fernando. 3
Meanwhile, on 29 July 2010, Executive Secretary Paquito Ochoa issued Office of the President (OP)
Memorandum Circular No. 2, Series of 2010, amending OP Memorandum Circular No. 1, Series of 2010.
OP Memorandum Circular No. 2 states:
2. All non-Career Executive Service Officials (non-CESO) occupying Career Executive Service (CES)
positions in all agencies of the executive branch shall remain in office and continue to perform their duties
and discharge their responsibility until October 31, 2010 or until their resignations have been accepted
and/or until their respective replacements have been appointed or designated, whichever comes first, unless
they are reappointed in the meantime.4
On 30 July 2010, Atty. Francis N. Tolentino, chairperson of the MMDA, issued Office Order No.
106,5 designating Corazon B. Cruz as officer-in-charge (OIC) of the Office of the AGMO. Petitioner was
then reassigned to the Legal and Legislative Affairs Office, Office of the General Manager. The service
vehicle and the office space previously assigned to him were withdrawn and assigned to other employees.
Subsequently, on 2 November 2010, Chairperson Tolentino designated respondent as OIC of the Office of
the AGMO by virtue of Memorandum Order No. 24,6 which in turn cited OP Memorandum Circular No. 2
as basis. Thereafter, the name of petitioner was stricken off the MMDA payroll, and he was no longer paid
his salary beginning November 2010.
Petitioner sought a clarification7 from the Career Executive Service Board (CESB) as to the proper
classification of the position of AGMO. In her reply,8 Executive Director Maria Anthonette Allones
(Executive Director Allones), CESO I, stated that the position of AGMO had not yet been classified and
could not be considered as belonging to the Career Executive Service (CES). She further stated that a
perusal of the appointment papers of petitioner showed that he was not holding a coterminous position. In
sum, she said, he was not covered by OP Memorandum Circular Nos. 1 and 2.
Petitioner was later offered the position of Director IV of MMDA Public Health and Safety Services and/or
MMDA consultant. He turned down the offer, claiming that it was a demotion in rank.
Demanding payment of his salary and reinstatement in the monthly payroll, 9 petitioner sent a letter on 5
December 2010 to Edenison Faisan, assistant general manager (AGM) for Finance and Administration; and
Lydia Domingo, Director III, Administrative Services. For his failure to obtain an action or a response from
MMDA, he then made a formal demand for his reinstatement as AGMO through a letter addressed to the
Office of the President on 17 December 2010.10
However, on 4 January 2011, President Benigno S. Aquino III (President Aquino) appointed respondent as
the new AGMO of the MMDA.11 On 10 January 2011, the latter took his oath of office.
Hence, the instant Petition.
The Office of the Solicitor General (OSG), representing respondent, filed its Comment on 19 August
2011.12However, upon motion of petitioner, it was disqualified from representing respondent. Thus, a
private law firm13entered an appearance as counsel for respondent and adopted the Comment filed by the
OSG.14
374
Petitioner filed his Reply on 17 November 2011.
ISSUES
Petitioner raises the following issues15 for the consideration of this Court:
(1) Whether respondent Emerson S. Carlos was validly appointed by President Aquino to the position of
AGMO of the MMDA;
(2) Whether petitioner Emmanuel A. de Castro is entitled to the position of AGMO; and
(3) Whether or not respondent should pay petitioner the salaries and financial benefits he received during his
illegal tenure as AGMO of the MMDA.
THE COURT’S RULING
Petitioner contends that Section 2(3), Article IX(B) of the 1987 Constitution guarantees the security of
tenure of employees in the civil service. He further argues that his appointment as AGMO is not covered by
OP Memorandum Circular No. 2, since it is not a CES position as determined by the CESB.
On the other hand, respondent posits that the AGMO position belongs to the CES; thus, in order to have
security of tenure, petitioner, must be a Career Executive Service official (CESO). Respondent maintains
that the function of an AGM is executive and managerial in nature. Thus, considering that petitioner is a
non-CESO occupying a CES position, he is covered by OP Memorandum Circular Nos. 1 and 2. Respondent
likewise raises the issue of procedural infirmity in the direct recourse to the Supreme Court by petitioner,
who thereby failed to adhere to the doctrine of hierarchy of courts.
Hierarchy of Courts
As to the procedural issue, petitioner submits that a direct recourse to this Court is warranted by the urgent
demands of public interest, particularly the veritable need for stability in the civil service and the protection
of the rights of civil servants. Moreover, considering that no other than the President of the Philippines is the
appointing authority, petitioner doubts if a trial court judge or an appellate court justice, with a prospect of
promotion in the judiciary would be willing to go against a presidential appointment.
Although Section 5(1) of Article VIII of the 1987 Constitution explicitly provides that the Supreme Court
has original jurisdiction over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas
corpus, the jurisdiction of this Court is not exclusive but is concurrent with that of the Court of Appeals and
regional trial court and does not give petitioner unrestricted freedom of choice of court forum. 16 The
hierarchy of courts must be strictly observed.
Settled is the rule that "the Supreme Court is a court of last resort and must so remain if it is to satisfactorily
perform the functions assigned to it by the fundamental charter and immemorial tradition."17 A disregard of
the doctrine of hierarchy of courts warrants, as a rule, the outright dismissal of a petition. 18
A direct invocation of this Court’s jurisdiction is allowed only when there are special and important reasons
that are clearly and specifically set forth in a petition.19 The rationale behind this policy arises from the
necessity of preventing (1) inordinate demands upon the time and attention of the Court, which is better
devoted to those matters within its exclusive jurisdiction; and (2) further overcrowding of the Court’s
docket.20
In this case, petitioner justified his act of directly filing with this Court only when he filed his Reply and
after respondent had already raised the procedural infirmity that may cause the outright dismissal of the
present Petition. Petitioner likewise cites stability in the civil service and protection of the rights of civil
servants as rationale for disregarding the hierarchy of courts.
Petitioner’s excuses are not special and important circumstances that would allow a direct recourse to this
Court. More so, mere speculation and doubt to the exercise of judicial discretion of the lower courts are not
and cannot be valid justifications to hurdle the hierarchy of courts. Thus, the Petition must be dismissed.
Nature of the AGMO Position
Even assuming that petitioner’s direct resort to this Court is permissible, the Petition must still be dismissed
for lack of merit.
"A petition for quo warranto is a proceeding to determine the right of a person to use or exercise a franchise
or an office and to oust the holder from the enjoyment, thereof, if the claim is not well-founded, or if his
right to enjoy the privilege has been forfeited."21 Where the action is filed by a private person, in his own
name, he must prove that he is entitled to the controverted position, otherwise, respondent has a right to the
undisturbed possession of the office.22
The controversy arose from the issuance of OP Memorandum Circular Nos. 1 and 2, which applies to all
non-CESO’s occupying CES positions in all agencies of the executive branch. Petitioner, being a non-
CESO, avers that he is not covered by these OP memoranda considering that the AGMO of the MMDA is a
non-CES position.
In order to settle the controversy, there is a need to determine the nature of the contentious position of
AGMO of the MMDA.
Career vs. non-career
Section 4 of Republic Act No. (R.A.) 7924,23 otherwise known as the MMDA Charter, specifically created
the position of AGMO. It reads as follows:
Sec. 4 Metro Manila Council. x x x.
xxxx
The Council shall be headed by a Chairman, who shall be appointed by the President and who shall continue
to hold office at the discretion of the appointing authority. He shall be vested with the rank, rights,
privileges, disqualifications, and prohibitions of a Cabinet member.
The Chairman shall be assisted by a General Manager, an Assistant General Manager for Finance and
Administration, an Assistant General Manager for Planning and an Assistant General Manager for
Operations, all of whom shall be appointed by the President with the consent and concurrence of the
majority of the Council, subject to civil service laws and regulations. They shall enjoy security of tenure and
may be removed for cause in accordance with law. (Emphasis supplied)
Executive Order No. (E.O.) 292, otherwise known as The Revised Administrative Code of 1987, provides
for two classifications of positions in the civil service: career and non-career.24
Career service is characterized by the existence of security of tenure,25 as contradistinguished from non-
career service whose tenure is coterminous with that of the appointing authority; or subject to the latter’s
pleasure; or limited to a period specified by law or to the duration of a particular project for which purpose
the appointment was made.26
Applying the foregoing distinction to the instant case, this Court finds that an AGMO holds a career
position, considering that the MMDA Charter specifically provides that AGMs enjoy security of tenure – the
core characteristic of a career service, as distinguished from a non-career service position.
CES vs. non-CES
Career service includes the following:
(1) Open Career positions for appointment to which prior qualification in an appropriate examination is
required;
(2) Closed Career positions which are scientific, or highly technical in nature; these include the faculty and
academic staff of state colleges and universities, and scientific and technical positions in scientific or
research institutions which shall establish and maintain their own merit systems;
(3) Positions in the Career Executive Service; namely, Undersecretary, Assistant Secretary, Bureau Director,
Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department Service and
other officers of equivalent rank as may be identified by the Career Executive Service Board, all of whom
are appointed by the President;
(4) Career officers, other than those in the Career Executive Service, who are appointed by the President,
such as the Foreign Service Officers in the Department of Foreign Affairs;
(5) Commissioned officers and enlisted men of the Armed Forces which shall maintain a separate merit
system;
(6) Personnel of government-owned or controlled corporations, whether performing governmental or
proprietary functions, who do not fall under the non-career service; and
(7) Permanent laborers, whether skilled, semi-skilled, or unskilled.27 (Emphasis supplied)
375
In Civil Service Commission v. Court of Appeals and PCSO,28 the Court clarified the positions covered by
the CES:
Thus, from the long line of cases cited above, in order for a position to be covered by the CES, two elements
must concur. First, the position must either be (1) a position enumerated under Book V, Title I, Subsection
A, Chapter 2, Section 7(3) of the Administrative Code of 1987, i.e., Undersecretary, Assistant Secretary,
Bureau Director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of
Department Service, or (2) a position of equal rank as those enumerated, and identified by the Career
Executive Service Board to be such position of equal rank. Second, the holder of the position must be a
presidential appointee. Failing in any of these requirements, a position cannot be considered as one covered
by the third-level or CES. (Emphasis supplied)
In sum, there are two elements required for a position to be considered as CES:
1) The position is among those enumerated under Book V, Title I, Subtitle A, Chapter 2, Section 7(3) of the
Administrative Code of 1987 OR a position of equal rank as those enumerated and identified by the CESB
to be such position of equal rank; AND
2) The holder of the position is a presidential appointee. Records show that in reply29 to Chairperson
Tolentino’s query on whether the positions of general manager and AGM of the MMDA are covered by the
CES,30 the CESB – thru Executive Director Allones – categorically stated that these positions are not among
those covered by the CES.
Upon petitioner’s separate inquiry on the matter,31 the CESB similarly responded that the AGMO’s position
could not be considered as belonging to the CES.32 Additionally, Executive Director Allones said that
petitioner was not covered by OP Memorandum Circular Nos. 1 and 2, to wit:
A cursory perusal of your appointment papers would show that it does not bear any indication that you are
holding a coterminous appointment. Neither your position as AGMO can be considered as created in excess
of the authorized staffing pattern since RA 7924, the law that created the MMDA clearly provided for such
position. As further stated above, your position will not fall under paragraph No. 2 of OP MC 1 because it is
not yet considered as belonging to the CES. Hence, we posit that you are not covered by OP MC 1 and 2. 33
However, contrary to Executive Director Allones’ statement, the CESB, through Resolution No. 799 already
declared certain positions meeting the criteria set therein as embraced within the CES.
It is worthy of note that CESB Resolution No. 799 was issued on 19 May 2009, even prior to petitioner’s
appointment on 29 July 2009. Moreover, as early as 31 May 1994, the above classification was already
embodied in CSC Resolution No. 34-2925, circularized in CSC Memorandum Circular 21, Series of 1994.
Resolution No. 799 classified the following positions as falling within the coverage of the CES:
a. The Career Executive Service includes the positions of Undersecretary, Assistant Secretary, Bureau
director, Assistant Bureau Director, regional Director (department-wide and bureau-wide), Assistant
Regional Director (department-wide and bureau-wide), and Chief of Department Service;
b. Unless provided otherwise, all other managerial or executive positions in the government, including
government-owned or controlled corporations with original charters are embraced within the CES provided
that they meet the following criteria:
i.) The position is a career position;
ii.) The position is above division chief level; and,
iii.) The duties and responsibilities of the position require performance of executive and managerial
functions.
Without a doubt, the AGMO position is not one of those enumerated in the above-cited paragraph(a) but it
clearly falls under paragraph(b) considering that it belongs to a government-owned and controlled
corporation with an original charter. The nature of AGMO is clear from the provisions of the MMDA
Charter.
First, we have already determined that an AGMO is a career position that enjoys security of tenure by virtue
of the MMDA Charter.
Second, it is undisputed that the position of AGMO is above the division chief level, which is equivalent to
the rank of assistant secretary with Salary Grade 29.34
Third, a perusal of the MMDA Charter readily reveals that the duties and responsibilities of the position
require the performance of executive and managerial functions.
Section 12.4, Rule IV of the Rules and Regulations Implementing R.A. 7924 provides the powers, functions,
duties and responsibilities of an AGMO, as follows:
12.4 Assistant General Manager for Operations
The Assistant General Manager for Operations shall perform the following functions:
a. Establish a mechanism for coordinating and operationalizing the delivery of metro-wide basic services;
b. Maintain a monitoring system for the effective evaluation of the implementation of approved policies,
plans and programs for the development of Metropolitan Manila;
c. Mobilize the participation of local government units, executive departments or agencies of the national
government, and the private sector in the delivery of metro-wide services; and
d. Operate a central radio communication system.
He shall perform such other duties as are incidental or related to the above functions or as may be assigned
from time to time.
An AGMO performs functions that are managerial in character; exercises management over people,
resource, and/or policy; and assumes functions like planning, organizing, directing, coordinating,
controlling, and overseeing the activities of MMDA. The position requires the application of managerial or
supervisory skills necessary to carry out duties and responsibilities involving functional guidance,
leadership, and supervision.
For the foregoing reasons, the position of AGMO is within the coverage of the CES.
In relation thereto, positions in the career service, for which appointments require examinations, are grouped
into three major levels:35
Sec. 8. Classes of positions in the Career Service. — (1) Classes of positions in the career service
appointment to which requires examinations shall be grouped into three major levels as follows:
(a) The first level shall include clerical, trades, crafts and custodial service positions which involve non-
professional or sub-professional work in a non-supervisory or supervisory capacity requiring less than four
years of collegiate studies;
(b) The second level shall include professional, technical, and scientific positions which involve
professional, technical or scientific work in a non-supervisory or supervisory capacity requiring at least four
years of college work up to Division Chief levels; and
(c) The third level shall cover positions in the Career Executive Service. (Emphasis supplied)
Entrance to different levels requires corresponding civil service eligibilities. 36 Those at the third level (CES
positions) require career service executive eligibility (CSEE) as a requirement for permanent appointment. 37
Evidently, an AGMO should possess all the qualifications required by third-level career service within the
CES. In this case, petitioner does not have the required eligibility. Therefore, we find that his appointment to
the position of AGMO was merely temporary.
Amores v. Civil Service Commission38 is instructive as to the nature of temporary appointments in the CES.
The Court held therein that an appointee cannot hold a position in a permanent capacity without the required
CES eligibility:
We begin with the precept, firmly established by law and jurisprudence that a permanent appointment in the
civil service is issued to a person who has met the requirements of the position to which the appointment is
made in accordance with law and the rules issued pursuant thereto. An appointment is permanent where the
appointee meets all the requirements for the position to which he is being appointed, including the
appropriate eligibility prescribed, and it is temporary where the appointee meets all the requirements for the
position except only the appropriate civil service eligibility.
xxxx
376
With particular reference to positions in the career executive service (CES), the requisite civil service
eligibility is acquired upon passing the CES examinations administered by the CES Board and the
subsequent conferment of such eligibility upon passing the examinations. Once a person acquires eligibility,
he either earns the status of a permanent appointee to the CES position to which he has previously been
appointed, or he becomes qualified for a permanent appointment to that position provided only that he also
possesses all the other qualifications for the position. Verily, it is clear that the possession of the required
CES eligibility is that which will make an appointment in the career executive service a permanent one.
Petitioner does not possess such eligibility, however, it cannot be said that his appointment to the position
was permanent.
Indeed, the law permits, on many occasions, the appointment of non-CES eligibles to CES positions in the
government in the absence of appropriate eligibles and when there is necessity in the interest of public
service to fill vacancies in the government. But in all such cases, the appointment is at best merely
temporary as it is said to be conditioned on the subsequent obtention of the required CES eligibility. This
rule, according to De Leon v. Court of Appeals, Dimayuga v. Benedicto, Caringal v. Philippine Charity
Sweepstakes Office, and Achacoso v. Macaraig, is invariable even though the given appointment may have
been designated as permanent by the appointing authority.
xxxx
Security of tenure in the career executive service, which presupposes a permanent appointment, takes place
upon passing the CES examinations administered by the CES Board x x x.
Petitioner undisputedly lacked CES eligibility. Thus, he did not hold the position of AGMO in a permanent
capacity or acquire security of tenure in that position. Otherwise stated, his appointment was temporary and
"co-terminus with the appointing authority."39 In Carillo v. CA,40 this Court ruled that "one who holds a
temporary appointment has no fixed tenure of office; his employment can be terminated at the pleasure of
the appointing power, there being no need to show that the termination is for cause." Therefore, we find no
violation of security of tenure when petitioner was replaced by respondent upon the latter’s appointment to
the position of AGMO by President Aquino.
Even granting for the sake of argument that the position of AGMO is yet to be classified by the CESB,
petitioner’s appointment is still deemed coterminous pursuant to CESB Resolution No. 945 issued on 14
June 2011, which reads:
WHEREAS, on November 23, 2010, the Supreme Court in the case of PCSO v. CSC, G.R. NO. 185766 and
G.R. No. 185767 limited the coverage of positions belonging to the CES to positions requiring Presidential
appointments.
WHEREAS, in the same vein, CES positions have now become synonymous to third level positions by
virtue of the said ruling.
WHEREFORE, foregoing premises considered, the Board RESOLVES, as it is hereby RESOLVED, to
issue the following guidelines to clarify the policy on the coverage of CES and its classification:
1. For career service positions requiring Presidential appointments expressly enumerated under Section 7(3),
Chapter 2, Subtitle A, Title 1, Book V of the Administrative Code of 1987 namely:
Undersecretary, Assistant Secretary, Bureau Director, Assistant Bureau Director, Regional Director,
Assistant Regional Director, and Chief of Department Service, no classification of position is necessary to
place them under the coverage of the CES, except if they belong to Project Offices, in which case a position
classification is required, in consultation with the Department of Budget and Management (DBM).
2. For positions requiring Presidential appointments other than those enumerated above, a classification of
positions is necessary which shall be conducted by the Board, upon request of the head of office of the
government department/agency concerned, to place them under the coverage of the CES provided they
comply with the following criteria:
i.) The position is a career position;
ii.) The position is above division chief level; and,
iii.)The duties and responsibilities of the position require the performance of executive and managerial
functions.
All appointments to positions which have not been previously classified as part of the CES would be
deemed co-terminus with the appointing authority. (Emphasis supplied)
Therefore, considering that petitioner is an appointee of then President Arroyo whose term ended on 30 June
2010, petitioner’s term of office was also deemed terminated upon the assumption of President Aquino.
Likewise, it is inconsequential that petitioner was allegedly replaced by another non-CESO eligible. In a quo
warranto proceeding, the person suing must show that he has a clear right to the office allegedly held
unlawfully by another. Absent a showing of that right, the lack of qualification or eligibility of the supposed
usurper is immaterial.41
All the foregoing considered, the petition merits an outright dismissal for disregarding the hierarchy of
courts and petitioner’s lack of cause of action against respondent for failure to sufficiently show that he has
undisturbed rights to the position of AGMO of the MMDA.
WHEREFORE, premises considered, the Petition is DENIED.
SO ORDERED.

377
 EN BANC
January 12, 2016
G.R. No. 211140
LORD ALLAN JAY Q. VELASCO, Petitioner,
vs.
HON. SPEAKER FELICIANO R. BELMONTE, JR., SECRETARY GENERAL MARILYN 1 B.
BARUA-YAP AND REGINA ONGSIAKO REYES, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
In the same manner that this Court is cautioned to be circumspect because one party is the son of a sitting
Justice of this Court, so too must we avoid abjuring what ought to be done as dictated by law and justice
solely for that reason.
Before this Court is a Petition for Mandamus filed under Rule 65 of the Rules of Court, as amended, by
Lord Allan Jay Q. Velasco (Velasco) against Hon. Feliciano R. Belmonte, Jr. (Speaker Belmonte,
Jr.), Speaker, House of Representatives, Hon. Marilyn B. Barua-Yap (Sec. Gen. Barua-Yap ), Secretary
General, House of Representatives, and Hon. Regina Ongsiako Reyes (Reyes), Representative, Lone
District of the Province of Marinduque .
Velasco principally alleges that he is the "legal and rightful winner during the May 13, 2013 elections in
accordance with final and executory resolutions of the Commission on Elections (COMELEC) and [this]
Honorable Court;"2 thus, he seeks the following reliefs:
a. that a WRIT OF MANDAMUS against the HON. SPEAKER FELICIANO BELMONTE, JR.
be issued ordering said respondent to administer the proper OATH in favor of petitioner Lord
Allan Jay Q. Velasco for the position of Representative for the Lone District of Marinduque; -and
allow petitioner to assume the position of representative for Marinduque and exercise the powers
and prerogatives of said position of Marinduque representative;
b. that a WRIT OF MANDAMUS against SECRETARY-GENERAL [MARILYN] BARUA-YAP
be issued ordering said respondent to REMOVE the name of Regina 0. Reyes in the Roll of
Members of the House of Representatives and to REGISTER the name of petitioner Lord Allan
Jay Q. Velasco, herein petitioner, in her stead; and
c. that a TEMPORARY RESTRAINING ORDER be issued to RESTRAIN, PREVENT and
PROHIBIT respondent REGINA ONGSIAKO REYES from usurping the position of Member of
the House of Representatives for the Lone District of Marinduque and from further exercising the
prerogatives of said position and performing the duties pertaining thereto, and DIRECTING her to
IMMEDIATELY VACATE said position.3
378
The pertinent facts leading to the filing of the present petition are:
On October 10, 2012, one Joseph Socorro Tan (Tan), a registered voter and resident of the Municipality of
Torrijos, Marinduque, filed with the Commission on Elections (COMELEC) a petition 4 to deny due course
or cancel the Certificate of Candidacy (COC) of Reyes as candidate for the position of Representative of the
Lone District of the Province of Marinduque. In his petition, Tan alleged that Reyes made several
material misrepresentations in her COC, i.e., "(i) that she is a resident of Brgy. Lupac, Boac,
Marinduque; (ii) that she is a natural-born Filipino citizen; (iii) that she is not a permanent resident of, or an
immigrant to, a foreign country; (iv) that her date of birth is July 3, 1964; (v) that her civil status is single;
and finally (vi) that she is eligible for the office she seeks to be elected to."5 The case was docketed as SPA
No. 13-053 (DC), entitled "Joseph Socorro B. Tan v. Atty. Regina Ongsiako Reyes."
On March 27, 2013, the COMELEC First Division resolved to grant the petition; hence, Reyes's COC was
accordingly cancelled. The dispositive part of said resolution reads:
WHEREFORE, in view of the foregoing, the instant Petition is GRANTED. Accordingly, the Certificate
of Candidacy of respondent REGINA ONGSIAKO REYES is hereby CANCELLED.6
Aggrieved, Reyes filed a motion for reconsideration thereto.
But while said motion was pending resolution, the synchronized local and national elections were held on
May 13, 2013.
The day after, or on May 14, 2013, the COMELEC En Banc affirmed the resolution of the COMELEC First
Division, to wit:
WHEREFORE, premises considered, the Motion for Reconsideration is hereby DENIED for lack of merit.
The March 27, 2013 Resolution of the Commission (First Division) is hereby AFFIRMED.7
A copy of the foregoing resolution was received by the Provincial Election Supervisor of Marinduque,
through Executive Assistant Rossini M. Oscadin, on May 15, 2013.
Likewise, Reyes's counsel, Atty. Nelia S. Aureus, received a copy of the same on May 16, 2013.
On May 18, 2013, despite its receipt of the May 14, 2013 COMELEC Resolution, the Marinduque
Provincial Board of Canvassers (PBOC) proclaimed Reyes as the winner of the May 13, 2013 elections for
the position of Representative of the Lone District of Marinduque.
On May 31, 2013, Velasco filed an Election Protest Ad Cautelam against Reyes in the House of
Representatives Electoral Tribunal (HRET) docketed as HRET Case No. 13-028, entitled "Lord Allan Jay
Q. Velasco v. Regina Ongsiako Reyes."
Also on the same date, a Petition for Quo Warranto Ad Cautelam was also filed against Reyes in the HRET
docketed as HRET Case No. 13-027, entitled "Christopher P Matienzo v. Regina Ongsiako Reyes."
On June 5, 2013, the COMELEC En Banc issued a Certificate of Finality8 in SPA No. 13-053 (DC), which
provides:
NOW, THEREFORE, considering that more than twenty-one (21) days have lapsed since the date of the
promulgation with no Order issued by the Supreme Court restraining its execution, the Resolution of the
Commission en banc promulgated on May 14, 2013 is hereby declared FINAL and EXECUTORY.9
On June 7, 2013, Speaker Belmonte, Jr. administered the oath of office to Reyes.
On June 10, 2013, Reyes filed before this Court a Petition for Certiorari docketed as GR. No. 207264,
entitled "Regina Ongsiako Reyes v. Commission on Elections and Joseph Socorro Tan," assailing (i) the
May 14, 2013 Resolution of the COMELEC En Banc, which denied her motion for reconsideration of the
March 27, 2013 Resolution of the COMELEC First Division cancelling her . Certificate of Candidacy (for
material misrepresentations made therein); and (ii) the June 5, 2013 Certificate of Finality.
In the meantime, it appears that Velasco filed a Petition for Certiorari before the COMELEC docketed
as SPC No. 13-010, entitled "Rep. Lord Allan Jay Q. Velasco vs. New Members/Old Members of the
Provincial Board of Canvassers (PBOC) of the Lone District of Marinduque and Regina Ongsiako
Reyes," assailing the proceedings of the PBOC and the proclamation of Reyes as null and void.
On June 19, 2013, however, the COMELEC denied the aforementioned petition in SPC No. 13-010.
On June 25, 2013, in G.R. No. 207264, this Court promulgated a Resolution dismissing Reyes's
petition, viz.:
IN VIEW OF THE· FOREGOING, the instant petition is DISMISSED, finding no grave abuse of
discretion on the part of the Commission on Elections. The 14 May 2013 Resolution of the COMELEC En
Banc affirming the 27 March 2013 Resolution of the COMELEC First Division is upheld. 10
Significantly, this Court held that Reyes cannot assert that it is the HRET which has jurisdiction over her
since she is not yet considered a Member of the House of Representatives. This Court explained that to be
considered a Member of the House of Representatives, there must be a concurrence of the following
requisites: (i) a valid proclamation, (ii) a proper oath, and (iii) assumption of office.11
On June 28, 2013, Tan filed a Motion for Execution (of the March 27, 2013 Resolution of the COMELEC
First Division and the May 14, 2013 Resolution of the COMELEC En Banc) in SPA No. 13-053 (DC),
wherein he prayed that:
[A]n Order be issued granting the instant motion; and cause the immediate EXECUTION of this Honorable
Commission's Resolutions dated March 27, 2013 and May 14, 2013; CAUSE the PROCLAMATION of
LORD ALLAN JAY Q. VELASCO as the duly elected Member of the House of Representatives for the
Lone District of Marinduque, during the May 2013 National and Local Elections. 12
At noon of June 30, 2013, it would appear that Reyes assumed office and started discharging the functions
of a Member of the House of Representatives.
379
On July 9, 2013, in SPC No. 13-010, acting on the motion for reconsideration of Velasco, the
COMELEC En Banc reversed the June 19, 2013 denial of Velasco's petition and declared null and void and
without legal effect the proclamation of Reyes. The dispositive part reads:
WHEREFORE, in view of the foregoing, the instant motion for reconsideration is hereby GRANTED. The
assailed June 19, 2013 Resolution of the First Division is REVERSED and SET ASIDE.
Corollary thereto, the May 18, 2013 proclamation of respondent REGINA ONGSIAKO REYES is declared
NULL and VOID and without any legal force and effect. Petitioner LORD ALLAN JAY Q. VELASCO
is hereby proclaimed the winning candidate for the position of representative in the House of
Representatives for the province of Marinduque.13 (Emphasis supplied.)
Significantly, the aforequoted Resolution has not been challenged in this Court.
On July 10, 2013, in SPA No. 13-053 (DC), the COMELEC En Banc, issued an Order (i) granting Tan's
motion for execution (of the May 14, 2013 Resolution); and (ii) directing the reconstitution of a new PBOC
of Marinduque, as well as the proclamation by said new Board of Velasco as the duly elected Representative
of the Lone District of Marinduque. The fallo of which states:
IN VIEW OF THE FOREGOING, the Commission hereby GRANTS the instant Motion. Accordingly, a
new composition of the Provincial Board of Canvassers of Marinduque is hereby constituted to be composed
of the following:
1. Atty. Ma. Josefina E. Dela Cruz - Chairman
2. Atty. Abigail Justine Cuaresma-Lilagan - Vice Chairman
3. Dir. Ester Villaflor-Roxas - Member
4. Three (3) Support Staffs
For this purpose, the Commission hereby directs, after due notice to the parties, the convening of the New
Provincial Board of Canvassers of Marinduque on July 16, 2013 (Tuesday) at 2:00 p.m., at the COMELEC
Session Hall. gth Floor. PDG Intramuros, Manila and to PROCLAIM LORD ALLAN JAY Q. VELASCO
as the duly elected Member of the House of Representatives for the Lone District of Marinduque in the May
13, 2013 National and Local Elections.
Further, Director Ester Villaflor-Roxas is directed to submit before the New Provincial Board of Canvassers
(NPBOC) a certified true copy of the votes of congressional candidate Lord Allan Jay Q. Velasco in the
2013 National and Local Elections.
Finally, the NPBOC of the Province of Marinduque is likewise directed to furnish copy of the Certificate of
Proclamation to the Department of Interior and Local Government (DILG) and the House of
Representatives.14
On July 16, 2013, the newly constituted PBOC of Marinduque proclaimed herein petitioner Velasco as the
duly elected Member of the House of Representatives for the Lone District of Marinduque with 48,396 votes
obtained from 245 clustered precincts.15
On July 22, 2013, the 16th Congress of the Republic of the Philippines formally convened in a joint session.
On the same day, Reyes, as the recognized elected Representative for the Lone District of Marinduque,
along with the rest of the Members of the House of Representatives, took their oaths in open session before
Speaker Belmonte, Jr.
On July 23, 2013, Reyes filed a Manifestation and Notice of Withdrawal of Petition "without waiver of her
arguments, positions, defenses/causes of action as will be articulated in the HRET which is now the proper
forum."16
On October 22, 2013, Reyes's motion for reconsideration17 (of this Court's June 25, 2013 Resolution in GR.
No. 207264) filed on July 15, 2013, was denied by this Court, viz.:
WHEREFORE, The Motion for Reconsideration is DENIED. The dismissal of the petition is affirmed.
Entry of Judgment is ordered.18
On November 27, 2013, Reyes filed a Motion for Leave of Court to File and Admit Motion for
Reconsideration in G.R. No. 207264.
On December 3, 2013, said motion was treated as a second motion for reconsideration and was denied by
this Court.
On December 5, 2013 and January 20, 2014, respectively, Velasco sent two letters to Reyes essentially
demanding that she vacate the office of Representative of the Lone District of Marinduque and to relinquish
the same in his favor.
On December 10, 2013, Velasco wrote a letter to Speaker Belmonte, Jr. requesting, among others, that he be
allowed to assume the position of Representative of the Lone District of Marinduque.
On December 11, 2013, in SPC No. 13-010, acting .on the Motion for Issuance of a Writ of Execution filed
by Velasco on November 29, 2013, praying that:
WHEREFORE, it is respectfully prayed that a writ of execution be ISSUED to implement and enforce the
May 14, 2013 Resolution in SPA No. 13-053, the July 9, 2013 Resolution in SPC No. 13-010 and the July
16, 2013 Certificate of Proclamation of Petitioner Lord Allan Jay Q. Velasco as Representative of
Marinduque. It is further prayed that a certified true copy of the writ of execution be personally served and
delivered by the Commission's bailiff to Speaker Feliciano Belmonte for the latter's implementation and
enforcement of the aforementioned May 14, 2013 Resolution and July 9, 2013 Resolution and the July 16,
2013 Certificate of Proclamation issued by the Special Board of Canvassers of the Honorable Commission. 19
the COMELEC issued an Order20 dated December 11, 2013 directing, inter alia, that all copies of its
Resolutions in SPA No. 13-053 (DC) and SPC No. 13-010, the Certificate of Finality dated June 5, 2013,
380
the Order dated July 10, 2013, and the Certificate of Proclamation dated July 16, 2013 be forwarded and
furnished to Speaker Belmonte, Jr. for the latter's information and guidance.
On February 4, 2014, Velasco wrote another letter to Speaker Belmonte, Jr. reiterating the above-mentioned
request but to no avail.
On February 6, 2014, Velasco also wrote a letter to Sec. Gen. Barua-Yap reiterating his earlier requests (July
12 and 18, 2013) to delete the name of Reyes from the Roll of Members and register his name in her place
as the duly elected Representative of the Lone District of Marinduque.
However, Velasco relates that his efforts proved futile. He alleges that despite all the letters and requests to
Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap, they refused to recognize him as the duly elected
Representative of the Lone District of Marinduque. Likewise, in the face of numerous written demands for
Reyes to vacate the position and office of the Representative of the Lone District of Marinduque, she
continues to discharge the duties of said position.
Hence, the instant Petition for Mandamus with prayer for issuance of a temporary restraining order and/or
injunction anchored on the following issues:
A. Whether or not Speaker Belmonte, Jr. can be COMPELLED, DIRECTED and ORDERED by a
Writ of Mandamus to administer the oath in favor of petitioner as duly elected Marinduque
Representative and allow him to assume said position and exercise the prerogatives of said office.
B. Whether or not respondent SG Barna-Yap can be COMPELLED, DIRECTED and ORDERED
by a Writ of Mandamus to delete the name of respondent Reyes from the Roll of Members of the
House and include the name of the Petitioner in the Roll of Members of the House of
Representatives.
C. Whether or not a TEMPORARY RESTRAINING ORDER (TRO) and a Writ of
PERMANENT. INJUNCTION can be issued to prevent, restrain and prohibit respondent Reyes
from exercising the prerogatives and performing the functions as Marinduque Representative, and
to order her to VACATE the said office.21
As to the first and second issues, Velasco contends that he "has a well-defined and clear legal right and
basis to warrant the grant of the writ of mandamus." 22 He insists that the final and executory decisions of
the COMELEC in SPA No. 13-053 (DC), and this Court in G.R. No. 207264, as well as the nullification of
respondent Reyes's proclamation and his subsequent proclamation as the duly elected Representative of the
Lone District of Marinduque, collectively give him the legal right to claim the congressional seat.
Thus, he contends that it is the ministerial duty of (i) respondent Speaker Belmonte, Jr. "to administer the
oath to [him] and to allow him to assume and exercise the prerogatives of the congressional seat for
Marinduque representative;"23 and (ii) respondent Sec. Gen. Barua-Yap "to register [his] name xx x as the
duly elected member of the House and delete the name of respondent Reyes from the Roll ofM
embers." 24 Velasco anchors his position on Codilla, Sr. v. De Venecia,25 citing a statement of this Court to
the effect that the Speaker of the House of Representatives has the ministerial duty to recognize the
petitioner therein (Codilla) as the duly elected Representative of the Fourth District of Leyte.
Despite the foregoing, Velasco asserts that both respondents Speaker Belmonte, Jr. and Sec. Gen. Barua-
Yap are unlawfully neglecting the performance of their alleged ministerial duties; thus, illegally excluding
him (Velasco) from the enjoyment of his right as the duly elected Representative of the Lone District of
Marinduque.26
With respect to the third issue, Velasco posits that the "continued usurpation and unlawful holding of such
position by respondent Reyes has worked injustice and serious prejudice to [him] in that she has already
received the salaries, allowances, bonuses and emoluments that pertain to the position of Marinduque
Representative since June 30, 2013 up to the present in the amount of around several hundreds of thousands
of pesos." Therefore, he prays for the issuance of a temporary restraining order and a writ of permanent
injunction against respondent Reyes to "restrain, prevent and prohibit [her] from usurping the position." 27
In her Comment, Reyes contends that the petition is actually one for quo warranto and not mandamus given
that it essentially seeks a declaration that she usurped the subject office; and the installation of Velasco in
her place by Speaker Belmonte, Jr. when the latter administers his oath of office and enters his name in the
Roll of Members. She argues that, being a collateral attack on a title to public office, the petition must be
dismissed as enunciated by the Court in several cases.28
As to the issues presented for resolution, Reyes questions the jurisdiction of the Court over Quo
Warranto cases involving Members of the House of Representatives. She posits that "even if the Petition for
Mandamus be treated as one of Quo Warranto, it is still dismissible for lack of jurisdiction and absence of a
clear legal right on the part of [Velasco]. "29 She argues that numerous jurisprudence have already ruled that
it is the House of Representatives Electoral Tribunal that has the sole and exclusive jurisdiction over all
contests relating to the election, returns and qualifications of Members of the House of Representatives.
Moreover, she insists that there is also an abundance of case law that categorically states that the
COMELEC is divested of jurisdiction upon her proclamation as the winning candidate, as, in fact, the HRET
had already assumed jurisdiction over quo warranto cases30 filed against Reyes by several individuals.
Given the foregoing, Reyes concludes that this Court is "devoid of original jurisdiction to annul [her]
proclamation. "31But she hastens to point out that (i) "[e]ven granting for the sake of argument that the
proclamation was validly nullified, [Velasco] as second placer cannot be declared the winner x x x" as he
was not the choice of the people of the Province of Marinduque; and (ii) Velasco is estopped from asserting
the jurisdiction of this Court over her (Reyes) election because he (Velasco) filed an Election Protest Ad
Cautelam in the HRET on May 31, 2014.
The Office of the Solicitor General (OSG), arguing for Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap,
opposed Velasco's petition on the following grounds:
I.
UPON RESPONDENT REYES' PROCLAMATION ON MAY 18, 2013, EXCLUSIVE JURISDICTION
TO RESOLVE ELECTION CONTESTS INVOLVING RESPONDENT REYES, INCLUDING THE
VALIDITY OF HER PROCLAMATION AND HER ELIGIBILITY FOR OFFICE, VESTED IN THE
HRET.
Hence, until and unless the HRET grants any quo warranto petition or election protest filed against
respondent Reyes, and such HRET resolution or resolutions become final and executory, respondent Reyes
381
may not be restrained from exercising the prerogatives of Marinduque Representative, and respondent Sec.
Gen. Barua-Yap may not be compelled by mandamus to remove respondent Reyes :S name from the Roll of
Members of the House.
II.
CODILLA v. COMELEC IS NOT APPLICABLE TO THIS CASE, GIVEN THAT PETITIONER, BEING
MERELY THE SECOND PLACER IN THE MAY 13, 2013 ELECTIONS, CANNOT VALIDLY
ASSUME THE POST OF MARINDUQUE REPRESENTATIVE.
Hence, respondents Speaker Belmonte and Sec. Gen. Barua-Yap may not be compelled by mandamus to,
respectively, administer the proper oath to petitioner and register the latter's name in the Roll of Members
of the House.
III.
PETITIONER IS NOT ENTITLED TO THE INJUNCTIVE RELIEFS PRAYED FOR.32
The OSG presents the foregoing arguments on the premise that there is a need for this Court to revisit its
twin Resolutions dated June 25, 2013 and October 22, 2013 both in GR. No. 207264, given that (i) this
Court was "divided" when it issued the same; and (ii) there were strong dissents to the majority opinion. It
argues that this Court has in the past revisited decisions already final and executory; there is no hindrance
for this Court to do the same in G.R. No. 207264.
Moreover, the OSG contends that:
Despite the finality of the June 25, 2013 Resolution and the October 22, 2013 Resolution, upholding the
cancellation of respondent Reyes's CoC, there has been no compelling reason for the House to withdraw its
recognition of respondent Reyes as Marinduque Representative, in the absence· of any specific order or
directive to the House. To be sure, there was nothing in the Honorable Court's disposition in Reyes v.
COMELEC that required any action from the House. Again, it bears emphasis that neither petitioner nor
respondents Speaker Belmonte and Sec. Gen. Barna-Yap were parties in Reyes v. COMELEC.
Further, records with the HRET show that the following cases have been filed against respondent Reyes:
(i) Case No. 13-036 (Quo Warranto), entitled Noeme Mayores Tan & Jeasseca L.
Mapacpac v. Regina Ongsiako Reyes;
(ii) Case No. 13-037 (Quo Warranto), entitled Eric D. Junio v. Regina Ongsiako Reyes;
(iii) Case No. 13-027 (Quo Warranto ), entitled Christopher Matienzo v. Regina Ongsiako
Reyes; and
(iv) Case No. 13-028 (Election Protest), entitled Lord Allan Jay Velasco v. Regina Ongsiako
Reyes.33
And in view of the cases filed in the HRET, the OSG insists that:
If the jurisdiction of the COMELEC were to be retained until the assumption of office of the winner, at noon
on the thirtieth day of June next following the election, then there would obviously be a clash of jurisdiction
between the HRET and the COMELEC, given that the 2011 HRET Rules provide that the appropriate cases
should be filed before it within 15 days from the date of proclamation of the winner. If, as the June 25, 2013
Resolution provides, the HRET's jurisdiction begins only after assumption of office, at noon of June 30
following the election, then quo warranto petitions and election protests filed on or after said date would be
dismissed outright by the HRET under its own rules for having been filed out of time, where the winners
have already been proclaimed within the period after the May elections and up to June 14. 34
In recent development, however, the HRET promulgated a Resolution on December 14, 2015 dismissing
HRET Case Nos. 13-036 and 13-037,35 the twin petitions for quo warranto filed against Reyes, to wit:
WHEREFORE, in view of the foregoing, the September 23, 2014 Motion for Reconsideration of Victor
Vela Sioco is hereby GRANTED. The September 11, 2014 Resolution of [the] Tribunal is
hereby REVERSED and SET ASIDE. Accordingly, the present Petitions for Quo Warranto are
hereby DISMISSED for lack of jurisdiction.36
In the said Resolution, the HR.ET held that "the final Supreme Court ruling in GR. No. 207264 is the
COGENT REASON to set aside the September 11, 2014 Resolution." 37
To make clear, the September 11, 2014 Resolution of the HRET ordered the dismissal of a Petition-In-
Intervention filed by one Victor Vela Sioco (Sioco) in the twin petitions for quo warranto, for "lack of
merit." Further, the HRET directed "the hearing and reception of evidence of the two Petitions for Quo
Warranto against x x x Respondent [Reyes] to proceed. "38 Sioco, however, moved for the reconsideration of
the said September 11, 2014 HR.ET Resolution based on the argument that the latter was contrary to law
and jurisprudence given the Supreme Court ruling in G.R. No. 207264.
Subsequently, the December 14, 2015 Resolution of the HRET held that-
The Tribunals Jurisdiction
It is necessary to clarify the Tribunal's jurisdiction over the present petitions for quo warranto, considering
the parties' divergent postures on how the Tribunal should resolve the same vis-a-vis the Supreme Court
ruling in G.R. No. 207264.
The petitioners believe that the Tribunal has jurisdiction over their petitions. They pray that "after due
proceedings," the Tribunal "declare Respondent REGINA ONGSIAKO REYES
DISQUALIFIED/INELIGIBLE to sit as Member of the House of Representatives, representing the Province
of Marinduque." In addition, the petitioner Eric Del Mundo Junio urges the Tribunal to follow the Supreme
Court pronouncement in G.R. No. 207264.
On the other hand, Victor Vela Sioco, in his Petition-In-Intervention, pleads for the outright dismissal of the
present petitions considering the Supreme Court final ruling in G.R. No. 207264. For her part, respondent
382
Regina Reyes prays too for the dismissal of the present petitions, albeit after reception of evidence by the
contending parties.
The constitutional mandate of the Tribunal is clear: It is "the sole judge of all contests relating to the
election, returns, and qualifications of [House] Members." Such power or authority of the Tribunal is echoed
in its 2011 Rules of the House of Representatives Electoral Tribunal: "The Tribunal is the sole judge of all
contests relating to the elections, returns, and qualifications of the Members of the House of
Representatives."
xxxx
In the present cases, before respondent Regina Reyes was proclaimed on May 18, 2013, the COMELEC En
Banc, in its Resolution of May 14, 2013 in SPA No. 13-053 (DC), had already resolved that the COMELEC
First Division correctly cancelled her COC on the ground that she lacked the Filipino citizenship and
residency requirements. Thus, the COMELEC nullified her proclamation. When Regina Reyes challenged
the COMELEC actions, the Supreme Court En Banc, in its Resolution of June 25, 2013 in G.R. No. 207246,
upheld the same.
With the COMELEC's cancellation of respondent Regina Reyes' COC, resulting in the nullification of her
proclamation, the Tribunal, much as we would want to, cannot assume jurisdiction over the present
petitions. The jurisdiction of the HRET begins only after the candidate is considered a Member of the House
of Representatives. And to be considered a Member of the House of Representatives, there must be a
concurrence of the following requisites: (1) a valid proclamation, (2) a proper oath, and (3) assumption of
office, so the Supreme Court pronounced in its Resolution of June 25, 2013 in G.R. No. 207264, thus:
x x x, the jurisdiction of the HRET begins only after the candidate is considered a Member of the House of
Representatives, as stated in Section 17, Article VI of the 1987 Constitution:
xxxx
As held in Marcos v. COMELEC, the HRET does not have jurisdiction over a candidate who is not a
member of the House of Representatives x x x.
xxxx
The next inquiry, then, is when is a candidate considered a Member of the House of Representatives?
In Vinzons-Chato v. COMELEC, citing Aggabao v. COMELEC and Guerrero v. COMELEC, the Court
ruled that:
The Court has invariably held that once a winning candidate has been proclaimed, taken his oath, and
assumed office as a Member of the House of Representatives, the COMELEC's jurisdiction over election
contests relating to his election, returns, and qualifications ends, and the HRET's own jurisdiction begins.xx
x
From the foregoing, it is then clear that to be considered a Member of the House of Representatives, there
must be a concurrence of the following requisites: (1) a valid proclamation, (2) a proper oath, and (3)
assumption of office x x x.
Based on the above-quoted ruling of the Supreme Court, a valid proclamation is the first essential element
before a candidate can be considered a Member of the House of Representatives over which the Tribunal
could assume jurisdiction. Such element is obviously absent in the present cases as Regina Reyes'
proclamation was nullified by the COMELEC, which nullification was upheld by the Supreme Court. On
this ground alone, the Tribunal is without power to assume jurisdiction over the present petitions since
Regina Reyes "cannot be considered a Member of the House of Representatives," as declared by the
Supreme Court En Banc in G.R. No. 207264. It further stresses:
"x x x there was no basis for the proclamation of petitioner [Regina Reyes] on 18 May 2013. Without the
proclamation, the petitioner's oath of office is likewise baseless, and without a precedent oath of office, there
can be no valid and effective assumption of office."
The Supreme Court has spoken. Its pronouncements must be respected. Being the ultimate guardian of the
Constitution, and by constitutional design, the Supreme Court is "supreme in its task of adjudication; x x x.
As a rule, all decisions and determinations in the exercise of judicial power ultimately go to and stop at the
Supreme Court whose judgment is final." This Tribunal, as all other courts, must take their bearings from
the decisions and rulings of the Supreme Court.39
Incidentally, it appears that an Information against Reyes for violation of Article 1 77 (Usurpation of
Official Functions) of the Revised Penal Code, dated August 3, 2015, has been filed in
court,40 entitled "People of the Philippines v. Regina Ongsiako Reyes. "41
The Issue
The issue for this Court's resolution boils down to the propriety of issuing a writ of mandamus to compel
Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap to perform the specific acts sought by Velasco in this
petition.
The Ruling
The petition has merit.
At the outset, this Court observes that the respondents have taken advantage of this petition to re-litigate
what has been settled in G.R. No. 207264. Respondents are reminded to respect the Entry of Judgment that
has been issued therein on October 22, 2013.
After a painstaking evaluation of the allegations in this petition, it is readily apparent that this special civil
action is really one for mandamus and not a quo warranto case, contrary to the asseverations of the
respondents.
A petition for quo warranto is a proceeding to determine the right of a person to the use or exercise of a
franchise or office and to oust the holder from its enjoyment, if his claim is not well-founded, or if he has
383
forfeited his right to enjoy the privilege. Where the action is filed by a private person, he must prove that he
is entitled to the controverted position; otherwise, respondent has a right to the undisturbed possession of the
office.42 In this case, given the present factual milieu, i.e., (i) the final and executory resolutions of this
Court in G.R. No. 207264; (ii) the final and executory resolutions of the COMELEC in SPA No. 13-053
(DC) cancelling Reyes's Certificate of Candidacy; and (iii) the final and executory resolution of the
COMELEC in SPC No. 13-010 declaring null and void the proclamation of Reyes and proclaiming Velasco
as the winning candidate for the position of Representative for the Lone District of the Province of
Marinduque - it cannot be claimed that the present petition is one for the determination of the right of
Velasco to the claimed office.
To be sure, what is prayed for herein is merely the enforcement of clear legal duties and not to try disputed
title. That the respondents make it appear so will not convert this petition to one for quo warranto.
Section 3, Rule 65 of the Rules of Court, as amended, provides that any person may file a verified petition
for mandamus "when any tribunal, corporation, board, officer or person unlawfully neglects the performance
of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully
excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is
no other plain, speedy and adequate remedy in the ordinary course of law." A petition for mandamus will
prosper if it is shown that the subject thereof is a ministerial act or duty, and not purely discretionary on the
part of the board, officer or person, and that the petitioner has a well-defined, clear and certain right to
warrant the grant thereof.43
The difference between a ministerial and discretionary act has long been established. A purely ministerial
act or duty is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon
the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him
the right to decide how or when the duty shall be performed, such duty is discretionary and not ministerial.
The duty is ministerial only when the discharge of the same requires neither the exercise of official
discretion or judgment.44
As the facts stand in this case, Speaker Belmonte, Jr. and Sec. Gen. Barua-Y ap have no discretion whether
or not to administer the oath of office to Velasco and to register the latter's name in the Roll of Members of
the House of Representatives, respectively. It is beyond cavil that there is in existence final and executory
resolutions of this Court in G.R. No. 207264 affirming the final and executory resolutions of the COMELEC
in SPA No. 13-053 (DC) cancelling Reyes's Certificate of Candidacy. There is likewise a final and
executory resolution of the COMELEC in SPC No. 13-010 declaring null and void the proclamation of
Reyes, and proclaiming Velasco as the winning candidate for the position of Representative for the Lone
District of the Province of Marinduque.
The foregoing state of affairs collectively lead this Court to consider the facts as settled and beyond dispute -
Velasco is the proclaimed winning candidate for the Representative of the Lone District of the
Province of Marinduque.
Reyes argues in essence that this Court is devoid of original jurisdiction to annul her proclamation. Instead,
it is the HRET that is constitutionally mandated to resolve any questions regarding her election, the returns
of such election, and her qualifications as a Member of the House of Representatives especially so that she
has already been proclaimed, taken her oath, and started to discharge her duties as a Member of the House of
Representatives representing the Lone District of the Province of Marinduque. But the confluence of the
three acts in this case - her proclamation, oath and assumption of office - has not altered the legal
situation between Velasco and Reyes.
The important point of reference should be the date the COMELEC finally decided to cancel the Certificate
of Candidacy (COC) of Reyes which was on May 14, 2013. The most crucial time is when Reyes's COC
was cancelled due to her non-eligibility to run as Representative of the Lone District of the Province of
Marinduque - for without a valid COC, Reyes could not be treated as a candidate in the election and
much less as a duly proclaimed winner. That particular decision of the COMELEC was promulgated even
before Reyes' s proclamation, and which was affirmed by this Court's final and executory Resolutions dated
June 25, 2013 and October 22, 2013.
This Court will not give premium to the illegal actions of a subordinate entity of the COMELEC, the PBOC
who, despite knowledge of the May 14, 2013 resolution of the COMELEC En Banc cancelling Reyes' s
COC, still proclaimed her as the winning candidate on May 18, 2013. Note must also be made that as early
as May 16, 2013, a couple of days before she was proclaimed, Reyes had already received the said decision
cancelling her COC. These points clearly show that the much argued proclamation was made in clear
defiance of the said COMELEC En Banc Resolution.
That Velasco now has a well-defined, clear and certain right to warrant the grant of the present petition
for mandamus is supported by the following undisputed facts that should be taken into consideration:
First. At the time of Reyes's proclamation, her COC was already cancelled by the COMELEC En
Banc in its final finding in its resolution dated May 14, 2013, the effectivity of which was not
enjoined by this Court, as Reyes did not avail of the prescribed remedy which is to seek a
restraining order within a period of five (5) days as required by Section 13(b), Rule 18 of
COMELEC Rules. Since no restraining order was forthcoming, the PBOC should have refrained
from proclaiming Reyes.
Second. This Court upheld the COMELEC decision cancelling respondent Reyes's COC in its
Resolutions of June 25, 2013 and October 22, 2013 and these Resolutions are already final and
executory.
Third. As a consequence of the above events, the COMELEC in SPC No. 13-010 cancelled
respondent Reyes's proclamation and, in turn, proclaimed Velasco as the duly elected Member of
the House of Representatives in representation of the Lone District of the Province of
Marinduque. The said proclamation has not been challenged or questioned by Reyes in any
proceeding.
Fourth. When Reyes took her oath of office before respondent Speaker Belmonte, Jr. in open
session, Reyes had NO valid COC NOR a valid proclamation.
Thus, to consider Reyes' s proclamation and treating it as a material fact in deciding this case will
paradoxically alter the well-established legal milieu between her and Velasco.
384
Fifth. In view of the foregoing, Reyes HAS ABSOLUTELY NO LEGAL BASIS to serve as a
Member of the House of Representatives for the Lone District of the Province of Marinduque, and
therefore, she HAS NO LEGAL PERSONALITY to be recognized as a party-respondent at
a quo warranto proceeding before the HRET.
And this is precisely the basis for the HRET' s December. 14, 2015 Resolution acknowledging and ruling
that it has no jurisdiction over the twin petitions for quo warranto filed against Reyes. Its finding was based
on the existence of a final and executory ruling of this Court in G.R. No. 207264 that Reyes is not a bona
fide member of the House of Representatives for lack of a valid proclamation. To reiterate this Court's
pronouncement in its Resolution, entitled Reyes v. Commission on Elections45-
The averred proclamation is the critical pointer to the correctness of petitioner's submission. The crucial
question is whether or not petitioner [Reyes] could be proclaimed on 18 May 2013. Differently stated, was
there basis for the proclamation of petitioner on 18 May 2013?
Dates and events indicate that there was no basis for the proclamation of petitioner on 18 May 2013.
Without the proclamation, the petitioner's oath of office is likewise baseless, and without a precedent oath of
office, there can be no valid and effective assumption of office.
xxxx
"More importantly, we cannot disregard a fact basic in this controversy - that before the proclamation of
petitioner on 18 May 2013, the COMELEC En Banc had already finally disposed of the issue of petitioner's
[Reyes] lack of Filipino citizenship and residency via its Resolution dated 14 May 2013. After 14 May 2013,
there was, before the COMELEC, no longer any pending case on petitioner's qualifications to run for the
position of Member of the House of Representatives. x x x."
As the point has obviously been missed by the petitioner [Reyes] who continues to argue on the basis of her
"due proclamation," the instant motion gives us the opportunity to highlight the undeniable fact we here
repeat that the proclamation which petitioner secured on 18 May 2013 was WITHOUT ANY BASIS."
(Emphasis supplied.)
Put in another way, contrary to the view that the resort to the jurisdiction of the HRET is a plain, speedy and
adequate remedy, such recourse is not a legally available remedy to any party, specially to Velasco, who
should be the sitting Member of the House of Representatives if it were not for the disregard by the
leadership of the latter of the binding decisions of a constitutional body, the COMELEC, and the Supreme
Court
Though the earlier existence of the twin quo warranto petitions filed against Reyes before the HRET had
actually no bearing on the status of finality of the decision of the COMELEC in SPC No. 13-010.
Nonetheless, their dismissal pursuant to the HRET' s December 14, 2015 Resolution sustained Velasco's
well-defined, clear and certain right to the subject office.
The present Petition for Mandamus seeks the issuance of a writ of mandamus to compel respondents
Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap to acknowledge and recognize the final and executory
Decisions and Resolution of this Court and of the COMELEC by administering the oath of office to Velasco
and entering the latter's name in the Roll of Members of the House of Representatives. In other words, the
Court is called upon to determine whether or not the prayed for acts, i.e., (i) the administration of the oath of
office to Velasco; and (ii) the inclusion of his name in the Roll of Members, are ministerial in character vis-
a-vis the factual and legal milieu of this case. As we have previously stated, the administration of oath and
the registration of Velasco in the Roll of Members of the House of Representatives for the Lone District of
the Province of Marinduque are no longer a matter of discretion or judgment on the part of Speaker
Belmonte, Jr. and Sec. Gen. Barua-Yap. They are legally duty-bound to recognize Velasco as the duly
elected Member of the House of Representatives for the Lone District of Marinduque in view of the ruling
rendered by this Court and the COMELEC'S compliance with the said ruling, now both final and executory.
It will not be the first time that the Court will grant Mandamus to compel the Speaker of the House of
Representatives to administer the oath to the rightful Representative of a legislative district and the
Secretary-General to enter said Representative's name in the Roll of Members of the House of
Representatives. In Codilla, Sr. v. De Venecia,46 the Court decreed:
Under Rule 65, Section 3 of the 1997 Rules of Civil Procedure, any person may file a verified petition
for mandamus "when any tribunal, corporation, board, officer or person unlawfully neglects the performance
of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully
excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is
no other plain, speedy and adequate remedy in the ordinary course of law." For a petition for mandamus to
prosper, it must be shown that the subject of the petition for mandamus is a ministerial act or duty, and not
purely discretionary on the part of the board, officer or person, and that the petitioner has a well-defined,
clear and certain right to warrant the grant thereof.
The distinction between a ministerial and discretionary act is well delineated. A purely ministerial act or
duty is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon
the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him
the right to decide how or when the duty shall be performed, such duty is discretionary and not ministerial.
The duty is ministerial only when the discharge of the same requires neither the exercise of official
discretion or judgment.
In the case at bar, the administration of oath and the registration of the petitioner in the Roll of Members of
the House of Representatives representing the 4th legislative district of Leyte is no longer a matter of
discretion on the part of the public respondents. The facts are settled and beyond dispute: petitioner garnered
71,350 votes as against respondent Locsin who only got 53,447 votes in the May 14, 2001 elections. The
COMELEC Second Division initially ordered the proclamation of respondent Locsin; on Motion for
Reconsideration the COMELEC en banc set aside the order of its Second Division and ordered the
proclamation of the petitioner. The Decision of the COMELEC en banc has not been challenged before this
Court by respondent Locsin and said Decision has become final and executory.
In sum, the issue of who is the rightful Representative of the 4 th legislative district of Leyte has been finally
settled by the COMELEC en banc, the constitutional body with jurisdiction on the matter. The rule of law
demands that its Decision be obeyed by all officials of the land There is no alternative to the rule of law
except the reign of chaos and confusion.
385
IN VIEW WHEREOF, the Petition for Mandamus is granted. Public Speaker of the House of
Representatives shall administer the oath of petitioner EUFROCINO M. CODILLA, SR., as the duly-elected
Representative of the 4th legislative district of Leyte. Public respondent Secretary-General shall likewise
register the name of the petitioner in the Roll of Members of the House of Representatives after he has taken
his oath of office. This decision shall be immediately executory. (Citations omitted.)
Similarly, in this case, by virtue of (i) COMELEC en bane Resolution dated May 14, 2013 in SPA No. 13-
053 (DC); (ii) Certificate of Finality dated June 5, 2013 in SPA No. 13-053 (DC); (iii) COMELEC en
banc Resolution dated June 19, 2013 in SPC No. 13-010; (iv) COMELEC en banc Resolution dated July 10,
2013 in SPA No. 13-053 (DC); and (v) Velasco's Certificate of Proclamation dated July 16, 2013, Velasco is
the rightful Representative of the Lone District of the Province of Marinduque; hence, entitled to a
writ of Mandamus.
As to the view of Reyes and the OSG that since Velasco, Speaker Belmonte, Jr. and Sec. Gen. Barna-Yap
are not parties to G.R. No. 207264, Velasco can neither ask for the enforcement of the Decision rendered
therein nor argue that the doctrine of res judieata by conclusiveness of judgment applies to him and the
public respondents, this Court maintains that such contention is incorrect. Velasco, along with public
respondents Speaker Belmonte, Jr. and Sec. Gen. Barna-Yap, are all legally bound by this Court's judgment
in G.R. No. 207264, i.e., essentially, that the COMELEC correctly cancelled Reyes' s COC for Member of
the House of Representatives for the Lone District of the Province of Marinduque on the ground that the
latter was ineligible for the subject position due to her failure to prove her Filipino citizenship and the
requisite one-year residency in the Province of Marinduque. A contrary view would have our dockets
unnecessarily clogged with petitions to be filed in every direction by any and all registered voters not a party
to a case to question the final decision of this Court. Such restricted interpretation of res judieata is
intolerable for it will defeat this Court's ruling in G.R. No. 207264. To be sure, Velasco who was duly
proclaimed by COMELEC is a proper party to invoke the Court's final judgment that Reyes was ineligible
for the subject position.47
It is well past the time for everyone concerned to accept what has been adjudicated and take judicial notice
of the fact that Reyes's ineligibility to run for and be elected to the subject position had already been long
affirmed by this Court. Any ruling deviating from such established ruling will be contrary to the Rule of
Law and should not be countenanced.
In view of finality of the rulings in G.R. No. 207264, SPA No. 13-053 (DC) and SPC No. 13-010, there is
no longer any issue as to who is the rightful Representative of the Lone District of the Province of
Marinduque; therefore, to borrow the pronouncement of this Court, speaking through then Associate Justice
Reynato S. Puno, in Codilla, Sr. v. De Venecia,48 "[t]he rule of law demands that its Decision be obeyed by
all officials of the land. There is no alternative to the rule of law except the reign of chaos and confusion."
WHEREFORE, the Petition for Mandamus is GRANTED. Public respondent Hon. Feliciano R. Belmonte,
Jr., Speaker, House of Representatives, shall administer the oath of office of petitioner Lord Allan Jay Q.
Velasco as the duly-elected Representative of the Lone District of the Province of Marinduque. And public
respondent Hon. Marilyn B. Barua-Yap, Secretary General, House of Representatives, shall register the
name of petitioner Lord Allan Jay Q. Velasco in the Roll of Members of the House of Representatives after
he has taken his oath of office. This Decision shall be IMMEDIATELY EXECUTORY.
SO ORDERED.
386

SECOND DIVISION
G.R. No. 142304 June 20, 2001
CITY OF MANILA, petitioner,
vs.
OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA AND ADELAIDA, ALL
SURNAMED SERRANO, respondents.
Mendoza, J.:
This is a petition for review on certiorari of the decision, dated November 16, 1999, and resolution, dated
February 23, 2000, of the Court of Appeals reversing the order, dated December 15, 1998, of the Regional
Trial Court, Branch 16, Manila and perpetually enjoining it from proceeding with the petitioner's complaint
for eminent domain in Civil Case No. 94-72282.
The facts are as follows:
On December 21, 1993, the City Council of Manila enacted the Ordinance No. 7833, authorizing the
expropriation of certain properties in Manila 's First District in Tondo, covered by TCT Nos. 70869, 105201,
105202, and 138273 of the Register of Deeds of Manila, which are to be sold and distributed to qualified
occupants pursuant to the Land Use Development Program of the City of Manila.
One of the properties sought to be expropriated, denominated as Lot 1-C, consists of 343.10 square meters.
It is covered by TCT No. 138272 which was derived from TCT No. 70869 issued in the name of Feliza De
Guia.1 After her death, the estate of Feliza De Guia was settled among her heirs by virtue of a compromise
agreement, which was duly approved by the Regional Trial Court, Branch 53, Manila in its decision, dated
May 8, 1986.2 In 1989, Alberto De Guia, one of the heirs of Feliza De Guia, died, as a result of which his
estate, consisting of his share in the properties left by his mother, was partitioned among his heirs. Lot 1-C
was assigned to Edgardo De Guia, one of the heirs of Alberto De Guia. 3 On April 15, 1994, Edgardo De
Guia was issued TCT No. 215593, covering Lot 1-C.4On July 29, 1994, the said property was transferred to
Lee Kuan Hui, in whose name TCT No. 217018 was issued.5
The property was subsequently sold on January 24,1996 to Demetria De Guia to whom TCT No. 226048
was issued.6
On September 26, 1997, petitioner City of Manila filed an amended complaint for expropriation, docketed
as Civil Case No. 94-72282, with the Regional Trial Court, Branch 16, Manila, against the supposed owners
of the lots covered by TCT Nos. 70869 (including Lot 1-C), 105201, 105202 and 138273, which included
herein respondents Oscar, Felicitas, Jose, Benjamin, Estelita, Leonora, Adelaida, all surnamed are
Serrano.7 On November 12, 1997, respondents filed a consolidated answer, in which they alleged that their
mother, the late Demetria De Guia, had acquired Lot l-C from Lee Kian Hui; that they had been the bona
fide occupants of the said parcel of land for more than 40 years; that the expropriation of Lot l-C would
result in their disclosure, it being the only residential land left to them by their deceased mother; and that the
said lot was exempt from expropriation because dividing the said parcel of land among them would entitle
each of them to only about 50 square meters of land. Respondents, therefore, prayed that judgment be
rendered declaring Lot l-C exempt from expropriation and ordering the cancellation of the notice annotated
on the back of TCT No. 226048,8 regarding the pendency of Civil Case No. 94-72282. for eminent domain
filed by petitioner.9
Upon motion by petitioner, the trial court issued an order, dated October 9, 1998, directing petitioner to
deposit the amount of Pl,825,241.00 equivalent to the assessed value of the properties. 10 After petitioner had
made the deposit, the trial court issued another order, dated December 15, 1998, directing the issuance of a
writ of possession in favor of petitioner.ll
Respondents filed a petition for certiorari with the Court of Appeals, alleging that the expropriation of Lot l-
C would render respondents, who are actual occupants thereof, landless; that Lot l-C is exempt from
expropriation because R.A. No. 7279 provides that properties consisting of residential lands not exceeding
300 square meters in highly urbanized cities are exempt from expropriations; that respondents would only
387
receive around 49 square meters each after the partition of Lot l-C which consists of only 343.10 square
meters; and that R.A. No. 7279 was not meant to deprive an owner of the entire residential land but only that
in excess of 300 square meters.12
On November 16, 1999, the Court of Appeals rendered a decision holding that Lot l-C is not exempt from
expropriation because it undeniably exceeds 300 square meters which is no longer considered a small
property within the framework of R.A. No. 7279. However, it held that in accordance with the ruling
in Filstream International Inc. v. Court of Appeals,13 the other modes of acquisition of lands enumerated in
§§9-10 of the law must first be tried by the city government before it can resort to expropriation. As
petitioner failed to show that it had done so, the Court of Appeals gave judgment for respondents and
enjoined petitioner from expropriating Lot 1-C. The dispositive portion of its decision reads:
WHEREFORE, in view of all the foregoing, the instant petition is hereby GIVEN DUE COURSE
and accordingly GRANTED. The Order, dated December 15, 1998, denying petitioner's motion for
reconsideration issued by the respondent Regional Trial Court of Manila, Branch 16, in Civil Case
No. 94-72282 is hereby REVERSED and SET ASIDE. Let a writ of injunction issue perpetually
enjoining the same respondent court from proceeding with the complaint for eminent domain in
Civil Case No. 94-72282,14
In its resolution, dated February 23, 2000, the Court of Appeals likewise denied two motions for
reconsideration filed by petitioner. l5 Hence this petition. Petitioner contends that the Court of Appeals erred
in --
1) Giving due course to the petition of the Serranos under Rule 65 notwithstanding its own
declaration of the impropriety of the resort to the writ and filing thereof with the wrong appellate
court;
2) Concluding that the Order of October 9, 1998 which authorizes the immediate entry of the City
as the expropriating agency into the property sough to be expropriated upon the deposit of the
provisionally fixed fair market value thereof as tantamount to condemnation of the property
without prior showing of compliance with the acquisition of other lands enumerated in Sec. 9 of
R.A. 7279 ergo a violation of due process of the Serranos by the doctrinaire application of
FILSTREAM ruling and corrollarily,
3) In prohibiting permanently, by writ of injunction, the trial court from proceeding with a
complaint for expropriation of the City in Civil Case No. 94-72282.16
We will deal with these contentions in the order they are presented.
First. Petitioner contends that the respondents' remedy against the order of the trial court granting a writ of
possession was not to file a petition for certiorari under Rule 65 but a petition for review under Rule 45
which should have been filed in the Supreme Court. 17
This contention has no merit. A petition for review under Rule 45 is a mode of appeal. Accordingly, it could
not have been resorted to by the respondents inasmuch as the order of the trial court granting a writ of
possession was merely interlocutory from which no appeal could be taken. Rule 45, §1 of the 1997 Rules for
Civil Procedure applies only to final judgments or orders of the Court of Appeals, the Sandiganbayan, and
the Regional Trial Court. On the other hand, a petition for certiorari is the suitable remedy in view of Rule
65, §1 which provides:
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 certainly and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental reliefs as laws and
justice may require.
Respondents' petition before the Court of Appeals alleged that the trial court had acted without or in excess
of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing the order,
dated December 15, 1998, resolving that Lot 1-C is not exempt from expropriation and ordering the issuance
of the writ of possession in favor of petitioner. 18
Second. Petitioner faults the Court of Appeals for deciding issues not raised in the trial court, specifically the
question of whether or not there was compliance with §§9 and 10 of RA. No. 7279. It argues that the sole
defense set up by respondents in their petition before the Court of Appeals was that their property was
exempted from expropriation because it comes within the purview of a "small property" as defined by R.A.
No. 7279 . Accordingly, the Court of Appeals should not have applied the doctrine laid down by this Court
in the Filstream19 case as such issue was not raised by respondents in their petition before the Court of
Appeals.
This contention likewise has no merit. In their petition before the Court of Appeals, respondents raised the
following issues:
1. Whether or not the subject Lot 1-C with an area of 343.10 square meters covered by T.C.T. No.
226048 in the name of petitioners' mother, the late Demetria [De Guia] Serrano, may be lawfully
expropriated "for the public purpose of providing landless occupants thereof homelots of their own
under the "land-for-the landless program of respondent City of Manila."
2. Whether or not the expropriation of the said Lot l-C by respondent City of Manila violates the
equal protection clause of the Constitution, since petitioners, with the exemption of petitioner
Oscar G. Serranno, who are likewise landless are actual occupants hereof.
3. Whether or not Lot 1-C is or may be exempted from expropriation pursuant to R.A. 7279,
otherwise known as the Urban Development and Housing Act of 1992.20
It is clear that respondents raised in issue the propriety of the expropriation of their property in connection
with RA. No. 7279. Although what was discussed at length in their petition before the Court of Appeals was
whether or not the said property could be considered a small property within the purview of the exemption
under the said law, the other provisions of the said law concerning expropriation proceedings need also be
looked into to address the first issue raised by the respondents and to determine whether or not expropriation
of Lot 1-C was proper under the circumstances. The Court of Appeals properly considered relevant
provisions of R A. No.7279 to determine the issues raised by respondents. Whether or not it correctly
applied the doctrine laid down in Filstream in resolving the issues raised by respondents, however, is a
different matter altogether, and this brings us to the next point.
Third. Petitioner contends that the Court of Appeals erroneously presumed that Lot 1-C has been ordered
condemned in its favor when the fact is that the order of the trial court, dated December 15, 1998, merely
authorized the issuance of a writ of possession and petitioner's entry into the property pursuant to Rule 67,
§2. At that stage, it was premature to determine whether the requirements of RA. No. 7279, §§9 - 10 have
been complied with since no evidentiary hearing had yet been conducted by the trial court. 21
This contention is well taken. Rule 67, §2 provides:
Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the
plaintiff shall have the right to take or enter upon possession of the real property involved if he
deposits with the authorized government depository an amount equivalent to the assessed value of
the property for purposes of taxation to be held by such bank subject to the orders of the court.
Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a
certificate of deposit of a government bank of the Republic of the Philippines payable on demand
to the authorized government depositary.
If personal property is involved, its value shall be provisionally ascertained and the amount to be
deposited shall be fixed by the court.
After such deposit is made the court shall order the sheriff or other proper officer to forthwith
place the plaintiff in possession of the property involved and promptly submit a report thereof to
the court with service of copies to the parties.
Thus, a writ of execution may be issued by a court upon the filing by the government of a complaint for
expropriation sufficient in form and substance and upon deposit made by the government of the amount
388
equivalent to the assessed value of the property subject to expropriation. Upon compliance with these
requirements, the issuance of the writ of possession becomes ministerial. 22 In this case, these requirements
were satisfied and, therefore, it became the ministerial duty of the court to issue the writ of possession.
The Court of Appeals, however, ruled that petitioner failed to comply with the requirements laid down in
§§9 - 10 of RA. No. 7279 and reiterated in Filstream ruling. This is error. The ruling in the Filstream was
necessitated because an order of condemnation had already been issued by the trial court in that case. Thus,
the judgment in that case had already become final. In this case, the trial court has not gone beyond the
issuance of a writ of possession. Hearing is still to be held to determine whether or not petitioner indeed
complied with the requirements provided in RA. No. 7279. It is, therefore, premature at this stage of the
proceedings to find that petitioner resorted expropriation without first trying the other modes of acquisition
enumerated in § 10 of the law.
RA. No 7279 in pertinent parts provide:
SEC. 9. Priorities in the Acquisition of Land… Lands for socialized housing shall be acquired in
the following order:
(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies,
including government owned and controlled corporations and their subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declares Areas or Priority Development, Zone Improvement Program sites,
and Slum Improvement and Resettlement Programs sites which have not yet been acquired;
(e) Bagong Lipunan Improvement and Sites and Services or BLISS sites which have not yet been
acquired, and;
(f) Privately-owned lands.
Where on-site development is found more practicable and advantageously to the beneficiaries, the
priorities mentioned in this section shall not apply. The local government units shall give
budgetary priority on-site development of government lands.
SEC. 10. Modes of Lands Acquisition. -- The modes of acquiring lands for purposes of this Act
shall include, amount others, community mortgage, land swapping, land assembly or
consolidation, land banking, donation to the Government, joint-venture agreement, negotiated
purchase, and expropriation: Provided, however; That expropriation shall be resorted to only when
other modes of acquisition have been exhausted: Provided, further; That were expropriation is
resorted to, parcels of land owned by small property owners shall be exempted for purposes of this
Act: Provided finally, That abandoned property, as herein defined, shall be reverted and escheated
to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.
For the purpose of socialized housing, government-owned and foreclosed properties shall be
acquired by the local government units, or by the National Housing Authority primarily through
negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the lands
shall be given the right of first refusal.
Whether petitioner has complied with these provisions requires the presentation of evidence, although in its
amended complaint petitioner did allege that it had complied with the requirements. 23 The determination of
this question must await that hearing on the complaint for expropriation, particularly the hearing for the
condemnation of the properties sought to be expropriated. Expropriation proceedings consist of two stages:
first, condemnation of the property after it is determined that its acquisition will be for a public purpose or
public use and, second, the determination of just compensation to be paid for the taking of the private
property to be made by the court with the assistance of not more than three commissioners. 24
WHEREFORE, the decision, dated November 16,1999, and resolution, dated February 23, 2000, of the
Court of Appeals are REVERSED and the order of the trial court, dated December 15,1998, is
REINSTATED. This case is REMANDED to the trial court to further proceedings.1âwphi1.nêt
SO ORDERED.
389
 SECOND DIVISION
G.R. No. 106804 August 12, 2004
NATIONAL POWER CORPORATION, petitioner,
vs.
COURT OF APPEALS and ANTONINO POBRE, respondents.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review1 of the 30 March 1992 Decision2 and 14 August 1992 Resolution of the
Court of Appeals in CA-G.R. CV No. 16930. The Court of Appeals affirmed the Decision 3 of the Regional
Trial Court, Branch 17, Tabaco, Albay in Civil Case No. T-552.
The Antecedents
Petitioner National Power Corporation ("NPC") is a public corporation created to generate geothermal,
hydroelectric, nuclear and other power and to transmit electric power nationwide. 4 NPC is authorized by law
to acquire property and exercise the right of eminent domain.
Private respondent Antonino Pobre ("Pobre") is the owner of a 68,969 square-meter land ("Property")
located in Barangay Bano, Municipality of Tiwi, Albay. The Property is covered by TCT No. 4067 and
Subdivision Plan 11-9709.
In 1963, Pobre began developing the Property as a resort-subdivision, which he named as "Tiwi Hot Springs
Resort Subdivision." On 12 January 1966, the then Court of First Instance of Albay approved the
subdivision plan of the Property. The Register of Deeds thus cancelled TCT No. 4067 and issued
independent titles for the approved lots. In 1969, Pobre started advertising and selling the lots.
On 4 August 1965, the Commission on Volcanology certified that thermal mineral water and steam were
present beneath the Property. The Commission on Volcanology found the thermal mineral water and steam
suitable for domestic use and potentially for commercial or industrial use.
NPC then became involved with Pobre's Property in three instances.
First was on 18 February 1972 when Pobre leased to NPC for one year eleven lots from the approved
subdivision plan.
Second was sometime in 1977, the first time that NPC filed its expropriation case against Pobre to acquire
an 8,311.60 square-meter portion of the Property.5 On 23 October 1979, the trial court ordered the
expropriation of the lots upon NPC's payment of P25 per square meter or a total amount of P207,790. NPC
began drilling operations and construction of steam wells. While this first expropriation case was pending,
NPC dumped waste materials beyond the site agreed upon by NPC with Pobre. The dumping of waste
materials altered the topography of some portions of the Property. NPC did not act on Pobre's complaints
and NPC continued with its dumping.
Third was on 1 September 1979, when NPC filed its second expropriation case against Pobre to acquire an
additional 5,554 square meters of the Property. This is the subject of this petition. NPC needed the lot for the
construction and maintenance of Naglagbong Well Site F-20, pursuant to Proclamation No. 739 6 and
Republic Act No. 5092.7 NPC immediately deposited P5,546.36 with the Philippine National Bank. The
deposit represented 10% of the total market value of the lots covered by the second expropriation. On 6
September 1979, NPC entered the 5,554 square-meter lot upon the trial court's issuance of a writ of
possession to NPC.
On 10 December 1984, Pobre filed a motion to dismiss the second complaint for expropriation. Pobre
claimed that NPC damaged his Property. Pobre prayed for just compensation of all the lots affected by
NPC's actions and for the payment of damages.
390
On 2 January 1985, NPC filed a motion to dismiss the second expropriation case on the ground that NPC
had found an alternative site and that NPC had already abandoned in 1981 the project within the Property
due to Pobre's opposition.
On 8 January 1985, the trial court granted NPC's motion to dismiss but the trial court allowed Pobre to
adduce evidence on his claim for damages. The trial court admitted Pobre's exhibits on the damages because
NPC failed to object.
On 30 August 1985, the trial court ordered the case submitted for decision since NPC failed to appear to
present its evidence. The trial court denied NPC's motion to reconsider the submission of the case for
decision.
NPC filed a petition for certiorari8 with the then Intermediate Appellate Court, questioning the 30 August
1985 Order of the trial court. On 12 February 1987, the Intermediate Appellate Court dismissed NPC's
petition but directed the lower court to rule on NPC's objections to Pobre's documentary exhibits.
On 27 March 1987, the trial court admitted all of Pobre's exhibits and upheld its Order dated 30 August
1985. The trial court considered the case submitted for decision.
On 29 April 1987, the trial court issued its Decision in favor of Pobre. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the defendant and
against the plaintiff, ordering the plaintiff to pay unto the defendant:
(1) The sum of THREE MILLION FOUR HUNDRED FORTY EIGHT THOUSAND
FOUR HUNDRED FIFTY (P3,448,450.00) PESOS which is the fair market value of the
subdivision of defendant with an area of sixty eight thousand nine hundred sixty nine
(68,969) square meters, plus legal rate of interest per annum from September 6, 1979
until the whole amount is paid, and upon payment thereof by the plaintiff the defendant is
hereby ordered to execute the necessary Deed of Conveyance or Absolute Sale of the
property in favor of the plaintiff;
(2) The sum of ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS for and as
attorney's fees.
Costs against the plaintiff.
SO ORDERED.9
On 13 July 1987, NPC filed its motion for reconsideration of the decision. On 30 October 1987, the trial
court issued its Order denying NPC's motion for reconsideration.
NPC appealed to the Court of Appeals. On 30 March 1992, the Court of Appeals upheld the decision of the
trial court but deleted the award of attorney's fees. The dispositive portion of the decision reads:
WHEREFORE, by reason of the foregoing, the Decision appealed from is AFFIRMED with the
modification that the award of attorney's fees is deleted. No pronouncement as to costs.
SO ORDERED.10
The Court of Appeals denied NPC's motion for reconsideration in a Resolution dated 14 August 1992.
The Ruling of the Trial Court
In its 69-page decision, the trial court recounted in great detail the scale and scope of the damage NPC
inflicted on the Property that Pobre had developed into a resort-subdivision. Pobre's Property suffered
"permanent injury" because of the noise, water, air and land pollution generated by NPC's geothermal
plants. The construction and operation of the geothermal plants drastically changed the topography of the
Property making it no longer viable as a resort-subdivision. The chemicals emitted by the geothermal plants
damaged the natural resources in the Property and endangered the lives of the residents.
NPC did not only take the 8,311.60 square-meter portion of the Property, but also the remaining area of the
68,969 square-meter Property. NPC had rendered Pobre's entire Property useless as a resort-subdivision. The
Property has become useful only to NPC. NPC must therefore take Pobre's entire Property and pay for it.
The trial court found the following badges of NPC's bad faith: (1) NPC allowed five years to pass before it
moved for the dismissal of the second expropriation case; (2) NPC did not act on Pobre's plea for NPC to
eliminate or at least reduce the damage to the Property; and (3) NPC singled out Pobre's Property for
piecemeal expropriation when NPC could have expropriated other properties which were not affected in
their entirety by NPC's operation.
The trial court found the just compensation to be P50 per square meter or a total of P3,448,450 for Pobre's
68,969 square-meter Property. NPC failed to contest this valuation. Since NPC was in bad faith and it
employed dilatory tactics to prolong this case, the trial court imposed legal interest on the P3,448,450 from 6
September 1979 until full payment. The trial court awarded Pobre attorney's fees of P150,000.
The Ruling of the Court of Appeals
The Court of Appeals affirmed the decision of the trial court. However, the appellate court deleted the award
of attorney's fees because Pobre did not properly plead for it.
The Issues
NPC claims that the Court of Appeals committed the following errors that warrant reversal of the appellate
court's decision:
1. In not annulling the appealed Decision for having been rendered by the trial court with grave
abuse of discretion and without jurisdiction;
2. In holding that NPC had "taken" the entire Property of Pobre;
3. Assuming arguendo that there was "taking" of the entire Property, in not excluding from the
Property the 8,311.60 square-meter portion NPC had previously expropriated and paid for;
4. In holding that the amount of just compensation fixed by the trial court at P3,448,450.00 with
interest from September 6, 1979 until fully paid, is just and fair;
5. In not holding that the just compensation should be fixed at P25.00 per square meter only as
what NPC and Pobre had previously mutually agreed upon; and
6. In not totally setting aside the appealed Decision of the trial court. 11
Procedural Issues
NPC, represented by the Office of the Solicitor General, insists that at the time that it moved for the
dismissal of its complaint, Pobre had yet to serve an answer or a motion for summary judgment on NPC.
Thus, NPC as plaintiff had the right to move for the automatic dismissal of its complaint. NPC relies on
Section 1, Rule 17 of the 1964 Rules of Court, the Rules then in effect. NPC argues that the dismissal of the
complaint should have carried with it the dismissal of the entire case including Pobre's counterclaim.
NPC's belated attack on Pobre's claim for damages must fail. The trial court's reservation of Pobre's right to
recover damages in the same case is already beyond review. The 8 January 1985 Order of the trial court
attained finality when NPC failed to move for its reconsideration within the 15-day reglementary period.
NPC opposed the order only on 27 May 1985 or more than four months from the issuance of the order.
We cannot fault the Court of Appeals for not considering NPC's objections against the subsistence of Pobre's
claim for damages. NPC neither included this issue in its assignment of errors nor discussed it in its
appellant's brief. NPC also failed to question the trial court's 8 January 1985 Order in the petition for
certiorari12 it had earlier filed with the Court of Appeals. It is only before this Court that NPC now
vigorously assails the preservation of Pobre's claim for damages. Clearly, NPC's opposition to the existence
of Pobre's claim for damages is a mere afterthought. Rules of fair play, justice and due process dictate that
parties cannot raise an issue for the first time on appeal.13
We must correct NPC's claim that it filed the notice of dismissal just "shortly" after it had filed the
complaint for expropriation. While NPC had intimated several times to the trial court its desire to dismiss
the expropriation case it filed on 5 September 1979,14 it was only on 2 January 1985 that NPC filed its notice
of dismissal.15 It took NPC more than five years to actually file the notice of dismissal. Five years is
definitely not a short period of time. NPC obviously dilly-dallied in filing its notice of dismissal while NPC
meanwhile burdened Pobre's property rights.
Even a timely opposition against Pobre's claim for damages would not yield a favorable ruling for NPC. It is
not Section 1, Rule 17 of the 1964 Rules of Court that is applicable to this case but Rule 67 of the same
391
Rules, as well as jurisprudence on expropriation cases. Rule 17 referred to dismissal of civil actions in
general while Rule 67 specifically governed eminent domain cases.
Eminent domain is the authority and right of the state, as sovereign, to take private property for public use
upon observance of due process of law and payment of just compensation. 16 The power of eminent domain
may be validly delegated to the local governments, other public entities and public utilities17 such as NPC.
Expropriation is the procedure for enforcing the right of eminent domain. 18 "Eminent Domain" was the
former title of Rule 67 of the 1964 Rules of Court. In the 1997 Rules of Civil Procedure, which took effect
on 1 July 1997, the prescribed method of expropriation is still found in Rule 67, but its title is now
"Expropriation."
Section 1, Rule 17 of the 1964 Rules of Court provided the exception to the general rule that the dismissal of
the complaint is addressed to the sound discretion of the court. 19 For as long as all of the elements of Section
1, Rule 17 were present the dismissal of the complaint rested exclusively on the plaintiff's will. 20 The
defending party and even the courts were powerless to prevent the dismissal. 21 The courts could only accept
and record the dismissal.22
A plain reading of Section 1, Rule 17 of the 1964 Rules of Court makes it obvious that this rule was not
intended to supplement Rule 67 of the same Rules. Section 1, Rule 17 of the 1964 Rules of Court, provided
that:
SECTION 1. Dismissal by the plaintiff. — An action may be dismissed by the plaintiff without
order of court by filing a notice of dismissal at any time before service of the answer or of a motion
for summary judgment. Unless otherwise stated in the notice, the dismissal is without prejudice,
except that a notice operates as an adjudication upon the merits when filed by a plaintiff who has
once dismissed in a competent court an action based on or including the same claim. A class suit
shall not be dismissed or compromised without approval of the court.
While Section 1, Rule 17 spoke of the "service of answer or summary judgment," the Rules then did not
require the filing of an answer or summary judgment in eminent domain cases. 23 In lieu of an answer,
Section 3 of Rule 67 required the defendant to file a single motion to dismiss where he should present all of
his objections and defenses to the taking of his property for the purpose specified in the complaint. 24 In
short, in expropriation cases under Section 3 of Rule 67, the motion to dismiss took the place of the answer.
The records show that Pobre had already filed and served on NPC his "motion to dismiss/answer"25 even
before NPC filed its own motion to dismiss. NPC filed its notice of dismissal of the complaint on 2 January
1985. However, as early as 10 December 1984, Pobre had already filed with the trial court and served on
NPC his "motion to dismiss/answer." A certain Divina Cerela received Pobre's pleading on behalf of
NPC.26 Unfortunately for NPC, even Section 1, Rule 17 of the 1964 Rules of Court could not save its cause.
NPC is in no position to invoke Section 1, Rule 17 of the 1964 Rules of Court. A plaintiff loses his right
under this rule to move for the immediate dismissal of the complaint once the defendant had served on the
plaintiff the answer or a motion for summary judgment before the plaintiff could file his notice of dismissal
of the complaint.27 Pobre's "motion to dismiss/answer," filed and served way ahead of NPC's motion to
dismiss, takes the case out of Section 1, Rule 17 assuming the same applies.
In expropriation cases, there is no such thing as the plaintiff's matter of right to dismiss the complaint
precisely because the landowner may have already suffered damages at the start of the taking. The plaintiff's
right in expropriation cases to dismiss the complaint has always been subject to court approval and to certain
conditions.28The exceptional right that Section 1, Rule 17 of the 1964 Rules of Court conferred on the
plaintiff must be understood to have applied only to other civil actions. The 1997 Rules of Civil Procedure
abrogated this exceptional right.29
The power of eminent domain is subject to limitations. A landowner cannot be deprived of his right over his
land until expropriation proceedings are instituted in court. 30 The court must then see to it that the taking is
for public use, there is payment of just compensation and there is due process of law.31
If the propriety of the taking of private property through eminent domain is subject to judicial scrutiny, the
dismissal of the complaint must also pass judicial inquiry because private rights may have suffered in the
meantime. The dismissal, withdrawal or abandonment of the expropriation case cannot be made arbitrarily.
If it appears to the court that the expropriation is not for some public use, 32 then it becomes the duty of the
court to dismiss the action.33However, when the defendant claims that his land suffered damage because of
the expropriation, the dismissal of the action should not foreclose the defendant's right to have his damages
ascertained either in the same case or in a separate action.34
Thus, NPC's theory that the dismissal of its complaint carried with it the dismissal of Pobre's claim for
damages is baseless. There is nothing in Rule 67 of the 1964 Rules of Court that provided for the dismissal
of the defendant's claim for damages, upon the dismissal of the expropriation case. Case law holds that in
the event of dismissal of the expropriation case, the claim for damages may be made either in a separate or
in the same action, for all damages occasioned by the institution of the expropriation case. 35 The dismissal of
the complaint can be made under certain conditions, such as the reservation of the defendant's right to
recover damages either in the same or in another action.36 The trial court in this case reserved Pobre's right to
prove his claim in the same case, a reservation that has become final due to NPC's own fault.
Factual Findings of the Trial and Appellate Courts Bind the Court
The trial and appellate courts held that even before the first expropriation case, Pobre had already
established his Property as a resort-subdivision. NPC had wrought so much damage to the Property that
NPC had made the Property uninhabitable as a resort-subdivision. NPC's facilities such as steam wells, nag
wells, power plants, power lines, and canals had hemmed in Pobre's Property. NPC's operations of its
geothermal project also posed a risk to lives and properties.
We uphold the factual findings of the trial and appellate courts. Questions of facts are beyond the pale of
Rule 45 of the Rules of Court as a petition for review may only raise questions of law. 37 Moreover, factual
findings of the trial court, particularly when affirmed by the Court of Appeals, are generally binding on this
Court.38 We thus find no reason to set aside the two courts' factual findings.
NPC points out that it did not take Pobre's 68,969 square-meter Property. NPC argues that assuming that it is
liable for damages, the 8,311.60 square-meter portion that it had successfully expropriated and fully paid for
should have been excluded from the 68,969 square-meter Property that Pobre claims NPC had damaged.
We are not persuaded.
In its 30 October 1987 Order denying NPC's motion for reconsideration, the trial court pointed out that the
Property originally had a total area of 141,300 square meters. 39 Pobre converted the Property into a resort-
subdivision and sold lots to the public. What remained of the lots are the 68,969 square meters of
land.40 Pobre no longer claimed damages for the other lots that he had before the expropriation.
Pobre identified in court the lots forming the 68,969 square-meter Property. NPC had the opportunity to
object to the identification of the lots.41 NPC, however, failed to do so. Thus, we do not disturb the trial and
appellate courts' finding on the total land area NPC had damaged.
NPC must Pay Just Compensation for the Entire Property
Ordinarily, the dismissal of the expropriation case restores possession of the expropriated land to the
landowner.42However, when possession of the land cannot be turned over to the landowner because it is
neither convenient nor feasible anymore to do so, the only remedy available to the aggrieved landowner is to
demand payment of just compensation.43
In this case, we agree with the trial and appellate courts that it is no longer possible and practical to restore
possession of the Property to Pobre. The Property is no longer habitable as a resort-subdivision. The
Property is worthless to Pobre and is now useful only to NPC. Pobre has completely lost the Property as if
NPC had physically taken over the entire 68,969 square-meter Property.
In United States v. Causby,44 the U.S. Supreme Court ruled that when private property is rendered
uninhabitable by an entity with the power to exercise eminent domain, the taking is deemed complete. Such
taking is thus compensable.
In this jurisdiction, the Court has ruled that if the government takes property without expropriation and
devotes the property to public use, after many years the property owner may demand payment of just
392
compensation.45 This principle is in accord with the constitutional mandate that private property shall not be
taken for public use without just compensation.46
In the recent case of National Housing Authority v. Heirs of Isidro Guivelondo,47 the Court compelled the
National Housing Authority ("NHA") to pay just compensation to the landowners even after the NHA had
already abandoned the expropriation case. The Court pointed out that a government agency could not initiate
expropriation proceedings, seize a person's property, and then just decide not to proceed with the
expropriation. Such a complete turn-around is arbitrary and capricious and was condemned by the Court in
the strongest possible terms. NHA was held liable to the landowners for the prejudice that they had suffered.
In this case, NPC appropriated Pobre's Property without resort to expropriation proceedings. NPC dismissed
its own complaint for the second expropriation. At no point did NPC institute expropriation proceedings for
the lots outside the 5,554 square-meter portion subject of the second expropriation. The only issues that the
trial court had to settle were the amount of just compensation and damages that NPC had to pay Pobre.
This case ceased to be an action for expropriation when NPC dismissed its complaint for expropriation.
Since this case has been reduced to a simple case of recovery of damages, the provisions of the Rules of
Court on the ascertainment of the just compensation to be paid were no longer applicable. A trial before
commissioners, for instance, was dispensable.
We have held that the usual procedure in the determination of just compensation is waived when the
government itself initially violates procedural requirements.48 NPC's taking of Pobre's property without
filing the appropriate expropriation proceedings and paying him just compensation is a transgression of
procedural due process.
From the beginning, NPC should have initiated expropriation proceedings for Pobre's entire 68,969 square-
meter Property. NPC did not. Instead, NPC embarked on a piecemeal expropriation of the Property. Even as
the second expropriation case was still pending, NPC was well aware of the damage that it had unleashed on
the entire Property. NPC, however, remained impervious to Pobre's repeated demands for NPC to abate the
damage that it had wrought on his Property.
NPC moved for the dismissal of the complaint for the second expropriation on the ground that it had found
an alternative site and there was stiff opposition from Pobre. 49 NPC abandoned the second expropriation
case five years after it had already deprived the Property virtually of all its value. NPC has demonstrated its
utter disregard for Pobre's property rights.
Thus, it would now be futile to compel NPC to institute expropriation proceedings to determine the just
compensation for Pobre's 68,969 square-meter Property. Pobre must be spared any further delay in his
pursuit to receive just compensation from NPC.
Just compensation is the fair and full equivalent of the loss.50 The trial and appellate courts endeavored to
meet this standard. The P50 per square meter valuation of the 68,969 square-meter Property is reasonable
considering that the Property was already an established resort-subdivision. NPC has itself to blame for not
contesting the valuation before the trial court. Based on the P50 per square meter valuation, the total amount
of just compensation that NPC must pay Pobre is P3,448,450.
The landowner is entitled to legal interest on the price of the land from the time of the taking up to the time
of full payment by the government.51 In accord with jurisprudence, we fix the legal interest at six per cent
(6%) per annum.52 The legal interest should accrue from 6 September 1979, the date when the trial court
issued the writ of possession to NPC, up to the time that NPC fully pays Pobre. 53
NPC's abuse of its eminent domain authority is appalling. However, we cannot award moral damages
because Pobre did not assert his right to it.54 We also cannot award attorney's fees in Pobre's favor since he
did not appeal from the decision of the Court of Appeals denying recovery of attorney's fees. 55
Nonetheless, we find it proper to award P50,000 in temperate damages to Pobre. The court may award
temperate or moderate damages, which are more than nominal but less than compensatory damages, if the
court finds that a party has suffered some pecuniary loss but its amount cannot be proved with certainty
from the nature of the case.56As the trial and appellate courts noted, Pobre's resort-subdivision was no longer
just a dream because Pobre had already established the resort-subdivision and the prospect for it was
initially encouraging. That is, until NPC permanently damaged Pobre's Property. NPC did not just destroy
the property. NPC dashed Pobre's hope of seeing his Property achieve its full potential as a resort-
subdivision.
The lesson in this case must not be lost on entities with eminent domain authority. Such entities cannot trifle
with a citizen's property rights. The power of eminent domain is an extraordinary power they must wield
with circumspection and utmost regard for procedural requirements. Thus, we hold NPC liable for
exemplary damages of P100,000. Exemplary damages or corrective damages are imposed, by way of
example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory
damages.57
WHEREFORE, we DENY the petition for lack of merit. The appealed Decision of the Court of Appeals
dated 30 March 1992 in CA-G.R. CV No. 16930 is AFFIRMED with MODIFICATION. National Power
Corporation is ordered to pay Antonino Pobre P3,448,450 as just compensation for the 68,969 square-meter
Property at P50 per square meter. National Power Corporation is directed to pay legal interest at 6% per
annum on the amount adjudged from 6 September 1979 until fully paid. Upon National Power Corporation's
payment of the full amount, Antonino Pobre is ordered to execute a Deed of Conveyance of the Property in
National Power Corporation's favor. National Power Corporation is further ordered to pay temperate and
exemplary damages of P50,000 and P100,000, respectively. No costs.
SO ORDERED.

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 SECOND DIVISION
G.R. No. 160656 June 15, 2007
REPUBLIC OF THE PHILIPPINES (Department of Public Works and Highways), petitioner,
vs.
ISMAEL ANDAYA, respondent.
DECISION
QUISUMBING, J.:
This is a petition for review of the Decision1 dated October 30, 2003 of the Court of Appeals in CA-G.R.
CV No. 65066 affirming with modification the Decision2 of the Regional Trial Court of Butuan City,
Branch 33 in Civil Case No. 4378, for enforcement of easement of right-of-way (or eminent domain).
Respondent Ismael Andaya is the registered owner of two parcels of land in Bading, Butuan City. His
ownership is evidenced by Transfer Certificates of Title Nos. RT-10225 and RT-10646. These properties are
subject to a 60-meter wide perpetual easement for public highways, irrigation ditches, aqueducts, and other
similar works of the government or public enterprise, at no cost to the government, except only the value of
the improvements existing thereon that may be affected.
Petitioner Republic of the Philippines (Republic) negotiated with Andaya to enforce the 60-meter easement
of right-of-way. The easement was for concrete levees and floodwalls for Phase 1, Stage 1 of the Lower
Agusan Development Project. The parties, however, failed to reach an agreement.
On December 13, 1995, the Republic instituted an action before the Regional Trial Court of Butuan City to
enforce the easement of right-of-way or eminent domain. The trial court issued a writ of possession on April
26, 1996.3 It also constituted a Board of Commissioners (Board) to determine the just compensation.
Eventually, the trial court issued an Order of Expropriation upon payment of just compensation. 4 Later, the
Board reported that there was a discrepancy in the description of the property sought to be expropriated. The
Republic thus amended its complaint, reducing the 60-meter easement to 10 meters, or an equivalent of 701
square meters.
On December 10, 1998, the Board reported that the project would affect a total of 10,380 square meters of
Andaya’s properties, 4,443 square meters of which will be for the 60-meter easement. The Board also
reported that the easement would diminish the value of the remaining 5,937 square meters. As a result, it
recommended the payment of consequential damages amounting to ₱2,820,430 for the remaining area. 5
Andaya objected to the report because although the Republic reduced the easement to 10 meters or an
equivalent of 701 square meters, the Board still granted it 4,443 square meters. He contended that the
consequential damages should be based on the remaining area of 9,679 square meters. Thus, the just
compensation should be ₱11,373,405. The Republic did not file any comment, opposition, nor objection.
After considering the Board’s report, the trial court decreed on April 29, 1999, as follows:
WHEREFORE, in the light of the foregoing, the Court decides as follows:
a) That the plaintiff is legally entitled to its inherent right of expropriation to, viz.: 1) the lot now known as
lot 3291-B-1-A, portion of lot 3291-B-1, (LRC) Psd-255693, covered by TCT No. RT-10225, with an area
of 288 sq. m.; and 2) the lot now known as lot 3293-F-5-B-1, portion of lot 3293-F-5-B (LRC) Psd-230236,
covered by TCT No. RT-10646, with an area of 413 sq. m., both of the Butuan City Registry of Deeds, it
being shown that it is for public use and purpose --- free of charge by reason of the statutory lien of
easement of right-of-way imposed on defendant’s titles;
b) That however, the plaintiff is obligated to pay defendant the sum of TWO MILLION EIGHT HUNDRED
TWENTY THOUSAND FOUR HUNDRED THIRTY (P2,820,430.00) PESOS as fair and reasonable
severance damages;
c) To pay members of the Board of Commissioners, thus: for the chairman --- TWENTY THOUSAND
(P20,000.00) PESOS and the two (2) members at FIFTEEN THOUSAND (P15,000.00) PESOS each;
d) To pay defendant’s counsel FIFTY THOUSAND (P50,000.00) PESOS as Attorney’s fees; and finally,
394
e) That the Registry of Deeds of Butuan City is also directed to effect the issuance of Transfer Certificate of
Titles for the aforementioned two (2) lots in the name of the Republic of the Philippines, following the
technical description as appearing in pages 6, 7, and 8 of the Commissioner’s Report.
NO COSTS.
IT IS SO ORDERED.6
Both parties appealed to the Court of Appeals. The Republic contested the awards of severance damages and
attorney’s fees while Andaya demanded just compensation for his entire property minus the easement.
Andaya alleged that the easement would prevent ingress and egress to his property and turn it into a catch
basin for the floodwaters coming from the Agusan River. As a result, his entire property would be rendered
unusable and uninhabitable. He thus demanded ₱11,373,405 as just compensation based on the total
compensable area of 9,679 square meters.
The Court of Appeals modified the trial court’s decision by imposing a 6% interest on the consequential
damages from the date of the writ of possession or the actual taking, and by deleting the attorney’s fees.
Hence, the instant petition. Simply put, the sole issue for resolution may be stated thus: Is the Republic
liable for just compensation if in enforcing the legal easement of right-of-way on a property, the remaining
area would be rendered unusable and uninhabitable?
It is undisputed that there is a legal easement of right-of-way in favor of the Republic. Andaya’s transfer
certificates of title7 contained the reservation that the lands covered thereby are subject to the provisions of
the Land Registration Act8 and the Public Land Act.9 Section 11210 of the Public Land Act provides that
lands granted by patent shall be subject to a right-of-way not exceeding 60 meters in width for public
highways, irrigation ditches, aqueducts, and other similar works of the government or any public enterprise,
free of charge, except only for the value of the improvements existing thereon that may be affected. In view
of this, the Court of Appeals declared that all the Republic needs to do is to enforce such right without
having to initiate expropriation proceedings and without having to pay any just compensation.11 Hence, the
Republic may appropriate the 701 square meters necessary for the construction of the floodwalls without
paying for it.
We are, however, unable to sustain the Republic’s argument that it is not liable to pay consequential
damages if in enforcing the legal easement on Andaya’s property, the remaining area would be rendered
unusable and uninhabitable. "Taking," in the exercise of the power of eminent domain, occurs not only when
the government actually deprives or dispossesses the property owner of his property or of its ordinary use,
but also when there is a practical destruction or material impairment of the value of his property.12 Using
this standard, there was undoubtedly a taking of the remaining area of Andaya’s property. True, no burden
was imposed thereon and Andaya still retained title and possession of the property. But, as correctly
observed by the Board and affirmed by the courts a quo, the nature and the effect of the floodwalls would
deprive Andaya of the normal use of the remaining areas. It would prevent ingress and egress to the property
and turn it into a catch basin for the floodwaters coming from the Agusan River.
For this reason, in our view, Andaya is entitled to payment of just compensation, which must be neither
more nor less than the monetary equivalent of the land.13 One of the basic principles enshrined in our
Constitution is that no person shall be deprived of his private property without due process of law; and in
expropriation cases, an essential element of due process is that there must be just compensation whenever
private property is taken for public use. Noteworthy, Section 9, Article III of our Constitution mandates that
private property shall not be taken for public use without just compensation. 14
Finally, we affirm the findings of the Court of Appeals and the trial court that just compensation should be
paid only for 5,937 square meters of the total area of 10,380 square meters. Admittedly, the Republic needs
only a 10-meter easement or an equivalent of 701 square meters. Yet, it is also settled that it is legally
entitled to a 60-meter wide easement or an equivalent of 4,443 square meters. Clearly, although the Republic
will use only 701 square meters, it should not be liable for the 3,742 square meters, which constitute the
difference between this area of 701 square meters and the 4,443 square meters to which it is fully entitled to
use as easement, free of charge except for damages to affected existing improvements, if any, under Section
112 of the Public Land Act.
In effect, without such damages alleged and proved, the Republic is liable for just compensation of only the
remaining areas consisting of 5,937 square meters, with interest thereon at the legal rate of 6% per annum
from the date of the writ of possession or the actual taking until full payment is made. For the purpose of
determining the final just compensation, the case is remanded to the trial court. Said court is ordered to
make the determination of just compensation payable to respondent Andaya with deliberate dispatch.
WHEREFORE, the Decision of the Court of Appeals dated October 30, 2003 in CA-G.R. CV No. 65066,
modifying the Decision of the Regional Trial Court of Butuan City, Branch 33 in Civil Case No. 4378, is
AFFIRMED with MODIFICATION as herein set forth.
The case is hereby REMANDED to the Regional Trial Court of Butuan City, Branch 33 for the
determination of the final just compensation of the compensable area consisting of 5,937 square meters, with
interest thereon at the legal rate of 6% per annum from the date of the writ of possession or actual taking
until fully paid.
No pronouncement as to costs.
SO ORDERED.

395
 EN BANC
G.R. No. 169914 April 18, 2008
ASIA'S EMERGING DRAGON CORPORATION, petitioner,
vs.
DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY LEANDRO R.
MENDOZA and MANILA INTERNATIONAL AIRPORT AUTHORITY, respondents.
x ----------------------------------------- x
G.R. No. 174166 April 18, 2008
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS and MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner,
vs.
HON. COURT OF APPEALS and SALACNIB BATERINA, respondents.
DECISION
CHICO-NAZARIO, J.:
This Court is still continuously besieged by Petitions arising from the awarding of the Ninoy Aquino
International Airport International Passenger Terminal III (NAIA IPT III) Project to the Philippine
International Air Terminals Co., Inc. (PIATCO), despite the promulgation by this Court of Decisions and
Resolutions in two cases, Agan, Jr. v. Philippine International Air Terminals Co., Inc. 1 and Republic v.
Gingoyon,2 which already resolved the more basic and immediate issues arising from the said award. The
sheer magnitude of the project, the substantial cost of its building, the expected high profits from its
operations, and its remarkable impact on the Philippine economy, consequently raised significant interest in
the project from various quarters.
Once more, two new Petitions concerning the NAIA IPT III Project are before this Court. It is only
appropriate, however, that the Court first recounts its factual and legal findings in Agan and Gingoyon to
ascertain that its ruling in the Petitions at bar shall be consistent and in accordance therewith.
Agan, Jr. v. Philippine International Air Terminals Co., Inc. (G.R. Nos. 155001, 155547, and 155661)
Already established and incontrovertible are the following facts in Agan:
In August 1989, the [Department of Trade and Communications (DOTC)] engaged the services of
Aeroport de Paris (ADP) to conduct a comprehensive study of the Ninoy Aquino International
Airport (NAIA) and determine whether the present airport can cope with the traffic development
up to the year 2010. The study consisted of two parts: first, traffic forecasts, capacity of existing
facilities, NAIA future requirements, proposed master plans and development plans; and second,
presentation of the preliminary design of the passenger terminal building. The ADP submitted a
Draft Final Report to the DOTC in December 1989.
Some time in 1993, six business leaders consisting of John Gokongwei, Andrew Gotianun, Henry
Sy, Sr., Lucio Tan, George Ty and Alfonso Yuchengco met with then President Fidel V. Ramos to
explore the possibility of investing in the construction and operation of a new international airport
terminal. To signify their commitment to pursue the project, they formed the Asia's Emerging
Dragon Corp. (AEDC) which was registered with the Securities and Exchange Commission (SEC)
on September 15, 1993.
On October 5, 1994, AEDC submitted an unsolicited proposal to the Government through the
DOTC/[Manila International Airport Authority (MIAA)] for the development of NAIA
International Passenger Terminal III (NAIA IPT III) under a build-operate-and-transfer
arrangement pursuant to RA 6957 as amended by RA 7718 (BOT Law).
On December 2, 1994, the DOTC issued Dept. Order No. 94-832 constituting the Prequalification
Bids and Awards Committee (PBAC) for the implementation of the NAIA IPT III project.
On March 27, 1995, then DOTC Secretary Jose Garcia endorsed the proposal of AEDC to the
National Economic and Development Authority (NEDA). A revised proposal, however, was
forwarded by the DOTC to NEDA on December 13, 1995. On January 5, 1996, the NEDA
396
Investment Coordinating Council (NEDA ICC) - Technical Board favorably endorsed the project
to the ICC - Cabinet Committee which approved the same, subject to certain conditions, on
January 19, 1996. On February 13, 1996, the NEDA passed Board Resolution No. 2 which
approved the NAIA IPT III project.
On June 7, 14, and 21, 1996, DOTC/MIAA caused the publication in two daily newspapers of an
invitation for competitive or comparative proposals on AEDC's unsolicited proposal, in accordance
with Sec. 4-A of RA 6957, as amended. The alternative bidders were required to submit three (3)
sealed envelopes on or before 5:00 p.m. of September 20, 1996. The first envelope should contain
the Prequalification Documents, the second envelope the Technical Proposal, and the third
envelope the Financial Proposal of the proponent.
On June 20, 1996, PBAC Bulletin No. 1 was issued, postponing the availment of the Bid
Documents and the submission of the comparative bid proposals. Interested firms were permitted
to obtain the Request for Proposal Documents beginning June 28, 1996, upon submission of a
written application and payment of a non-refundable fee of P50,000.00 (US$2,000).
The Bid Documents issued by the PBAC provided among others that the proponent must have
adequate capability to sustain the financing requirement for the detailed engineering, design,
construction, operation, and maintenance phases of the project. The proponent would be evaluated
based on its ability to provide a minimum amount of equity to the project, and its capacity to
secure external financing for the project.
On July 23, 1996, the PBAC issued PBAC Bulletin No. 2 inviting all bidders to a pre-bid
conference on July 29, 1996.
On August 16, 1996, the PBAC issued PBAC Bulletin No. 3 amending the Bid Documents. The
following amendments were made on the Bid Documents:
a. Aside from the fixed Annual Guaranteed Payment, the proponent shall include in its
financial proposal an additional percentage of gross revenue share of the Government, as
follows:
i. First 5 years 5.0%
ii. Next 10 years 7.5%
iii. Next 10 years 10.0%
b. The amount of the fixed Annual Guaranteed Payment shall be subject of the price
challenge. Proponent may offer an Annual Guaranteed Payment which need not be of
equal amount, but payment of which shall start upon site possession.
c. The project proponent must have adequate capability to sustain the financing
requirement for the detailed engineering, design, construction, and/or operation and
maintenance phases of the project as the case may be. For purposes of pre-qualification,
this capability shall be measured in terms of:
i. Proof of the availability of the project proponent and/or the consortium to
provide the minimum amount of equity for the project; and
ii. a letter testimonial from reputable banks attesting that the project proponent
and/or the members of the consortium are banking with them, that the project
proponent and/or the members are of good financial standing, and have
adequate resources.
d. The basis for the prequalification shall be the proponent's compliance with the
minimum technical and financial requirements provided in the Bid Documents and the
[Implementing Rules and Regulations (IRR)] of the BOT Law. The minimum amount of
equity shall be 30% of the Project Cost.
 e. Amendments to the draft Concession Agreement shall be issued from time to time.
Said amendments shall only cover items that would not materially affect the preparation
of the proponent's proposal.
On August 29, 1996, the Second Pre-Bid Conference was held where certain clarifications were
made. Upon the request of prospective bidder People's Air Cargo & Warehousing Co., Inc
(Paircargo), the PBAC warranted that based on Sec. 11.6, Rule 11 of the Implementing Rules and
Regulations of the BOT Law, only the proposed Annual Guaranteed Payment submitted by the
challengers would be revealed to AEDC, and that the challengers' technical and financial proposals
would remain confidential. The PBAC also clarified that the list of revenue sources contained in
Annex 4.2a of the Bid Documents was merely indicative and that other revenue sources may be
included by the proponent, subject to approval by DOTC/MIAA. Furthermore, the PBAC clarified
that only those fees and charges denominated as Public Utility Fees would be subject to regulation,
and those charges which would be actually deemed Public Utility Fees could still be revised,
depending on the outcome of PBAC's query on the matter with the Department of Justice.
In September 1996, the PBAC issued Bid Bulletin No. 5, entitled "Answers to the Queries of
PAIRCARGO as Per Letter Dated September 3 and 10, 1996." Paircargo's queries and the PBAC's
responses were as follows:
1. It is difficult for Paircargo and Associates to meet the required minimum equity
requirement as prescribed in Section 8.3.4 of the Bid Documents considering that the
capitalization of each member company is so structured to meet the requirements and
needs of their current respective business undertaking/activities. In order to comply with
this equity requirement, Paircargo is requesting PBAC to just allow each member of (sic)
corporation of the Joint Venture to just execute an agreement that embodies a
commitment to infuse the required capital in case the project is awarded to the Joint
Venture instead of increasing each corporation's current authorized capital stock just for
prequalification purposes.
In prequalification, the agency is interested in one's financial capability at the time of
prequalification, not future or potential capability.
A commitment to put up equity once awarded the project is not enough to establish that
"present" financial capability. However, total financial capability of all member
companies of the Consortium, to be established by submitting the respective companies'
audited financial statements, shall be acceptable.
2. At present, Paircargo is negotiating with banks and other institutions for the extension
of a Performance Security to the joint venture in the event that the Concessions
Agreement (sic) is awarded to them. However, Paircargo is being required to submit a
copy of the draft concession as one of the documentary requirements. Therefore,
Paircargo is requesting that they'd (sic) be furnished copy of the approved negotiated
agreement between the PBAC and the AEDC at the soonest possible time.
A copy of the draft Concession Agreement is included in the Bid Documents. Any
material changes would be made known to prospective challengers through bid bulletins.
However, a final version will be issued before the award of contract.
The PBAC also stated that it would require AEDC to sign Supplement C of the Bid Documents
(Acceptance of Criteria and Waiver of Rights to Enjoin Project) and to submit the same with the
required Bid Security.
On September 20, 1996, the consortium composed of People's Air Cargo and Warehousing Co.,
Inc. (Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and Security Bank Corp. (Security
Bank) (collectively, Paircargo Consortium) submitted their competitive proposal to the PBAC. On
September 23, 1996, the PBAC opened the first envelope containing the prequalification
397
documents of the Paircargo Consortium. On the following day, September 24, 1996, the PBAC
prequalified the Paircargo Consortium.
On September 26, 1996, AEDC informed the PBAC in writing of its reservations as regards the
Paircargo Consortium, which include:
a. The lack of corporate approvals and financial capability of PAIRCARGO;
b. The lack of corporate approvals and financial capability of PAGS;
c. The prohibition imposed by RA 337, as amended (the General Banking Act) on the
amount that Security Bank could legally invest in the project;
d. The inclusion of Siemens as a contractor of the PAIRCARGO Joint Venture, for
prequalification purposes; and
e. The appointment of Lufthansa as the facility operator, in view of the Philippine
requirement in the operation of a public utility.
The PBAC gave its reply on October 2, 1996, informing AEDC that it had considered the issues
raised by the latter, and that based on the documents submitted by Paircargo and the established
prequalification criteria, the PBAC had found that the challenger, Paircargo, had prequalified to
undertake the project. The Secretary of the DOTC approved the finding of the PBAC.
The PBAC then proceeded with the opening of the second envelope of the Paircargo Consortium
which contained its Technical Proposal.
On October 3, 1996, AEDC reiterated its objections, particularly with respect to Paircargo's
financial capability, in view of the restrictions imposed by Section 21-B of the General Banking
Act and Sections 1380 and 1381 of the Manual Regulations for Banks and Other Financial
Intermediaries. On October 7, 1996, AEDC again manifested its objections and requested that it be
furnished with excerpts of the PBAC meeting and the accompanying technical evaluation report
where each of the issues they raised were addressed.
On October 16, 1996, the PBAC opened the third envelope submitted by AEDC and the Paircargo
Consortium containing their respective financial proposals. Both proponents offered to build the
NAIA Passenger Terminal III for at least $350 million at no cost to the government and to pay the
government: 5% share in gross revenues for the first five years of operation, 7.5% share in gross
revenues for the next ten years of operation, and 10% share in gross revenues for the last ten years
of operation, in accordance with the Bid Documents. However, in addition to the foregoing, AEDC
offered to pay the government a total of P135 million as guaranteed payment for 27 years while
Paircargo Consortium offered to pay the government a total of P17.75 billion for the same period.
Thus, the PBAC formally informed AEDC that it had accepted the price proposal submitted by the
Paircargo Consortium, and gave AEDC 30 working days or until November 28, 1996 within which
to match the said bid, otherwise, the project would be awarded to Paircargo.
As AEDC failed to match the proposal within the 30-day period, then DOTC Secretary Amado
Lagdameo, on December 11, 1996, issued a notice to Paircargo Consortium regarding AEDC's
failure to match the proposal.
On February 27, 1997, Paircargo Consortium incorporated into Philippine International Airport
Terminals Co., Inc. (PIATCO).
AEDC subsequently protested the alleged undue preference given to PIATCO and reiterated its
objections as regards the prequalification of PIATCO.
On April 11, 1997, the DOTC submitted the concession agreement for the second-pass approval of
the NEDA-ICC.
On April 16, 1997, AEDC filed with the Regional Trial Court of Pasig a Petition for Declaration of
Nullity of the Proceedings, Mandamus and Injunction against the Secretary of the DOTC, the
Chairman of the PBAC, the voting members of the PBAC and Pantaleon D. Alvarez, in his
capacity as Chairman of the PBAC Technical Committee.
xxxx
 On July 9, 1997, the DOTC issued the notice of award for the project to PIATCO.
On July 12, 1997, the Government, through then DOTC Secretary Arturo T. Enrile, and PIATCO,
through its President, Henry T. Go, signed the "Concession Agreement for the Build-Operate-and-
Transfer Arrangement of the Ninoy Aquino International Airport Passenger Terminal III" (1997
Concession Agreement). x x x.
On November 26, 1998, the Government and PIATCO signed an Amended and Restated
Concession Agreement (ARCA). x x x.
Subsequently, the Government and PIATCO signed three Supplements to the ARCA. The First
Supplement was signed on August 27, 1999; the Second Supplement on September 4, 2000; and
the Third Supplement on June 22, 2001 (collectively, Supplements).
xxxx
Meanwhile, the MIAA which is charged with the maintenance and operation of the NAIA
Terminals I and II, had existing concession contracts with various service providers to offer
international airline airport services, such as in-flight catering, passenger handling, ramp and
ground support, aircraft maintenance and provisions, cargo handling and warehousing, and other
services, to several international airlines at the NAIA. x x x.
On September 17, 2002, the workers of the international airline service providers, claiming that
they stand to lose their employment upon the implementation of the questioned agreements, filed
before this Court a petition for prohibition to enjoin the enforcement of said agreements.
On October 15, 2002, the service providers, joining the cause of the petitioning workers, filed a
motion for intervention and a petition-in-intervention.
On October 24, 2002, Congressmen Salacnib Baterina, Clavel Martinez and Constantino Jaraula
filed a similar petition with this Court.
On November 6, 2002, several employees of the MIAA likewise filed a petition assailing the
legality of the various agreements.
On December 11, 2002, another group of Congressmen, Hon. Jacinto V. Paras, Rafael P. Nantes,
Eduardo C. Zialcita, Willie B. Villarama, Prospero C. Nograles, Prospero A. Pichay, Jr., Harlin
Cast Abayon and Benasing O. Macaranbon, moved to intervene in the case as Respondents-
Intervenors. They filed their Comment-In-Intervention defending the validity of the assailed
agreements and praying for the dismissal of the petitions.
During the pendency of the case before this Court, President Gloria Macapagal Arroyo, on
November 29, 2002, in her speech at the 2002 Golden Shell Export Awards at Malacañang Palace,
stated that she will not "honor (PIATCO) contracts which the Executive Branch's legal offices
have concluded (as) null and void."3
The Court first dispensed with the procedural issues raised in Agan, ruling that (a) the MIAA service
providers and its employees, petitioners in G.R. Nos. 155001 and 155661, had the requisite standing since
they had a direct and substantial interest to protect by reason of the implementation of the PIATCO
Contracts which would affect their source of livelihood;4 and (b) the members of the House of
Representatives, petitioners in G.R. No. 155547, were granted standing in view of the serious legal
questions involved and their impact on public interest. 5
As to the merits of the Petitions in Agan, the Court concluded that:
In sum, this Court rules that in view of the absence of the requisite financial capacity of the
Paircargo Consortium, predecessor of respondent PIATCO, the award by the PBAC of the contract
for the construction, operation and maintenance of the NAIA IPT III is null and void. Further,
considering that the 1997 Concession Agreement contains material and substantial amendments,
which amendments had the effect of converting the 1997 Concession Agreement into an entirely
different agreement from the contract bidded upon, the 1997 Concession Agreement is similarly
null and void for being contrary to public policy. The provisions under Sections 4.04(b) and (c) in
relation to Section 1.06 of the 1997 Concession Agreement and Section 4.04(c) in relation to
398
Section 1.06 of the ARCA, which constitute a direct government guarantee expressly prohibited
by, among others, the BOT Law and its Implementing Rules and Regulations are also null and
void. The Supplements, being accessory contracts to the ARCA, are likewise null and void.6
Hence, the fallo of the Court's Decision in Agan reads:
WHEREFORE, the 1997 Concession Agreement, the Amended and Restated Concession
Agreement and the Supplements thereto are set aside for being null and void. 7
In a Resolution8 dated 21 January 2004, the Court denied with finality the Motions for Reconsideration of its
5 May 2003 Decision in Agan filed by therein respondents PIATCO and Congressmen Paras, et al., and
respondents-intervenors.9 Significantly, the Court declared in the same Resolution that:
This Court, however, is not unmindful of the reality that the structures comprising the NAIA IPT
III facility are almost complete and that funds have been spent by PIATCO in their construction.
For the government to take over the said facility, it has to compensate respondent PIATCO as
builder of the said structures. The compensation must be just and in accordance with law and
equity for the government can not unjustly enrich itself at the expense of PIATCO and its
investors.10 (Emphasis ours.)
It is these afore-quoted pronouncements that gave rise to the Petition in Gingoyon.
Republic v. Gingoyon (G.R. No. 166429)
According to the statement of facts in Gingoyon:
After the promulgation of the rulings in Agan, the NAIA 3 facilities have remained in the
possession of PIATCO, despite the avowed intent of the Government to put the airport terminal
into immediate operation. The Government and PIATCO conducted several rounds of negotiation
regarding the NAIA 3 facilities. It also appears that arbitral proceedings were commenced before
the International Chamber of Commerce International Court of Arbitration and the International
Centre for the Settlement of Investment Disputes, although the Government has raised
jurisdictional questions before those two bodies.
Then, on 21 December 2004, the Government filed a Complaint for expropriation with the Pasay
City Regional Trial Court (RTC), together with an Application for Special Raffle seeking the
immediate holding of a special raffle. The Government sought upon the filing of the complaint the
issuance of a writ of possession authorizing it to take immediate possession and control over the
NAIA 3 facilities. The Government also declared that it had deposited the amount
of P3,002,125,000.00 (3 Billion) in Cash with the Land Bank of the Philippines, representing the
NAIA 3 terminal's assessed value for taxation purposes.
The case was raffled to Branch 117 of the Pasay City RTC, presided by respondent judge Hon.
Henrick F. Gingoyon (Hon. Gingoyon). On the same day that the Complaint was filed, the RTC
issued an Order directing the issuance of a writ of possession to the Government, authorizing it to
"take or enter upon the possession" of the NAIA 3 facilities. Citing the case of City of Manila v.
Serrano, the RTC noted that it had the ministerial duty to issue the writ of possession upon the
filing of a complaint for expropriation sufficient in form and substance, and upon deposit made by
the government of the amount equivalent to the assessed value of the property subject to
expropriation. The RTC found these requisites present, particularly noting that "[t]he case record
shows that [the Government has] deposited the assessed value of the [NAIA 3 facilities] in the
Land Bank of the Philippines, an authorized depositary, as shown by the certification attached to
their complaint." Also on the same day, the RTC issued a Writ of Possession. According to
PIATCO, the Government was able to take possession over the NAIA 3 facilities immediately
after the Writ of Possession was issued.
However, on 4 January 2005, the RTC issued another Order designed to supplement its 21
December 2004 Order and the Writ of Possession. In the 4 January 2005 Order, now assailed in
the present petition, the RTC noted that its earlier issuance of its writ of possession was pursuant to
Section 2, Rule 67 of the 1997 Rules of Civil Procedure. However, it was observed that Republic
 Act No. 8974 (Rep. Act No. 8974), otherwise known as "An Act to Facilitate the Acquisition of
Right-of-Way, Site or Location for National Government Infrastructure Projects and For Other
Purposes" and its Implementing Rules and Regulations (Implementing Rules) had amended Rule
67 in many respects.
There are at least two crucial differences between the respective procedures under Rep. Act No.
8974 and Rule 67. Under the statute, the Government is required to make immediate payment to
the property owner upon the filing of the complaint to be entitled to a writ of possession, whereas
in Rule 67, the Government is required only to make an initial deposit with an authorized
government depositary. Moreover, Rule 67 prescribes that the initial deposit be equivalent to the
assessed value of the property for purposes of taxation, unlike Rep. Act No. 8974 which provides,
as the relevant standard for initial compensation, the market value of the property as stated in the
tax declaration or the current relevant zonal valuation of the Bureau of Internal Revenue (BIR),
whichever is higher, and the value of the improvements and/or structures using the replacement
cost method.
Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of the
Implementing Rules, the RTC made key qualifications to its earlier issuances. First, it directed the
Land Bank of the Philippines, Baclaran Branch (LBP-Baclaran), to immediately release the
amount of US$62,343,175.77 to PIATCO, an amount which the RTC characterized as that which
the Government "specifically made available for the purpose of this expropriation;" and such
amount to be deducted from the amount of just compensation due PIATCO as eventually
determined by the RTC. Second, the Government was directed to submit to the RTC a Certificate
of Availability of Funds signed by authorized officials to cover the payment of just
compensation. Third, the Government was directed "to maintain, preserve and safeguard" the
NAIA 3 facilities or "perform such as acts or activities in preparation for their direct operation" of
the airport terminal, pending expropriation proceedings and full payment of just compensation.
However, the Government was prohibited "from performing acts of ownership like awarding
concessions or leasing any part of [NAIA 3] to other parties."
The very next day after the issuance of the assailed 4 January 2005 Order, the Government filed
an Urgent Motion for Reconsideration, which was set for hearing on 10 January 2005. On 7
January 2005, the RTC issued another Order, the second now assailed before this Court, which
appointed three (3) Commissioners to ascertain the amount of just compensation for the NAIA 3
Complex. That same day, the Government filed a Motion for Inhibition of Hon. Gingoyon.
The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition on 10 January
2005. On the same day, it denied these motions in an Omnibus Order dated 10 January 2005. This
is the third Order now assailed before this Court. Nonetheless, while the Omnibus Order affirmed
the earlier dispositions in the 4 January 2005 Order, it excepted from affirmance "the superfluous
part of the Order prohibiting the plaintiffs from awarding concessions or leasing any part of
[NAIA 3] to other parties."
Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed on 13 January
2005. The petition prayed for the nullification of the RTC orders dated 4 January 2005, 7 January
2005, and 10 January 2005, and for the inhibition of Hon. Gingoyon from taking further action on
the expropriation case. A concurrent prayer for the issuance of a temporary restraining order and
preliminary injunction was granted by this Court in a Resolution dated 14 January 2005.11
The Court resolved the Petition of the Republic of the Philippines and Manila International Airport
Authority in Gingoyon in this wise:
In conclusion, the Court summarizes its rulings as follows:
(1) The 2004 Resolution in Agan sets the base requirement that has to be observed before the
Government may take over the NAIA 3, that there must be payment to PIATCO of just
399
compensation in accordance with law and equity. Any ruling in the present expropriation case
must be conformable to the dictates of the Court as pronounced in the Agan cases.
(2) Rep. Act No. 8974 applies in this case, particularly insofar as it requires the immediate
payment by the Government of at least the proffered value of the NAIA 3 facilities to PIATCO and
provides certain valuation standards or methods for the determination of just compensation.
(3) Applying Rep. Act No. 8974, the implementation of Writ of Possession in favor of the
Government over NAIA 3 is held in abeyance until PIATCO is directly paid the amount of P3
Billion, representing the proffered value of NAIA 3 under Section 4(c) of the law.
(4) Applying Rep. Act No. 8974, the Government is authorized to start the implementation of the
NAIA 3 Airport terminal project by performing the acts that are essential to the operation of the
NAIA 3 as an international airport terminal upon the effectivity of the Writ of Possession, subject
to the conditions above-stated. As prescribed by the Court, such authority encompasses "the repair,
reconditioning and improvement of the complex, maintenance of the existing facilities and
equipment, installation of new facilities and equipment, provision of services and facilities
pertaining to the facilitation of air traffic and transport, and other services that are integral to a
modern-day international airport."
5) The RTC is mandated to complete its determination of the just compensation within sixty (60)
days from finality of this Decision. In doing so, the RTC is obliged to comply with the standards
set under Rep. Act No. 8974 and its Implementing Rules. Considering that the NAIA 3 consists of
structures and improvements, the valuation thereof shall be determined using the replacements cost
method, as prescribed under Section 10 of the Implementing Rules.
(6) There was no grave abuse of discretion attending the RTC Order appointing the commissioners
for the purpose of determining just compensation. The provisions on commissioners under Rule 67
shall apply insofar as they are not inconsistent with Rep. Act No. 8974, its Implementing Rules, or
the rulings of the Court in Agan.
(7) The Government shall pay the just compensation fixed in the decision of the trial court to
PIATCO immediately upon the finality of the said decision.
(8) There is no basis for the Court to direct the inhibition of Hon. Gingoyon.
All told, the Court finds no grave abuse of discretion on the part of the RTC to warrant the
nullification of the questioned orders. Nonetheless, portions of these orders should be modified to
conform with law and the pronouncements made by the Court herein.12
The decretal portion of the Court's Decision in Gingoyon thus reads:
WHEREFORE, the Petition is GRANTED in PART with respect to the orders dated 4 January
2005 and 10 January 2005 of the lower court. Said orders are AFFIRMED with the following
MODIFICATIONS:
1) The implementation of the Writ of Possession dated 21 December 2004 is HELD IN
ABEYANCE, pending payment by petitioners to PIATCO of the amount of Three Billion Two
Million One Hundred Twenty Five Thousand Pesos (P3,002,125,000.00), representing the
proffered value of the NAIA 3 facilities;
2) Petitioners, upon the effectivity of the Writ of Possession, are authorized [to] start the
implementation of the Ninoy Aquino International Airport Pasenger Terminal III project by
performing the acts that are essential to the operation of the said International Airport Passenger
Terminal project;
3) RTC Branch 117 is hereby directed, within sixty (60) days from finality of this Decision, to
determine the just compensation to be paid to PIATCO by the Government.
The Order dated 7 January 2005 is AFFIRMED in all respects subject to the qualification that the
parties are given ten (10) days from finality of this Decision to file, if they so choose, objections to
the appointment of the commissioners decreed therein.
The Temporary Restraining Order dated 14 January 2005 is hereby LIFTED.
 No pronouncement as to costs.13
Motions for Partial Reconsideration of the foregoing Decision were filed by therein petitioners Republic and
MIAA, as well as the three other parties who sought to intervene, namely, Asakihosan Corporation,
Takenaka Corporation, and Congressman Baterina.
In a Resolution dated 1 February 2006, this Court denied with finality the Motion for Partial
Reconsideration of therein petitioners and remained faithful to its assailed Decision based on the following
ratiocination:
Admittedly, the 2004 Resolution in Agan could be construed as mandating the full payment of the
final amount of just compensation before the Government may be permitted to take over the NAIA
3. However, the Decision ultimately rejected such a construction, acknowledging the public good
that would result from the immediate operation of the NAIA 3. Instead, the Decision adopted an
interpretation which is in consonance with Rep. Act No. 8974 and with equitable standards as well,
that allowed the Government to take possession of the NAIA 3 after payment of the proffered
value of the facilities to PIATCO. Such a reading is substantially compliant with the
pronouncement in the 2004 Agan Resolution, and is in accord with law and equity. In contrast, the
Government's position, hewing to the strict application of Rule 67, would permit the Government
to acquire possession over the NAIA 3 and implement its operation without having to pay
PIATCO a single centavo, a situation that is obviously unfair. Whatever animosity the Government
may have towards PIATCO does not acquit it from settling its obligations to the latter, particularly
those which had already been previously affirmed by this Court. 14
The Court, in the same Resolution, denied all the three motions for intervention of Asakihosan Corporation,
Takenaka Corporation, and Congressman Baterina, and ruled as follows:
We now turn to the three (3) motions for intervention all of which were filed after the
promulgation of the Court's Decision. All three (3) motions must be denied. Under Section 2, Rule
19 of the 1997 Rules of Civil Procedure the motion to intervene may be filed at any time before
rendition of judgment by the court. Since this case originated from an original action filed before
this Court, the appropriate time to file the motions-in-intervention in this case if ever was before
and not after resolution of this case. To allow intervention at this juncture would be highly
irregular. It is extremely improbable that the movants were unaware of the pendency of the present
case before the Court, and indeed none of them allege such lack of knowledge.
Takenaka and Asahikosan rely on Mago v. Court of Appeals wherein the Court took the
extraordinary step of allowing the motion for intervention even after the challenged order of the
trial court had already become final. Yet it was apparent in Mago that the movants therein were not
impleaded despite being indispensable parties, and had not even known of the existence of the case
before the trial court, and the effect of the final order was to deprive the movants of their land. In
this case, neither Takenaka nor Asahikosan stand to be dispossessed by reason of the Court's
Decision. There is no palpable due process violation that would militate the suspension of the
procedural rule.
Moreover, the requisite legal interest required of a party-in-intervention has not been established so
as to warrant the extra-ordinary step of allowing intervention at this late stage. As earlier noted, the
claims of Takenaka and Asahikosan have not been judicially proved or conclusively established as
fact by any trier of facts in this jurisdiction. Certainly, they could not be considered as
indispensable parties to the petition for certiorari. In the case of Representative Baterina, he
invokes his prerogative as legislator to curtail the disbursement without appropriation of public
funds to compensate PIATCO, as well as that as a taxpayer, as the basis of his legal standing to
intervene. However, it should be noted that the amount which the Court directed to be paid by the
Government to PIATCO was derived from the money deposited by the Manila International
Airport Authority, an agency which enjoys corporate autonomy and possesses a legal personality
400
separate and distinct from those of the National Government and agencies thereof whose budgets
have to be approved by Congress.
It is also observed that the interests of the movants-in-intervention may be duly litigated in
proceedings which are extant before lower courts. There is no compelling reason to disregard the
established rules and permit the interventions belatedly filed after the promulgation of the Court's
Decision.15
Asia's Emerging Dragon Corporation v. Department of Transportation and Communications and Manila
International Airport Authority (G.R. No. 169914)
Banking on this Court's declaration in Agan that the award of the NAIA IPT III Project to PIATCO is null
and void, Asia's Emerging Dragon Corporation (AEDC) filed before this Court the present Petition
for Mandamus and Prohibition (with Application for Temporary Restraining Order), praying of this Court
that:
(1) After due hearing, judgment be rendered commanding the Respondents, their officers, agents,
successors, representatives or persons or entities acting on their behalf, to formally award the
NAIA-APT [sic]III PROJECT to Petitioner AEDC and to execute and formalize with Petitioner
AEDC the approved Draft Concession Agreement embodying the agreed terms and conditions for
the operation of the NAIA-IPT III Project and directing Respondents to cease and desist from
awarding the NAIA-IPT Project to third parties or negotiating into any concession contract with
third parties.
(2) Pending resolution on the merits, a Temporary Restraining Order be issued enjoining
Respondents, their officers, agents, successors or representatives or persons or entities acting on
their behalf from negotiating, re-bidding, awarding or otherwise entering into any concession
contract with PIATCO and other third parties for the operation of the NAIA-IPT III Project.
Other relief and remedies, just and equitable under the premises, are likewise prayed for. 16
AEDC bases its Petition on the following grounds:
I. PETITIONER AEDC, BEING THE RECOGNIZED AND UNCHALLENGED ORIGINAL
PROPONENT, HAS THE EXCLUSIVE, CLEAR AND VESTED STATUTORY RIGHT TO
THE AWARD OF THE NAIA-IPT III PROJECT;
II. RESPONDENTS HAVE A STATUTORY DUTY TO PROTECT PETITIONER AEDC AS
THE UNCHALLENGED ORIGINAL PROPONENT AS A RESULT OF THE SUPREME
COURT'S NULLIFICATION OF THE AWARD OF THE NAIA-IPT III PROJECT TO
PIATCO[; and]
III. RESPONDENTS HAVE NO LEGAL BASIS OR AUTHORITY TO TAKE OVER THE
NAIA-IPT III PROJECT, TO THE EXCLUSION OF PETITIONER AEDC, OR TO AWARD
THE PROJECT TO THIRD PARTIES.17
At the crux of the Petition of AEDC is its claim that, being the recognized and unchallenged original
proponent of the NAIA IPT III Project, it has the exclusive, clear, and vested statutory right to the award
thereof. However, the Petition of AEDC should be dismissed for lack of merit, being as it is, substantially
and procedurally flawed.
SUBSTANTIVE INFIRMITY
A petition for mandamus is governed by Section 3 of Rule 65 of the Rules of Civil Procedure, which reads –
SEC. 3. Petition for mandamus. – When any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting
from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a
right or office to which such other is entitled, and there is no other plain, speedy and adequate
remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in
the proper court, alleging the facts with certainty and praying that judgment be rendered
commanding the respondent, immediately or some other time to be specified by the court, to do the
 act required to be done to protect the rights of the petitioner, and to pay the damages sustained by
the petitioner by reason of the wrongful acts of the respondent.
It is well-established in our jurisprudence that only specific legal rights are enforceable by mandamus, that
the right sought to be enforced must be certain and clear, and that the writ will not issue in cases where the
right is doubtful. Just as fundamental is the principle governing the issuance of mandamus that the duties to
be performed must be such as are clearly and peremptorily enjoined by law or by reason of official station. 18
A rule long familiar is that mandamus never issues in doubtful cases. It requires a showing of a complete
and clear legal right in the petitioner to the performance of ministerial acts. In varying language, the
principle echoed and reechoed is that legal rights may be enforced by mandamus only if those rights are
well-defined, clear and certain. Otherwise, the mandamus petition must be dismissed.19
The right that AEDC is seeking to enforce is supposedly enjoined by Section 4-A of Republic Act No.
6957,20 as amended by Republic Act No. 7718, on unsolicited proposals, which provides –
SEC. 4-A. Unsolicited proposals. – Unsolicited proposals for projects may be accepted by any
government agency or local government unit on a negotiated basis: Provided, That, all the
following conditions are met: (1) such projects involve a new concept or technology and/or are not
part of the list of priority projects, (2) no direct government guarantee, subsidy or equity is
required, and (3) the government agency or local government unit has invited by publication, for
three (3) consecutive weeks, in a newspaper of general circulation, comparative or competitive
proposals and no other proposal is received for a period of sixty (60) working days: Provided,
further, That in the event another proponent submits a lower price proposal, the original proponent
shall have the right to match the price within thirty (30) working days.
In furtherance of the afore-quoted provision, the Implementing Rules and Regulations (IRR) of Republic
Act No. 6957, as amended by Republic Act No. 7718, devoted the entire Rule 10 to Unsolicited Proposals,
pertinent portions of which are reproduced below –
Sec. 10.1. Requisites for Unsolicited Proposals. – Any Agency/LGU may accept unsolicited
proposals on a negotiated basis provided that all the following conditions are met:
a. the project involves a new concept or technology and/or is not part of the list of priority projects;
b. no direct government guarantee, subsidy or equity is required; and
c. the Agency/LGU concerned has invited by publication, for three (3) consecutive weeks, in a
newspaper of general circulation, comparative or competitive proposals and no other proposal is
received for a period of sixty (60) working days. In the event that another project proponent
submits a price proposal lower than that submitted by the original proponent, the latter shall have
the right to match said price proposal within thirty (30) working days. Should the original
proponent fail to match the lower price proposal submitted within the specified period, the contract
shall be awarded to the tenderer of the lowest price. On the other hand, if the original project
proponent matches the submitted lowest price within the specified period, he shall be immediately
be awarded the project.
xxxx
Sec. 10.6. Evaluation of Unsolicited Proposals. – The Agency/LGU is tasked with the initial
evaluation of the proposal. The Agency/LGU shall: 1) appraise the merits of the project; 2)
evaluate the qualification of the proponent; and 3) assess the appropriateness of the contractual
arrangement and reasonableness of the risk allocation. The Agency/LGU is given sixty (60) days
to evaluate the proposal from the date of submission of the complete proposal. Within this 60-day
period, the Agency/LGU, shall advise the proponent in writing whether it accepts or rejects the
proposal. Acceptance means commitment of the Agency/LGU to pursue the project and
recognition of the proponent as the "original proponent." At this point, the Agency/LGU will no
longer entertain other similar proposals until the solicitation of comparative proposals. The
implementation of the project, however, is still contingent primarily on the approval of the
appropriate approving authorities consistent with Section 2.7 of these IRR, the agreement between
401
the original proponent and the Agency/LGU of the contract terms, and the approval of the contract
by the [Investment Coordination Committee (ICC)] or Local Sanggunian.
xxxx
Sec. 10.9. Negotiation With the Original Proponent. – Immediately after ICC/Local Sanggunian's
clearance of the project, the Agency/LGU shall proceed with the in-depth negotiation of the project
scope, implementation arrangements and concession agreement, all of which will be used in the
Terms of Reference for the solicitation of comparative proposals. The Agency/LGU and the
proponent are given ninety (90) days upon receipt of ICC's approval of the project to conclude
negotiations. The Agency/LGU and the original proponent shall negotiate in good faith. However,
should there be unresolvable differences during the negotiations, the Agency/LGU shall have the
option to reject the proposal and bid out the project. On the other hand, if the negotiation is
successfully concluded, the original proponent shall then be required to reformat and resubmit its
proposal in accordance with the requirements of the Terms of Reference to facilitate comparison
with the comparative proposals. The Agency/LGU shall validate the reformatted proposal if it
meets the requirements of the TOR prior to the issuance of the invitation for comparative
proposals.
xxxx
Sec. 10.11. Invitation for Comparative Proposals. The Agency/LGU shall publish the invitation for
comparative or competitive proposals only after ICC/Local Sanggunian issues a no objection
clearance of the draft contract. The invitation for comparative or competitive proposals should be
published at least once every week for three (3) weeks in at least one (1) newspaper of general
circulation. It shall indicate the time, which should not be earlier than the last date of publication,
and place where tender/bidding documents could be obtained. It shall likewise explicitly specify a
time of sixty (60) working days reckoned from the date of issuance of the tender/bidding
documents upon which proposals shall be received. Beyond said deadline, no proposals shall be
accepted. A pre-bid conference shall be conducted ten (10) working days after the issuance of the
tender/bidding documents.
Sec. 10.12. Posting of Bid Bond by Original Proponent. – The original proponent shall be required
at the date of the first date of the publication of the invitation for comparative proposals to submit a
bid bond equal to the amount and in the form required of the challengers.
Sec. 10.13. Simultaneous Qualification of the Original Proponent. – The Agency/LGU shall
qualify the original proponent based on the provisions of Rule 5 hereof, within thirty (30) days
from start of negotiation. For consistency, the evaluation criteria used for qualifying the original
proponent should be the same criteria used for qualifying the original proponent should be the
criteria used in the Terms of Reference for the challengers.
xxxx
Sec. 10.16. Disclosure of the Price Proposal. – The disclosure of the price proposal of the original
proponent in the Tender Documents will be left to the discretion of the Agency/LGU. However, if
it was not disclosed in the Tender Documents, the original proponent's price proposal should be
revealed upon the opening of the financial proposals of the challengers. The right of the original
proponent to match the best proposal within thirty (30) working days starts upon official
notification by the Agency/LGU of the most advantageous financial proposal. (Emphasis ours.)
In her sponsorship speech on Senate Bill No. 1586 (the precursor of Republic Act No. 7718), then Senator
(now President of the Republic of the Philippines) Gloria Macapagal-Arroyo explained the reason behind
the proposed amendment that would later become Section 4-A of Republic Act No. 6957, as amended by
Republic Act No. 7718:
The object of the amendment is to protect proponents which have already incurred costs in the
conceptual design and in the preparation of the proposal, and which may have adopted an
imaginative method of construction or innovative concept for the proposal. The amendment also
 aims to harness the ingenuity of the private sector to come up with solutions to the country's
infrastructure problems.21
It is irrefragable that Section 4-A of Republic Act No. 6957, as amended by Republic Act No. 7718, and
Section 10 of its IRR, accord certain rights or privileges to the original proponent of an unsolicited proposal
for an infrastructure project. They are meant to encourage private sector initiative in conceptualizing
infrastructure projects that would benefit the public. Nevertheless, none of these rights or privileges would
justify the automatic award of the NAIA IPT III Project to AEDC after its previous award to PIATCO was
declared null and void by this Court in Agan.
The rights or privileges of an original proponent of an unsolicited proposal for an infrastructure project are
never meant to be absolute. Otherwise, the original proponent can hold the Government hostage and secure
the award of the infrastructure project based solely on the fact that it was the first to submit a proposal. The
absurdity of such a situation becomes even more apparent when considering that the proposal is unsolicited
by the Government. The rights or privileges of an original proponent depends on compliance with the
procedure and conditions explicitly provided by the statutes and their IRR.
An unsolicited proposal is subject to evaluation, after which, the government agency or local government
unit (LGU) concerned may accept or reject the proposal outright.
Under Section 10.6 of the IRR, the "acceptance" of the unsolicited proposal by the agency/LGU is limited to
the "commitment of the [a]gency/LGU to pursue the project and recognition of the proponent as the 'original
proponent.'" Upon acceptance then of the unsolicited proposal, the original proponent is recognized as such
but no award is yet made to it. The commitment of the agency/LGU upon acceptance of the unsolicited
proposal is to the pursuit of the project, regardless of to whom it shall subsequently award the same. The
acceptance of the unsolicited proposal only precludes the agency/LGU from entertaining other similar
proposals until the solicitation of comparative proposals.
Consistent in both the statutes and the IRR is the requirement that invitations be published for comparative
or competitive proposals. Therefore, it is mandatory that a public bidding be held before the awarding of the
project. The negotiations between the agency/LGU and the original proponent, as provided in Section 10.9
of the IRR, is for the sole purpose of coming up with draft agreements, which shall be used in the Terms of
Reference (TOR) for the solicitation of comparative proposals. Even at this point, there is no definite
commitment made to the original proponent as to the awarding of the project. In fact, the same IRR
provision even gives the concerned agency/LGU, in case of unresolvable differences during the
negotiations, the option to reject the original proponent's proposal and just bid out the project.
Generally, in the course of processing an unsolicited proposal, the original proponent is treated in much the
same way as all other prospective bidders for the proposed infrastructure project. It is required to reformat
and resubmit its proposal in accordance with the requirements of the TOR. 22 It must submit a bid bond equal
to the amount and in the form required of the challengers.23 Its qualification shall be evaluated by the
concerned agency/LGU, using evaluation criteria in accordance with Rule 5 24 of the IRR, and which shall be
the same criteria to be used in the TOR for the challengers.25 These requirements ensure that the public
bidding under Rule 10 of IRR on Unsolicited Proposals still remain in accord with the three principles in
public bidding, which are: the offer to the public, an opportunity for competition, and a basis for exact
comparison of bids.26
The special rights or privileges of an original proponent thus come into play only when there are other
proposals submitted during the public bidding of the infrastructure project. As can be gleaned from the plain
language of the statutes and the IRR, the original proponent has: (1) the right to match the lowest or most
advantageous proposal within 30 working days from notice thereof, and (2) in the event that the original
proponent is able to match the lowest or most advantageous proposal submitted, then it has the right to be
awarded the project. The second right or privilege is contingent upon the actual exercise by the original
proponent of the first right or privilege. Before the project could be awarded to the original proponent, he
must have been able to match the lowest or most advantageous proposal within the prescribed period.
402
Hence, when the original proponent is able to timely match the lowest or most advantageous proposal, with
all things being equal, it shall enjoy preference in the awarding of the infrastructure project.
This is the extent of the protection that Legislature intended to afford the original proponent, as supported by
the exchange between Senators Neptali Gonzales and Sergio Osmeña during the Second Reading of Senate
Bill No. 1586:
Senator Gonzales:
xxxx
The concept being that in case of an unsolicited proposal and nonetheless public bidding has been
held, then [the original proponent] shall, in effect, be granted what is the equivalent of the right of
first refusal by offering a bid which shall equal or better the bid of the winning bidder within a
period of, let us say, 30 days from the date of bidding.
Senator Osmeña:
xxxx
To capture the tenor of the proposal of the distinguished Gentleman, a subsequent paragraph has to
be added which says, "IF THERE IS A COMPETITIVE PROPOSAL, THE ORIGINAL
PROPONENT SHALL HAVE THE RIGHT TO EQUAL THE TERMS AND CONDITIONS OF
THE COMPETITIVE PROPOSAL."
In other words, if there is nobody who will submit a competitive proposal, then nothing is lost.
Everybody knows it, and it is open and transparent. But if somebody comes in with another
proposal – and because it was the idea of the original proponent – that proponent now has the right
to equal the terms of the original proposal.
SENATOR GONZALES:
That is the idea, Mr. President. Because it seems to me that it is utterly unfair for one who has
conceived an idea or a concept, spent and invested in feasibility studies, in the drawing of plans
and specifications, and the project is submitted to a public bidding, then somebody will win on the
basis of plans and specifications and concepts conceived by the original proponent. He should at
least be given the right to submit an equalizing bid. x x x.27 (Emphasis ours.)
As already found by this Court in the narration of facts in Agan, AEDC failed to match the more
advantageous proposal submitted by PIATCO by the time the 30-day working period expired on 28
November 1996;28 and, without exercising its right to match the most advantageous proposal, it cannot now
lay claim to the award of the project.
The bidding process as to the NAIA IPT III Project was already over after the award thereof to PIATCO,
even if eventually, the said award was nullified and voided. The nullification of the award to PIATCO did
not revive the proposal nor re-open the bidding. AEDC cannot insist that this Court turn back the hands of
time and award the NAIA IPT III Project to it, as if the bid of PIATCO never existed and the award of the
project to PIATCO did not take place. Such is a simplistic approach to a very complex problem that is the
NAIA IPT III Project.
In his separate opinion in Agan, former Chief Justice Artemio V. Panganiban noted that "[T]here was
effectively no public bidding to speak of, the entire bidding process having been flawed and tainted from the
very outset, therefore, the award of the concession to Paircargo's successor Piatco was void, and the
Concession Agreement executed with the latter was likewise void ab initio. x x x.29" (Emphasis ours.) In
consideration of such a declaration that the entire bidding process was flawed and tainted from the very
beginning, then, it would be senseless to re-open the same to determine to whom the project should have
been properly awarded to. The process and all proposals and bids submitted in participation thereof, and not
just PIATCO's, were placed in doubt, and it would be foolhardy for the Government to rely on them again.
At the very least, it may be declared that there was a failure of public bidding. 30
In addition, PIATCO is already close to finishing the building of the structures comprising NAIA IPT III, 31 a
fact that this Court cannot simply ignore. The NAIA IPT III Project was proposed, subjected to bidding, and
awarded as a build-operate-transfer (BOT) project. A BOT project is defined as –
 A contractual arrangement whereby the project proponent undertakes the construction, including
financing, of a given infrastructure facility, and the operation and maintenance thereof. The project
proponent operates the facility over a fixed term during which it is allowed to charge facility users
appropriate tolls, fees, rentals, and charges not exceeding those proposed in its bid or as negotiated
and incorporated in the contract to enable the project proponent to recover its investment, and
operating and maintenance expenses in the project. The project proponent transfers the facility to
the government agency or local government unit concerned at the end of the fixed term that shall
not exceed fifty (50) years. This shall include a supply-and-operate situation which is a contractual
arrangement whereby the supplier of equipment and machinery for a given infrastructure facility, if
the interest of the Government so requires, operates the facility providing in the process
technology transfer and training to Filipino nationals. 32 (Emphasis ours.)
The original proposal of AEDC is for a BOT project, in which it undertook to build, operate, and transfer to
the Government the NAIA IPT III facilities. This is clearly no longer applicable or practicable under the
existing circumstances. It is undeniable that the physical structures comprising the NAIA IPT III Project are
already substantially built, and there is almost nothing left for AEDC to construct. Hence, the project could
no longer be awarded to AEDC based on the theory of legal impossibility of performance.
Neither can this Court revert to the original proposal of AEDC and award to it only the unexecuted
components of the NAIA IPT III Project. Whoever shall assume the obligation to operate and maintain
NAIA IPT III and to subsequently transfer the same to the Government (in case the operation is not assumed
by the Government itself) shall have to do so on terms and conditions that would necessarily be different
from the original proposal of AEDC. It will no longer include any undertaking to build or construct the
structures. An amendment of the proposal of AEDC to address the present circumstances is out of the
question since such an amendment would be substantive and tantamount to an entirely new proposal, which
must again be subjected to competitive bidding.
AEDC's offer to reimburse the Government the amount it shall pay to PIATCO for the NAIA IPT III Project
facilities, as shall be determined in the ongoing expropriation proceedings before the RTC of Pasay City,
cannot restore AEDC to its status and rights as the project proponent. It must be stressed that the law
requires the project proponent to undertake the construction of the project, including financing; financing,
thus, is but a component of the construction of the structures and not the entirety thereof.
Moreover, this "reimbursement arrangement" may even result in the unjust enrichment of AEDC. In its
original proposal, AEDC offered to construct the NAIA IPT III facilities for $350 million or P9 billion at
that time. In exchange, AEDC would share a certain percentage of the gross revenues with, and pay a
guaranteed annual income to the Government upon operation of the NAIA IPT III. In Gingoyon, the
proferred value of the NAIA IPT III facilities was already determined to be P3 billion. It seems improbable
at this point that the balance of the value of said facilities for which the Government is still obligated to pay
PIATCO shall reach or exceed P6 billion. There is thus the possibility that the Government shall be required
to pay PIATCO an amount less than P9 billion. If AEDC is to reimburse the Government only for the said
amount, then it shall acquire the NAIA IPT III facilities for a price less than its original proposal of P9
billion. Yet, per the other terms of its original proposal, it may still recoup a capital investment of P9 billion
plus a reasonable rate of return of investment. A change in the agreed value of the NAIA IPT III facilities
already built cannot be done without a corresponding amendment in the other terms of the original proposal
as regards profit sharing and length of operation; otherwise, AEDC will be unjustly enriched at the expense
of the Government.
Again, as aptly stated by former Chief Justice Panganiban, in his separate opinion in Agan:
If the PIATCO contracts are junked altogether as I think they should be, should not AEDC
automatically be considered the winning bidder and therefore allowed to operate the facility? My
answer is a stone-cold 'No.' AEDC never won the bidding, never signed any contract, and never
built any facility. Why should it be allowed to automatically step in and benefit from the greed of
another?33
403
The claim of AEDC to the award of the NAIA IPT III Project, after the award thereof to PIATCO was set
aside for being null and void, grounded solely on its being the original proponent of the project, is specious
and an apparent stretch in the interpretation of Section 4-A of Republic Act No. 6957, as amended by
Republic Act No. 7718, and Rule 10 of the IRR.
In all, just as AEDC has no legal right to the NAIA IPT III Project, corollarily, it has no legal right over the
NAIA IPT III facility. AEDC does not own the NAIA IPT III facility, which this Court already recognized
in Gingoyon as owned by PIATCO; nor does AEDC own the land on which NAIA IPT III stands, which is
undisputedly owned by the Republic through the Bases Conversion Development Authority (BCDA).
AEDC did not fund any portion of the construction of NAIA IPT III, which was entirely funded by
PIATCO. AEDC also does not have any kind of lien over NAIA IPT III or any kind of legal entitlement to
occupy the facility or the land on which it stands. Therefore, nothing that the Government has done or will
do in relation to the project could possibly prejudice or injure AEDC. AEDC then does not possess any legal
personality to interfere with or restrain the activities of the Government as regards NAIA IPT III. Neither
does it have the legal personality to demand that the Government deliver or sell to it the NAIA IPT III
facility despite the express willingness of AEDC to reimburse the Government the proferred amount it had
paid PIATCO and complete NAIA IPT III facility at its own cost.
AEDC invokes the Memorandum of Agreement, purportedly executed between the DOTC and AEDC on 26
February 1996, following the approval of the NAIA IPT III Project by the National Economic Development
Authority Board in a Resolution dated 13 February 1996, which provided for the following commitments by
the parties:
a. commitment of Respondent DOTC to target mid 1996 as the time frame for the formal award of
the project and commencement of site preparation and construction activities with the view of a
partial opening of the Terminal by the first quarter of 1998;
b. commitment of Respondent DOTC to pursue the project envisioned in the unsolicited proposal
and commence and conclude as soon as possible negotiations with Petitioner AEDC on the BOT
contract;
c. commitment of Respondent DOTC to make appropriate arrangements through which the formal
award of the project can be affected[;]
d. commitment of Petitioner AEDC to a fast track approach to project implementation and to
commence negotiations with its financial partners, investors and creditors;
e. commitment of Respondent DOTC and Petitioner AEDC to fast track evaluation of competitive
proposals, screening and eliminating nuisance comparative bids;34
It is important to note, however, that the document attached as Annex "E" to the Petition of AEDC is a
"certified photocopy of records on file." This Court cannot give much weight to said document considering
that its existence and due execution have not been established. It is not notarized, so it does not enjoy the
presumption of regularity of a public document. It is not even witnessed by anyone. It is not certified true by
its supposed signatories, Secretary Jesus B. Garcia, Jr. for DOTC and Chairman Henry Sy, Sr. for AEDC, or
by any government agency having its custody. It is certified as a photocopy of records on file by an Atty.
Cecilia L. Pesayco, the Corporate Secretary, of an unidentified corporation.
Even assuming for the sake of argument, that the said Memorandum of Agreement, is in existence and duly
executed, it does little to support the claim of AEDC to the award of the NAIA IPT III Project. The
commitments undertaken by the DOTC and AEDC in the Memorandum of Agreement may be simply
summarized as a commitment to comply with the procedure and requirements provided in Rules 10 and 11
of the IRR. It bears no commitment on the part of the DOTC to award the NAIA IPT III Project to AEDC.
On the contrary, the document includes express stipulations that negate any such government obligation.
Thus, in the first clause,35 the DOTC affirmed its commitment to pursue, implement and complete the NAIA
IPT III Project on or before 1998, noticeably without mentioning that such commitment was to pursue the
project specifically with AEDC. Likewise, in the second clause,36 it was emphasized that the DOTC shall
pursue the project under Rules 10 and 11 of the IRR of Republic Act No. 6957, as amended by Republic Act
No. 7718. And most significantly, the tenth clause of the same document provided:
10. Nothing in this Memorandum of Understanding shall be understood, interpreted or construed
as permitting, allowing or authorizing the circumvention of, or non-compliance with, or as
waiving, the provisions of, and requirements and procedures under, existing laws, rules and
regulations.37
AEDC further decries that:
24. In carrying out its commitments under the DOTC-AEDC MOU, Petitioner AEDC undertook
the following activities, incurring in the process tremendous costs and expenses.
a. pre-qualified 46 design and contractor firms to assist in the NAIA-IPT III Project;
b. appointed a consortium of six (6) local banks as its financial advisor in June 1996;
c. hired the services of GAIA South, Inc. to prepare the Project Description Report and to obtain
the Environmental Clearance Certificate (ECC) for the NAIA-IPT III Project;
d. coordinated with the Airline Operators Association, Bases Conversion Development Authority,
Philippine Air Force, Bureau of Customs, Bureau of Immigration, relative to their particular
requirements regarding the NAIA-IPT III [P]roject; and
e. negotiated and entered into firm commitments with Ital Thai, Marubeni Corporation and Mitsui
Corporation as equity partners.38
While the Court may concede that AEDC, as the original proponent, already expended resources in its
preparation and negotiation of its unsolicited proposal, the mere fact thereof does not entitle it to the instant
award of the NAIA IPT III Project. AEDC was aware that the said project would have to undergo public
bidding, and there existed the possibility that another proponent may submit a more advantageous bid which
it cannot match; in which case, the project shall be awarded to the other proponent and AEDC would then
have no means to recover the costs and expenses it already incurred on its unsolicited proposal. It was a
given business risk that AEDC knowingly undertook.
Additionally, the very defect upon which this Court nullified the award of the NAIA IPT III Project to
PIATCO similarly taints the unsolicited proposal of AEDC. This Court found Paircargo Consortium
financially disqualified after striking down as incorrect the PBAC's assessment of the consortium's financial
capability. According to the Court's ratio in Agan:
As the minimum project cost was estimated to be US$350,000,000.00 or
roughly P9,183,650,000.00, the Paircargo Consortium had to show to the satisfaction of the PBAC
that it had the ability to provide the minimum equity for the project in the amount of at
least P2,755,095,000.00.
xxxx
Thus, the maximum amount that Security Bank could validly invest in the Paircargo Consortium is
only P528,525,656.55, representing 15% of its entire net worth. The total net worth therefore of the
Paircargo Consortium, after considering the maximum amounts that may be validly invested by
each of its members is P558,384,871.55 or only 6.08% of the project cost, an amount substantially
less than the prescribed minimum equity investment required for the project in the amount
of P2,755,095,000.00 or 30% of the project cost.
The purpose of pre-qualification in any public bidding is to determine, at the earliest opportunity,
the ability of the bidder to undertake the project. Thus, with respect to the bidder's financial
capacity at the pre-qualification stage, the law requires the government agency to examine and
determine the ability of the bidder to fund the entire cost of the project by considering the
maximum amounts that each bidder may invest in the project at the time of pre-qualification.
xxxx
Thus, if the maximum amount of equity that a bidder may invest in the project at the time the bids
are submitted falls short of the minimum amounts required to be put up by the bidder, said bidder
should be properly disqualified. Considering that at the pre-qualification stage, the maximum
404
amounts which the Paircargo Consortium may invest in the project fell short of the minimum
amounts prescribed by the PBAC, we hold that Paircargo Consortium was not a qualified bidder.
Thus the award of the contract by the PBAC to the Paircargo Consortium, a disqualified bidder, is
null and void.39
Pursuant to the above-quoted ruling, AEDC, like the Paircargo Consortium, would not be financially
qualified to undertake the NAIA IPT III Project. Based on AEDC's own submissions to the Government, it
had then a paid-in capital of only P150,000,000.00,40 which was less than the P558,384,871.55 that
Paircargo Consortium was capable of investing in the NAIA IPT III Project, and even far less that what this
Court prescribed as the minimum equity investment required for the project in the amount
of P2,755,095,000.00 or 30% of the project cost. AEDC had not sufficiently demonstrated that it would have
been financially qualified to undertake the project at the time of submission of the bids.
Instead, AEDC took pains to present to this Court that allowing it to take over and operate NAIA IPT III at
present would be beneficial to the Government. This Court must point out, however, that AEDC is precisely
making a new proposal befitting the current status of the NAIA IPT III Project, contrary to its own argument
that it is merely invoking its original BOT proposal. And it is not for this Court to evaluate AEDC's new
proposal and assess whether it would truly be most beneficial for the Government, for the same is an
executive function rather than judicial, for which the statutes and regulations have sufficiently provided
standards and procedures for evaluation.
It can even be said that if the award of the NAIA IPT III Project was merely a matter of choosing between
PIATCO and AEDC (which it is not), there could be no doubt that PIATCO is more qualified to operate the
structure that PIATCO itself built and PIATCO's offer of P17.75 Billion in annual guaranteed payments to
the Government is far better that AEDC's offer of P135 Million.
Hence, AEDC is not entitled to a writ of mandamus, there being no specific, certain, and clear legal right to
be enforced, nor duty to be performed that is clearly and peremptorily enjoined by law or by reason of
official station.
PROCEDURAL LAPSES
In addition to the substantive weaknesses of the Petition of AEDC, the said Petition also suffers from
procedural defects.
AEDC revived its hope to acquire the NAIA IPT III Project when this Court promulgated its Decision
in Agan on 5 May 2003. The said Decision became final and executory on 17 February 2004 upon the denial
by this Court of the Motion for Leave to File Second Motion for Reconsideration submitted by PIATCO. It
is this Decision that declared the award of the NAIA IPT III Project to PIATCO as null and void; without
the same, then the award of the NAIA IPT III Project to PIATCO would still subsist and other persons
would remain precluded from acquiring rights thereto, including AEDC. Irrefutably, the present claim of
AEDC is rooted in the Decision of this Court in Agan. However, AEDC filed the Petition at bar only 20
months after the promulgation of the Decision in Agan on 5 May 2003.
It must be emphasized that under Sections 2 and 3, Rule 65 of the revised Rules of Civil Procedure, petitions
for prohibition and mandamus, such as in the instant case, can only be resorted to when there is no other
plain, speedy and adequate remedy for the party in the ordinary course of law.
In Cruz v. Court of Appeals,41 this Court elucidates that –
Although Rule 65 does not specify any period for the filing of a petition for certiorari
and mandamus, it must, nevertheless, be filed within a reasonable time. In certiorari cases, the
definitive rule now is that such reasonable time is within three months from the commission of the
complained act. The same rule should apply to mandamus cases.
The unreasonable delay in the filing of the petitioner's mandamus suit unerringly negates any claim
that the application for the said extraordinary remedy was the most expeditious and speedy
available to the petitioner. (Emphasis ours.)
As the revised Rules now stand, a petition for certiorari may be filed within 60 days from notice of the
judgment, order or resolution sought to be assailed.42 Reasonable time for filing a petition
for mandamus should likewise be for the same period. The filing by the AEDC of its petition
for mandamus 20 months after its supposed right to the project arose is evidently beyond reasonable time
and negates any claim that the said petition for the extraordinary writ was the most expeditious and speedy
remedy available to AEDC.
AEDC contends that the "reasonable time" within which it should have filed its petition should be reckoned
only from 21 September 2005, the date when AEDC received the letter from the Office of the Solicitor
General refusing to recognize the rights of AEDC to provide the available funds for the completion of the
NAIA IPT III Project and to reimburse the costs of the structures already built by PIATCO. It has been
unmistakable that even long before said letter – especially when the Government instituted with the RTC of
Pasay City expropriation proceedings for the NAIA IPT III on 21 December 2004 – that the Government
would not recognize any right that AEDC purportedly had over the NAIA IPT III Project and that the
Government is intent on taking over and operating the NAIA IPT III itself.
Another strong argument against the AEDC's Petition is that it is already barred by res judicata.
In Agan,43 it was noted that on 16 April 1997, the AEDC instituted before the RTC of Pasig City Civil Case
No. 66213, a Petition for the Declaration of Nullity of the Proceedings, Mandamus and Injunction, against
the DOTC Secretary and the PBAC Chairman and members.
In Civil Case No. 66213, AEDC prayed for:
i) the nullification of the proceedings before the DOTC-PBAC, including its decision to qualify
Paircargo Consortium and to deny Petitioner AEDC's access to Paircargo Consortium's technical
and financial bid documents;
ii) the protection of Petitioner AEDC's right to match considering the void challenge bid of the
Paircargo Consortium and the denial by DOTC-PBAC of access to information vital to the
effective exercise of its right to match;
iii) the declaration of the absence of any other qualified proponent submitting a competitive bid in
an unsolicited proposal.44
Despite the pendency of Civil Case No. 66213, the DOTC issued the notice of award for the NAIA IPT III
Project to PIATCO on 9 July 1997. The DOTC and PIATCO also executed on 12 July 1997 the 1997
Concession Agreement. AEDC then alleges that:
k) On September 3, 1998, then Pres. Joseph Ejercito Estrada convened a meeting with the
members of the Board of Petitioner AEDC to convey his "desire" for the dismissal of the
mandamus case filed by Petition AEDC and in fact urged AEDC to immediately withdraw said
case.
l) The President's direct intervention in the disposition of this mandamus case was a clear
imposition that Petitioner AEDC had not choice but to accept. To do otherwise was to take a
confrontational stance against the most powerful man in the country then under the risk of catching
his ire, which could have led to untold consequences upon the business interests of the
stakeholders in AEDC. Thus, Petitioner AEDC was constrained to agree to the signing of a Joint
Motion to Dismiss and to the filing of the same in court.
m) Unbeknownst to AEDC at that time was that simultaneous with the signing of the July 12, 1997
Concession Agreement, the DOTC and PIATCO executed a secret side agreement grossly
prejudicial and detrimental to the interest of Government. It stipulated that in the event that the
Civil Case filed by AEDC on April 16, 1997 is not resolved in a manner favorable to the
Government, PIATCO shall be entitled to full reimbursement for all costs and expenses it incurred
in order to obtain the NAIA IPT III BOT project in an amount not less than One Hundred Eighty
Million Pesos (Php 180,000,000.00). This was apparently the reason why the President was
determined to have AEDC's case dismissed immediately.
n) On February 9, 1999, after the Amended and Restated Concession Agreement (hereinafter
referred to as "ARCA") was signed without Petitioner AEDC's knowledge, Petitioner AEDC
405
signed a Joint Motion to Dismiss upon the representation of the DOTC that it would provide
AEDC with a copy of the 1997 Concession Agreement. x x x. 45
On 30 April 1999, the RTC of Pasig City issued an Order dismissing with prejudice Civil Case No. 66213
upon the execution by the parties of a Joint Motion to Dismiss. According to the Joint Motion to Dismiss –
The parties, assisted by their respective counsel, respectfully state:
1. Philippine International Air Terminals Company, Inc. ("PIATCO") and the respondents have
submitted to petitioner, through the Office of the Executive Secretary, Malacañang, a copy of the
Concession Agreement which they executed for the construction and operation of the Ninoy
Aquino International Airport International Passenger Terminal III Project ("NAIA IPT III Project),
which petitioner requested.
2. Consequently, the parties have decided to amicably settle the instant case and jointly move for
the dismissal thereof without any of the parties admitting liability or conceding to the position
taken by the other in the instant case.
3. Petitioner, on the other hand, and the respondents, on the other hand, hereby release and forever
discharge each other from any and all liabilities, direct or indirect, whether criminal or civil, which
arose in connection with the instant case.
4. The parties agree to bear the costs, attorney's fees and other expenses they respectively incurred
in connection with the instant case. (Emphasis ours.)
AEDC, however, invokes the purported pressure exerted upon it by then President Joseph E. Estrada, the
alleged fraud committed by the DOTC, and paragraph 2 in the afore-quoted Joint Motion to Dismiss to
justify the non-application of the doctrine of res judicata to its present Petition.
The elements of res judicata, in its concept as a bar by former judgment, are as follows: (1) the former
judgment or order must be final; (2) it must be a judgment or order on the merits, that is, it was rendered
after a consideration of the evidence or stipulations submitted by the parties at the trial of the case; (3) it
must have been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there
must be, between the first and second actions, identity of parties, of subject matter and of cause of
action.46 All of the elements are present herein so as to bar the present Petition.
First, the Order of the RTC of Pasig City, dismissing Civil Case No. 66213, was issued on 30 April 1999.
The Joint Motion to Dismiss, deemed a compromise agreement, once approved by the court is immediately
executory and not appealable.47
Second, the Order of the RTC of Pasig City dismissing Civil Case No. 66213 pursuant to the Joint Motion to
Dismiss filed by the parties constitutes a judgment on the merits.
The Joint Motion to Dismiss stated that the parties were willing to settle the case amicably and,
consequently, moved for the dismissal thereof. It also contained a provision in which the parties – the
AEDC, on one hand, and the DOTC Secretary and PBAC, on the other – released and forever discharged
each other from any and all liabilities, whether criminal or civil, arising in connection with the case. It is
undisputable that the parties entered into a compromise agreement, defined as "a contract whereby the
parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. 48"
Essentially, it is a contract perfected by mere consent, the latter being manifested by the meeting of the offer
and the acceptance upon the thing and the cause which are to constitute the contract. Once an agreement is
stamped with judicial approval, it becomes more than a mere contract binding upon the parties; having the
sanction of the court and entered as its determination of the controversy, it has the force and effect of any
other judgment.49 Article 2037 of the Civil Code explicitly provides that a compromise has upon the parties
the effect and authority of res judicata.
Because of the compromise agreement among the parties, there was accordingly a judicial settlement of the
controversy, and the Order, dated 30 April 1999, of the RTC of Pasig City was no less a judgment on the
merits which may be annulled only upon the ground of extrinsic fraud. 50 Thus, the RTC of Pasig City, in the
same Order, correctly granted the dismissal of Civil Case No. 66213 with prejudice.
A scrutiny of the Joint Motion to Dismiss submitted to the RTC of Pasig City would reveal that the parties
agreed to discharge one another from any and all liabilities, whether criminal or civil, arising from the case,
after AEDC was furnished with a copy of the 1997 Concession Agreement between the DOTC and
PIATCO. This complete waiver was the reciprocal concession of the parties that puts to an end the present
litigation, without any residual right in the parties to litigate the same in the future. Logically also, there was
no more need for the parties to admit to any liability considering that they already agreed to absolutely
discharge each other therefrom, without necessarily conceding to the other's position. For AEDC, it was a
declaration that even if it was not conceding to the Government's position, it was nonetheless waiving any
legal entitlement it might have to sue the Government on account of the NAIA IPT III Project. Conversely,
for the Government, it was an avowal that even if it was not accepting AEDC's stance, it was all the same
relinquishing its right to file any suit against AEDC in connection with the same project. That none of the
parties admitted liability or conceded its position is without bearing on the validity or binding effect of the
compromise agreement, considering that these were not essential to the said compromise.
Third, there is no question as to the jurisdiction of the RTC of Pasig City over the subject matter and parties
in Civil Case No. 66213. The RTC can exercise original jurisdiction over cases involving the issuance of
writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction.51 To recall, the
Petition of AEDC before the RTC of Pasig City was for the declaration of nullity of
proceedings, mandamus and injunction. The RTC of Pasig City likewise had jurisdiction over the parties,
with the voluntary submission by AEDC and proper service of summons on the DOTC Secretary and the
PBAC Chairman and members.
Lastly, there is, between Civil Case No. 66213 before the RTC of Pasig City and the Petition now pending
before this Court, an identity of parties, of subject matter, and of causes of action.
There is an identity of parties. In both petitions, the AEDC is the petitioner. The respondents in Civil Case
No. 66213 are the DOTC Secretary and the PBAC Chairman and members. The respondents in the instant
Petition are the DOTC, the DOTC Secretary, and the Manila International Airport Authority (MIAA). While
it may be conceded that MIAA was not a respondent and did not participate in Civil Case No. 66213, it may
be considered a successor-in-interest of the PBAC. When Civil Case No. 66213 was initiated, PBAC was
then in charge of the NAIA IPT III Project, and had the authority to evaluate the bids and award the project
to the one offering the lowest or most advantageous bid. Since the bidding is already over, and the structures
comprising NAIA IPT III are now built, then MIAA has taken charge thereof. Furthermore, it is clear that it
has been the intention of the AEDC to name as respondents in their two Petitions the government agency/ies
and official/s who, at the moment each Petition was filed, had authority over the NAIA IPT III Project.
There is an identity of subject matter because the two Petitions involve none other than the award and
implementation of the NAIA IPT III Project.
There is an identity of cause of action because, in both Petitions, AEDC is asserting the violation of its right
to the award of the NAIA IPT III Project as the original proponent in the absence of any other qualified
bidders. As early as in Civil Case No. 66213, AEDC already sought a declaration by the court of the absence
of any other qualified proponent submitting a competitive bid for the NAIA IPT III Project, which,
ultimately, would result in the award of the said project to it.
AEDC attempts to evade the effects of its compromise agreement by alleging that it was compelled to enter
into such an agreement when former President Joseph E. Estrada asserted his influence and intervened in
Civil Case No. 66213. This allegation deserves scant consideration. Without any proof that such events did
take place, such statements remain mere allegations that cannot be given weight. One who alleges any defect
or the lack of a valid consent to a contract must establish the same by full, clear and convincing evidence,
not merely by preponderance thereof.52 And, even assuming arguendo, that the consent of AEDC to the
compromise agreement was indeed vitiated, then President Estrada was removed from office in January
2001. AEDC filed the present Petition only on 20 October 2005. The four-year prescriptive period, within
which an action to annul a voidable contract may be brought, had already expired. 53
406
The AEDC further claims that the DOTC committed fraud when, without AEDC's knowledge, the DOTC
entered into an Amended and Restated Concession Agreement (ARCA) with PIATCO. The fraud on the part
of the DOTC purportedly also vitiated AEDC's consent to the compromise agreement. It is true that a
judicial compromise may be set aside if fraud vitiated the consent of a party thereof; and that the extrinsic
fraud, which nullifies a compromise, likewise invalidates the decision approving it.54 However, once again,
AEDC's allegations of fraud are unsubstantiated. There is no proof that the DOTC and PIATCO willfully
and deliberately suppressed and kept the information on the execution of the ARCA from AEDC. The
burden of proving that there indeed was fraud lies with the party making such allegation. Each party must
prove his own affirmative allegations. The burden of proof lies on the party who would be defeated if no
evidence were given on either side. In this jurisdiction, fraud is never presumed. 55
Moreover, a judicial compromise may be rescinded or set aside on the ground of fraud in accordance with
Rule 38 of the Rules on Civil Procedure on petition for relief from judgment. Section 3 thereof prescribes
the periods within which the petition for relief must be filed:
SEC. 3. Time for filing petition; contents and verification.– A petition provided for in either of the
preceding sections of this Rule must be verified, filed within sixty (60) days after the petitioner
learns of the judgment, final order or other proceeding to be set aside, and not more than six (6)
months after such judgment or final order was entered, or such proceeding was taken, and must be
accompanied with affidavits showing the fraud, accident, mistake or excusable negligence relied
upon, and the facts constituting the petitioner's good and substantial cause of action or defense, as
the case may be.
According to this Court's ruling in Argana v. Republic,56 as applied to a judgment based on compromise,
both the 60-day and six-month reglementary periods within which to file a petition for relief should be
reckoned from the date when the decision approving the compromise agreement was rendered because such
judgment is considered immediately executory and entered on the date that it was approved by the court. In
the present case, the Order of the RTC of Pasig City granting the Joint Motion to Dismiss filed by the parties
in Civil Case No. 66213 was issued on 30 April 1999, yet AEDC only spoke of the alleged fraud which
vitiated its consent thereto in its Petition before this Court filed on 20 October 2005, more than six years
later.
It is obvious that the assertion by AEDC of its vitiated consent to the Joint Motion to Dismiss Civil Case
No. 66213 is nothing more than an after-thought and a desperate attempt to escape the legal implications
thereof, including the barring of its present Petition on the ground of res judicata.
It is also irrelevant to the legal position of AEDC that the Government asserted in Agan that the award of the
NAIA IPT III Project to PIATCO was void. That the Government eventually took such a position, which
this Court subsequently upheld, does not affect AEDC's commitments and obligations under its judicially-
approved compromise agreement in Civil Case No. 66213, which AEDC signed willingly, knowingly, and
ably assisted by legal counsel.
In addition, it cannot be said that there has been a fundamental change in the Government's position since
Civil Case No. 66213, contrary to the allegation of AEDC. The Government then espoused that AEDC is
not entitled to the award of the NAIA IPT III Project. The Government still maintains the exact same
position presently. That the Government eventually reversed its position on the validity of its award of the
project to PIATCO is not inconsistent with its position that neither should AEDC be awarded the project.
For the foregoing substantive and procedural reasons, the instant Petition of AEDC should be dismissed.
Republic of the Philippines v. Court of Appeals and Baterina (G.R. No. 174166)
As mentioned in Gingoyon, expropriation proceedings for the NAIA IPT III was instituted by the
Government with the RTC of Pasay City, docketed as Case No. 04-0876CFM. Congressman Baterina,
together with other members of the House of Representatives, sought intervention in Case No. 04-0876CFM
by filing a Petition for Prohibition in Intervention (with Application for Temporary Restraining Order and
Writ of Preliminary Injunction). Baterina, et al. believe that the Government need not file expropriation
proceedings to gain possession of NAIA IPT III and that PIATCO is not entitled to payment of just
compensation, arguing thus –
A) Respondent PIATCO does not own Terminal III because BOT Contracts do not vest ownership
in PIATCO. As such, neither PIATCO nor FRAPORT are entitled to compensation.
B) Articles 448, ET SEQ., of the New Civil Code, as regards builders in good faith/bad faith, do
not apply to PIATCO's Construction of Terminal III.
C) Article 1412(2) of the New Civil Code allows the Government to demand the return of what it
has given without any obligation to comply with its promise.
D) The payment of compensation to PIATCO is unconstitutional, violative of the Build-Operate-
Transfer Law, and violates the Civil Code and other laws. 57
On 27 October 2005, the RTC of Pasay City issued an Order admitting the Petition in Intervention of
Baterina, et al., as well as the Complaint in Intervention of Manuel L. Fortes, Jr. and the Answer in
Intervention of Gina B. Alnas, et al. The Republic sought reconsideration of the 27 October 2005 Order of
the RTC of Pasay City, which, in an Omnibus Order dated 13 December 2005, was denied by the RTC of
Pasay City as regards the intervention of Baterina, et al. and Fortes, but granted as to the intervention of
Alnas, et al. On 22 March 2006, Baterina, et al. filed with the RTC of Pasay City a Motion to Declare in
Default and/or Motion for Summary Judgment considering that the Republic and PIATCO failed to file an
answer or any responsive pleading to their Petition for Prohibition in Intervention.
In the meantime, on 19 December 2005, the Court's Decision in Gingoyon was promulgated. Baterina also
filed a Motion for Intervention in said case and sought reconsideration of the Decision therein. However, his
Motion for Intervention was denied by this Court in a Resolution dated 1 February 2006.
On 27 March 2006, the RTC of Pasay City issued an Order and Writ of Execution, the dispositive portion of
which reads –
WHEREFORE, let a writ of execution be issued in this case directing the Sheriff of this court to
immediately implement the Order dated January 4, 2005 and January 10, 2005, as affirmed by the
Decision of the Supreme Court in G.R. No. 166429 in the above-entitled case dated December 19,
2005, in the following manner:
1. Ordering the General Manager, the Senior Assistant General Manager and the Vice President of
Finance of the Manila International Airport Authority (MIAA) to immediately withdraw the
amount of P3,002,125,000.00 from the above-mentioned Certificates of US Dollar Time Deposits
with the Land Bank of the Philippines, Baclaran Branch;
2. Ordering the Branch Manager, Land Bank of the Philippines, Baclaran Branch to immediately
release the sum of P3,002,125,000.00 to PIATCO;
Return of Service of the Writs shall be made by the Sheriff of this court immediately thereafter; 58
The RTC of Pasay City, in an Order, dated 15 June 2006, denied the Motions for Reconsideration of its
Order and Writ of Execution filed by the Government and Fortes. Baterina, meanwhile, went before the
Court of Appeals via a Petition for Certiorari and Prohibition (With Urgent Prayer for the Issuance of a
Temporary Restraining Order and Writ of Preliminary Injunction), docketed as CA-G.R. No. 95539,
assailing the issuance, in grave abuse of discretion, by the RTC of Pasay City of its Orders dated 27 March
2006 and 15 June 2006 and Writ of Execution dated 27 March 2006.
During the pendency of CA-G.R. No. 95539 with the Court of Appeals, the RTC of Pasay City issued an
Order, dated 7 August 2006, denying the Urgent Manifestation and Motion filed by the Republic in which it
relayed willingness to comply with the Order and Writ of Execution dated 27 March 2006, provided that the
trial court shall issue an Order expressly authorizing the Republic to award concessions and lease portions of
the NAIA IPT III to potential users. The following day, on 8 August 2006, the RTC of Pasay City issued an
Order denying the intervention of Baterina, et al. and Fortes in Case No. 04-0876CFM. In a third Order,
dated 9 August 2006, the RTC of Pasay City directed PIATCO to receive the amount of P3,002,125,000.00
from the Land Bank of the Philippines, Baclaran Branch.
407
By 24 August 2006, the Republic was all set to comply with the 9 August 2006 Order of the RTC of Pasay
City. Hence, the representatives of the Republic and PIATCO met before the RTC of Pasay City for the
supposed payment by the former to the latter of the proferred amount. However, on the same day, the Court
of Appeals, in CA G.R. No. 95539, issued a Temporary Restraining Order (TRO) enjoining, among other
things, the RTC of Pasay City from implementing the questioned Orders, dated 27 March 2006 and 15 June
2006, or "from otherwise causing payment and from further proceeding with the determination of just
compensation in the expropriation case involved herein, until such time that petitioner's motion to declare in
default and motion for partial summary judgment shall have been resolved by the trial court; or it is clarified
that PIATCO categorically disputes the proferred value for NAIA Terminal 3." The TRO was to be effective
for 30 days. Two days later, on 26 August 2006, the Republic filed with the Court of Appeals an Urgent
Motion to Lift Temporary Restraining Order, which the appellate court scheduled for hearing on 5
September 2006.
While the Urgent Motion to lift the TRO was still pending with the Court of Appeals, the Republic already
filed the present Petition for Certiorari and Prohibition With Urgent Application for a Temporary
Restraining Order and/or Writ of Preliminary Injunction, attributing to the Court of Appeals grave abuse of
discretion in granting the TRO and seeking a writ of prohibition against the Court of Appeals to enjoin it
from giving due course to Baterina's Petition in CA-G.R. No. 95539. The Republic thus raises before this
Court the following arguments:
I
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING
TO AN EXCESS OR LACK OF JURISDICTION WHEN IT GRANTED THE TEMPORARY
RESTRAINING ORDER.
A. THIS HONORABLE COURT'S DECISION IN GINGOYON CONSTITUTES THE
"LAW OF THE CASE".
B. THE TRO IS IN DIRECT CONTRAVENTION OF THIS COURT'S DECISION
WICH HAD ATTAINED FINALITY.
II
THE REPUBLIC IS SUFFERING IRREPARABLE DAMAGE.
III
THE COURT OF APPEALS MUST BE PROHIBITED FROM GIVING DUE COURSE TO A
PETITION THAT IS DEFECTIVE IN FORM AND SUBSTANCE.
A. PRIVATE RESPONDENT HAS NO LEGAL STANDING.
1. THIS HONORABLE COURT HAS RULED THAT PRIVATE
RESPONDENT HAS NO LEGAL STANDING.
2. PRIVATE RESPONDENT HAS LOST HIS STANDING AS AN
INTERVENOR.
B. PRIVATE RESPONDENT FAILED TO DEMONSTRATE THAT HE IS ENTITLED
TO THE INJUNCTIVE RELIEFS PRAYED FOR.
C. THE BOND POSTED IS INSUFFICIENT.
IV
GRANTING ARGUENDO THAT PRIVATE RESPONDENT'S PETITION IS SUFFICIENT IN
FORM AND SUBSTANCE, THE SAME HAS BECOME MOOT AND ACADEMIC.
A. THE MOTION TO DECLARE IN DEFAULT AND/OR MOTION FOR PARTIAL
SUMMARY JUDGMENT HAS ALREADY BEEN RESOLVED.
B. PIATCO HAS CATEGORICALLY DISPUTED THE PROFFERED VALUE FOR
NAIA TERMINAL III.59
The Republic prays of this Court that:
(a) Pending the determination of the merits of this petition, a temporary restraining order and/or a
writ of preliminary injunction be ISSUED restraining the Court of Appeals from implementing the
 writ of preliminary injunction in CA-G.R. SP No. 95539 and proceeding in said case such as
hearing it on September 5, 2006. After both parties have been heard, the preliminary injunction be
MADE PERMANENT;
(b) The Resolution date 24 August 2006 of the Court of Appeals be SET ASIDE; and
(c) CA-G.R. SP No. 95539 be ORDERED DISMISSED.
Other just and equitable reliefs are likewise prayed for. 60
On 4 September 2006, the Republic filed a Manifestation and Motion to Withdraw Urgent Motion to Lift
Temporary Restraining Order with the Court of Appeals stating, among other things, that it had decided to
withdraw the said Motion as it had opted to avail of other options and remedies. Despite the Motion to
Withdraw filed by the Government, the Court of Appeals issued a Resolution, dated 8 September 2006,
lifting the TRO it issued, on the basis of the following –
In view of the pronouncement of the Supreme Court in the Gingoyon case upholding the right of
PIATCO to be paid the proferred value in the amount of P3,002,125,000.00 prior to the
implementation of the writ of possession issued by the trial court on December 21, 2004 over the
NAIA Passenger Terminal III, and directing the determination of just compensation, there is no
practical and logical reason to maintain the effects of the Temporary Restraining Order contained
in our Resolution dated August 24, 2006. Thus, We cannot continue restraining what has been
mandated in a final and executory decision of the Supreme Court.
WHEREFORE, Our Resolution dated 24 August 2006 be SET ASIDE. Consequently, the Motion
to Withdraw the Motion to Lift the Temporary Restraining Order is rendered moot and academic. 61
There being no more legal impediment, the Republic tendered on 11 September 2006 Land Bank check in
the amount of P3,002,125,000.00 representing the proferred value of NAIA IPT III, which was received by a
duly authorized representative of PIATCO.
On 27 December 2006, the Court of Appeals rendered a Decision in CA G.R. No. 95539 dismissing
Baterina's Petition.
The latest developments before the Court of Appeals and the RTC of Pasay City render the present Petition
of the Republic moot.
Nonetheless, Baterina, as the private respondent in the instant Petition, presented his own prayer that a
judgment be rendered as follows:
A. For this Honorable Court, in the exercise of its judicial discretion to relax procedural rules
consistent with Metropolitan Traffic Command v. Gonong and deem that justice would be better
served if all legal issuesinvolved in the expropriation case and in Baterina are resolved in this case
once and for all, to DECLAREthat:
i. TERMINAL 3, as a matter of law, is public property and thus not a proper object of
eminent domain proceedings; and
ii. PIATCO, as a matter of law, is merely the builder of TERMINAL 3 and, as such, it
may file a claim for recovery on quantum meruit with the Commission on Audi[t] for
determination of the amount thereof, if any.
B. To DIRECT the Regional Trial Court of Pasay City, Branch 117 to dismiss the expropriation
case;
C. To DISMISS the instant Petition and DENY The Republic's application for TRO and/or writ of
preliminary injunction for lack of merit;
D. To DECLARE that the P3 Billion (representing the proferred value of TERMINAL 3) paid to
PIATCO on 11 September 2006 as funds held in trust by PIATCO for the benefit of the Republic
and subject to the outcome of the proceedings for the determination of recovery on quantum
meruit due to PIATCO, if any.
E. To DIRECT the Solicitor General to disclose the evidence it has gathered on corruption,
bribery, fraud, bad faith, etc., to this Honorable Court and the Commission on Audit, and
408
to DECLARE such evidence to be admissible in any proceeding for the determination of any
compensation due to PIATCO, if any.
[F]. In the alternative, to:
i. SET ASIDE the trial court's Order dated 08 August 2006 denying Private Respondent's
motion for intervention in the expropriation case, and
ii. Should this Honorable Court lend credence to the argument of the Solicitor General in
its Commentdated 20 April 2006 that "there are issues as to material fact that require
presentation of evidence", to REMAND the resolution of the legal issues raised by
Private Respondent to the trial court consistent with this Honorable Court's holding in
the Gingoyon Resolution that "the interests of the movants-in-intervention [meaning
Takenaka, Asahikosan, and herein Private Respondent] may be duly litigated in
proceedings which are extant before the lower courts."62
In essence, Baterina is opposing the expropriation proceedings on the ground that NAIA IPT III is already
public property. Hence, PIATCO is not entitled to just compensation for NAIA IPT III. He is asking the
Court to make a definitive ruling on this matter considering that it was not settled in
either Agan or Gingoyon.
We disagree. Contrary to Baterina's stance, PIATCO's entitlement to just and equitable consideration for its
construction of NAIA IPT III and the propriety of the Republic's resort to expropriation proceedings were
already recognized and upheld by this Court in Agan and Gingoyon.
The Court's Decisions in both Agan and Gingoyon had attained finality, the former on 17 February 2004 and
the latter on 17 March 2006.
This Court already made an unequivocal pronouncement in its Resolution dated 21 January 2004
in Agan that for the Government of the Republic to take over the NAIA IPT III facility, it has to compensate
PIATCO as a builder of the structures; and that "[t]he compensation must be just and in accordance with law
and equity for the government cannot unjustly enrich itself at the expense of PIATCO and its
investors."63 As between the Republic and PIATCO, the judgment on the need to compensate PIATCO
before the Government may take over NAIA IPT III is already conclusive and beyond question.
Hence, in Gingoyon, this Court declared that:
This pronouncement contains the fundamental premises which permeate this decision of the Court.
Indeed, Agan, final and executory as it is, stands as governing law in this case, and any disposition
of the present petition must conform to the conditions laid down by the Court in its
2004 Resolution.
xxxx
The pronouncement in the 2004 Resolution is especially significant to this case in two aspects,
namely: (i) that PIATCO must receive payment of just compensation determined in accordance
with law and equity; and (ii) that the government is barred from taking over NAIA 3 until such just
compensation is paid. The parties cannot be allowed to evade the directives laid down by this
Court through any mode of judicial action, such as the complaint for eminent domain.
It cannot be denied though that the Court in the 2004 Resolution prescribed mandatory guidelines
which the Government must observe before it could acquire the NAIA 3 facilities. Thus, the
actions of respondent judge under review, as well as the arguments of the parties must, to merit
affirmation, pass the threshold test of whether such propositions are in accord with the 2004
Resolution.64
The Court then, in Gingoyon, directly addressed the issue on the appropriateness of the Republic's resort to
expropriation proceedings:
The Government has chosen to resort to expropriation, a remedy available under the law, which
has the added benefit of an integrated process for the determination of just compensation and the
payment thereof to PIATCO. We appreciate that the case at bar is a highly unusual case, whereby
the Government seeks to expropriate a building complex constructed on land which the State
 already owns. There is an inherent illogic in the resort to eminent domain on property already
owned by the State. At first blush, since the State already owns the property on which NAIA 3
stands, the proper remedy should be akin to an action for ejectment.
However, the reason for the resort by the Government to expropriation proceedings is
understandable in this case. The 2004 Resolution, in requiring the payment of just compensation
prior to the takeover by the Government of NAIA 3, effectively precluded it from acquiring
possession or ownership of the NAIA 3 through the unilateral exercise of its rights as the owner of
the ground on which the facilities stood. Thus, as things stood after the 2004 Resolution, the right
of the Government to take over the NAIA 3 terminal was preconditioned by lawful order on the
payment of just compensation to PIATCO as builder of the structures.
xxxx
The right of eminent domain extends to personal and real property, and the NAIA 3 structures,
adhered as they are to the soil, are considered as real property. The public purpose for the
expropriation is also beyond dispute. It should also be noted that Section 1 of Rule 67 (on
Expropriation) recognizes the possibility that the property sought to be expropriated may be titled
in the name of the Republic of the Philippines, although occupied by private individuals, and in
such case an averment to that effect should be made in the complaint. The instant expropriation
complaint did aver that the NAIA 3 complex "stands on a parcel of land owned by the Bases
Conversion Development Authority, another agency of [the Republic of the Philippines]."
Admittedly, eminent domain is not the sole judicial recourse by which the Government may have
acquired the NAIA 3 facilities while satisfying the requisites in the 2004 Resolution. Eminent
domain though may be the most effective, as well as the speediest means by which such goals may
be accomplished. Not only does it enable immediate possession after satisfaction of the requisites
under the law, it also has a built-in procedure through which just compensation may be
ascertained. Thus, there should be no question as to the propriety of eminent domain proceedings
in this case.
Still, in applying the laws and rules on expropriation in the case at bar, we are impelled to apply or
construe these rules in accordance with the Court's prescriptions in the 2004 Resolution to achieve
the end effect that the Government may validly take over the NAIA 3 facilities. Insofar as this case
is concerned, the 2004 Resolution is effective not only as a legal precedent, but as the source of
rights and prescriptions that must be guaranteed, if not enforced, in the resolution of this petition.
Otherwise, the integrity and efficacy of the rulings of this Court will be severely
diminished.65 (Emphasis ours.)
The Court, also in Gingoyon, categorically recognized PIATCO's ownership over the structures it had built
in NAIA IPT III, to wit:
There can be no doubt that PIATCO has ownership rights over the facilities which it had financed
and constructed. The 2004 Resolution squarely recognized that right when it mandated the
payment of just compensation to PIATCO prior to the takeover by the Government of NAIA 3.
The fact that the Government resorted to eminent domain proceedings in the first place is a
concession on its part of PIATCO's ownership. Indeed, if no such right is recognized, then there
should be no impediment for the Government to seize control of NAIA 3 through ordinary
ejectment proceedings.
xxxx
Thus, the property subject of expropriation, the NAIA 3 facilities, are real property owned by
PIATCO. x x x (Emphasis ours.)66
It was further settled in Gingoyon that the expropriation proceedings shall be held in accordance with
Republic Act No. 8974,67 thus:
Unlike in the case of Rule 67, the application of Rep. Act No. 8974 will not contravene the 2004
Resolution, which requires the payment of just compensation before any takeover of the NAIA 3
409
facilities by the Government. The 2004 Resolution does not particularize the extent such payment
must be effected before the takeover, but it unquestionably requires at least some degree of
payment to the private property owner before a writ of possession may issue. The utilization of
Rep. Act No. 8974 guarantees compliance with this bare minimum requirement, as it assures the
private property owner the payment of, at the very least, the proffered value of the property to be
seized. Such payment of the proffered value to the owner, followed by the issuance of the writ of
possession in favor of the Government, is precisely the schematic under Rep. Act No. 8974, one
which facially complies with the prescription laid down in the 2004 Resolution.
And finally, as to the determination of the amount due PIATCO, this Court ruled in Gingoyon that:
Under Rep. Act No. 8974, the Government is required to "immediately pay" the owner of the
property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the
property based on the current relevant zonal valuation of the [BIR]; and (2) the value of the
improvements and/or structures as determined under Section 7. As stated above, the BIR zonal
valuation cannot apply in this case, thus the amount subject to immediate payment should be
limited to "the value of the improvements and/or structures as determined under Section 7," with
Section 7 referring to the "implementing rules and regulations for the equitable valuation of the
improvements and/or structures on the land." Under the present implementing rules in place, the
valuation of the improvements/structures are to be based using "the replacement cost
method." However, the replacement cost is only one of the factors to be considered in determining
the just compensation.
In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also mandated that the payment of
just compensation should be in accordance with equity as well. Thus, in ascertaining the ultimate
amount of just compensation, the duty of the trial court is to ensure that such amount conforms not
only to the law, such as Rep. Act No. 8974, but to principles of equity as well.
Admittedly, there is no way, at least for the present, to immediately ascertain the value of the
improvements and structures since such valuation is a matter for factual determination. Yet Rep.
Act No. 8974 permits an expedited means by which the Government can immediately take
possession of the property without having to await precise determination of the valuation. Section
4(c) of Rep. Act No. 8974 states that "in case the completion of a government infrastructure project
is of utmost urgency and importance, and there is no existing valuation of the area concerned, the
implementing agency shall immediately pay the owner of the property its proferred value, taking
into consideration the standards prescribed in Section 5 [of the law]." The "proffered value" may
strike as a highly subjective standard based solely on the intuition of the government, but Rep. Act
No. 8974 does provide relevant standards by which "proffered value" should be based, as well as
the certainty of judicial determination of the propriety of the proffered value.
In filing the complaint for expropriation, the Government alleged to have deposited the amount
of P3 Billion earmarked for expropriation, representing the assessed value of the property. The
making of the deposit, including the determination of the amount of the deposit, was undertaken
under the erroneous notion that Rule 67, and not Rep. Act No. 8974, is the applicable law. Still, as
regards the amount, the Court sees no impediment to recognize this sum of P3 Billion as the
proffered value under Section 4(b) of Rep. Act No. 8974. After all, in the initial determination of
the proffered value, the Government is not strictly required to adhere to any predetermined
standards, although its proffered value may later be subjected to judicial review using the standards
enumerated under Section 5 of Rep. Act No. 8974. 68
Gingoyon constitutes as the law of the case for the expropriation proceedings, docketed as Case No. 04-
0876CFM, before the RTC of Pasay City. Law of the case has been defined in the following manner –
By "law of the case" is meant that "whatever is once irrevocably established as the controlling
legal rule or decision between the same parties in the same case continues to be the law of the
case" so long as the "facts on which such decision was predicated continue to be the facts of the
 case before the court" (21 C.J.S. 330). And once the decision becomes final, it is binding on all
inferior courts and hence beyond their power and authority to alter or modify (Kabigting vs. Acting
Director of Prisons, G.R. L-15548, October 30, 1962).69
A ruling rendered on the first appeal, constitutes the law of the case, and, even if erroneous, it may no longer
be disturbed or modified since it has become final long ago. 70
The extensive excerpts from Gingoyon demonstrate and emphasize that the Court had already adjudged the
issues raised by Baterina, which he either conveniently overlooked or stubbornly refused to accept.
The general rule precluding the relitigation of material facts or questions which were in issue and
adjudicated in former action are commonly applied to all matters essentially connected with the subject
matter of the litigation. Thus, it extends to questions necessarily involved in an issue, and necessarily
adjudicated, or necessarily implied in the final judgment, although no specific finding may have been made
in reference thereto, and although such matters were directly referred to in the pleadings and were not
actually or formally presented. Under this rule, if the record of the former trial shows that the judgment
could not have been rendered without deciding the particular matter, it will be considered as having settled
that matter as to all future actions between the parties and if a judgment necessarily presupposes certain
premises, they are as conclusive as the judgment itself. Reasons for the rule are that a judgment is an
adjudication on all the matters which are essential to support it, and that every proposition assumed or
decided by the court leading up to the final conclusion and upon which such conclusion is based is as
effectually passed upon as the ultimate question which is finally solved. 71
Since the issues Baterina wishes to raise as an intervenor in Case No. 04-0876CFM were already settled
with finality in both Agan and Gingoyon, then there is no point in still allowing his intervention. His
Petition-in-Intervention would only be a relitigation of matters that had been previously adjudicated by no
less than the Highest Court of the land. And, in no manner can the RTC of Pasay City in Case No. 04-
0876CFM grant the reliefs he prayed for without departing from or running afoul of the final and executory
Decisions of this Court in Agan and Gingoyon.
While it is true that when this Court, in a Resolution dated 1 February 2006, dismissed the Motions for
Intervention in Gingoyon, including that of Baterina, it also observed that the interests of the movants-in-
intervention may be duly litigated in proceedings which are extant before the lower courts. This does not
mean, however, that the said movants-in-interest were assured of being allowed as intervenors or that the
reliefs they sought as such shall be granted by the trial courts. The fate of their intervention still rests on
their interest or legal standing in the case and the merits of their arguments.
WHEREFORE, in view of the foregoing:
a. The Petition in G.R. No. 169914 is hereby DISMISSED for lack of merit; and
b. The Petition in G.R. No. 174166 is hereby likewise DISMISSED for being moot and academic.
No costs.
SO ORDERED.

410
 THIRD DIVISION
G.R. No. 189239 November 24, 2010
SPOUSES LETICIA & JOSE ERVIN ABAD, SPS. ROSARIO AND ERWIN COLLANTES, SPS.
RICARDO AND FELITA ANN, SPS. ELSIE AND ROGER LAS PIÑAS, LINDA LAYDA, RESTITUTO
MARIANO, SPS. ARNOLD AND MIRIAM MERCINES, SPS. LUCITA AND WENCESLAO A.
RAPACON, SPS. ROMEO AND EMILYN HULLEZA, LUZ MIPANTAO, SPS. HELEN AND
ANTHONY TEVES, MARLENE TUAZON, SPS. ZALDO AND MIA SALES, SPS. JOSEFINA AND
JOEL YBERA, SPS. LINDA AND JESSIE CABATUAN, SPS. WILMA AND MARIO ANDRADA, SPS.
RAYMUNDO AND ARSENIA LELIS, FREDY AND SUSANA PILONEO, Petitioners,
vs.
FIL-HOMES REALTY and DEVELOPMENT CORPORATION and MAGDIWANG REALTY
CORPORATION,Respondents.
DECISION
CARPIO MORALES, J.:
Fil-Homes Realty and Development Corporation and Magdiwang Realty Corporation (respondents), co-
owners of two lots situated in Sucat, Parañaque City and covered by Transfer Certificates of Title Nos.
21712 and 21713, filed a complaint for unlawful detainer on May 7, 2003 against above-named petitioners
before the Parañaque Metropolitan Trial Court (MeTC).
Respondents alleged that petitioners, through tolerance, had occupied the subject lots since 1980 but ignored
their repeated demands to vacate them.
Petitioners countered that there is no possession by tolerance for they have been in adverse, continuous and
uninterrupted possession of the lots for more than 30 years; and that respondent’s predecessor-in-interest,
Pilipinas Development Corporation, had no title to the lots. In any event, they contend that the question of
ownership must first be settled before the issue of possession may be resolved.
During the pendency of the case or on June 30, 2004, the City of Parañaque filed expropriation proceedings
covering the lots before the Regional Trial Court of Parañaque with the intention of establishing a socialized
housing project therein for distribution to the occupants including petitioners. A writ of possession was
consequently issued and a Certificate of Turn-over given to the City.
Branch 77 of the MeTC, by Decision of March 3, 2008, rendered judgment in the unlawful detainer case
against petitioners, disposing as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants Leticia and
Ervin Abad et. als. ordering the latter and all persons claiming rights under them
to VACATE and SURRENDERpossession of the premises (Lots covered by TCT NOS. (71065) 21712 and
(71066) 21713 otherwise known as Purok I Silverio Compound, Barangay San Isidro, Parañaque City to
plaintiff and to PAY the said plaintiff as follows:
1. The reasonable compensation in the amount of ₱20,000.00 a month commencing November 20,
2002 and every month thereafter until the defendants shall have finally vacated the premises and
surrender peaceful possession thereof to the plaintiff;
2. ₱20,000.00 as and for attorney’s fees, and finally
3. Costs of suit.
SO ORDERED.1 (emphasis in the original)
The MeTC held that as no payment had been made to respondents for the lots, they still maintain ownership
thereon. It added that petitioners cannot claim a better right by virtue of the issuance of a Writ of Possession
for the project beneficiaries have yet to be named.
On appeal, the Regional Trial Court (RTC), by Decision of September 4, 2008, 2 reversed the MeTC decision
and dismissed respondents’ complaint in this wise:
x x x The court a quo ruled that the case filed by plaintiffs (respondents herein) is unlawful detainer as
shown by the allegations of the Complaint. The ruling of the court a quo is not accurate. It is not the
411
allegations of the Complaint that finally determine whether a case is unlawful detainer, rather it is
the evidence in the case.
Unlawful detainer requires the significant element of "tolerance". Tolerance of the occupation of the
property must be present right from the start of the defendants’ possession. The phrase "from the start of
defendants’ possession" is significant. When there is no "tolerance" right from the start of the
possession sought to be recovered, the case of unlawful detainer will not prosper.3 (emphasis in the original;
underscoring supplied)
The RTC went on to rule that the issuance of a writ of possession in favor of the City bars the continuation
of the unlawful detainer proceedings, and since the judgment had already been rendered in the expropriation
proceedings which effectively turned over the lots to the City, the MeTC has no jurisdiction to "disregard
the . . . final judgment and writ of possession" due to non-payment of just compensation:
The Writ of Possession shows that possession over the properties subject of this case had already been given
to the City of Parañaque since January 19, 2006 after they were expropriated. It is serious error for the court
a quo to rule in the unlawful detainer case that Magdiwang Realty Corporation and Fil-Homes Realty and
Development Corporation could still be given possession of the properties which were already expropriated
in favor of the City of Parañaque.
There is also another serious lapse in the ruling of the court a quo that the case for expropriation in the
Regional Trial Court would not bar, suspend or abate the ejectment proceedings. The court a quo had failed
to consider the fact that the case for expropriation was already decided by the Regional Trial Court, Branch
196 way back in the year 2006 or 2 years before the court a quo rendered its judgment in the unlawful
detainer case in the year 2008. In fact, there was already a Writ of Possession way back in the year 1996
(sic) issued in the expropriation case by the Regional Trial Court, Branch 196. The court a quo has no valid
reason to disregard the said final judgment and the writ of possession already issued by the Regional Trial
Court in favor of the City of Parañaque and against Magdiwang Realty Corporation and Fil-Homes Realty
Development Corporation and make another judgment concerning possession of the subject properties
contrary to the final judgment of the Regional Trial Court, Branch 196. 4 (emphasis in the original)
Before the Court of Appeals where respondents filed a petition for review, they maintained that respondents’
"act of allowing several years to pass without requiring [them] to vacate nor filing an ejectment case against
them amounts to acquiescence or tolerance of their possession."5
By Decision of May 27, 2009,6 the appellate court, noting that petitioners did not present evidence to rebut
respondents’ allegation of possession by tolerance, and considering petitioners’ admission that they
commenced occupation of the property without the permission of the previous owner ─ Pilipinas
Development Corporation ─ as indicium of tolerance by respondents’ predecessor-in-interest, ruled in favor
of respondents. Held the appellate court:
Where the defendant’s entry upon the land was with plaintiff’s tolerance from the date and fact of entry,
unlawful detainer proceedings may be instituted within one year from the demand on him to vacate upon
demand. The status of such defendant is analogous to that of a tenant or lessee, the term of whose lease, has
expired but whose occupancy is continued by the tolerance of the lessor. The same rule applies where the
defendant purchased the house of the former lessee, who was already in arrears in the payment of rentals,
and thereafter occupied the premises without a new lease contract with the landowner. 7
Respecting the issuance of a writ of possession in the expropriation proceedings, the appellate court,
citing Republic v. Gingoyon,8 held the same does not signify the completion of the expropriation
proceedings. Thus it disposed:
WHEREFORE, premises considered, the instant Petition is GRANTED. The assailed Decision of the Court
a quo is REVOKED and SET ASIDE. The Decision of the Metropolitan Trial Court dated March 3, 2008 is
hereby REINSTATED with MODIFICATION [by] deleting the award for attorney’s fees.
SO ORDERED. (underscoring supplied)
Petitioners’ motion for reconsideration was denied by Resolution dated August 26, 2009, hence, the filing of
the present petition for review.
The petition fails. In the present case, the mere issuance of a writ of possession in the expropriation proceedings did not
In the exercise of the power of eminent domain, the State expropriates private property for public use upon transfer ownership of the lots in favor of the City. Such issuance was only the first stage in expropriation.
payment of just compensation. A socialized housing project falls within the ambit of public use as it is in There is even no evidence that judicial deposit had been made in favor of respondents prior to the City’s
furtherance of the constitutional provisions on social justice.9 possession of the lots, contrary to Section 19 of the LGC.
As a general rule, ejectment proceedings, due to its summary nature, are not suspended or their resolution Respecting petitioners’ claim that they have been named beneficiaries of the lots, the city ordinance
held in abeyance despite the pendency of a civil action regarding ownership. authorizing the initiation of expropriation proceedings does not state so. 13 Petitioners cannot thus claim any
Section 1 of Commonwealth Act No. 53810 enlightens, however: right over the lots on the basis of the ordinance.
Section 1. When the Government seeks to acquire, through purchase or expropriation proceedings, lands Even if the lots are eventually transferred to the City, it is non sequitur for petitioners to claim that they are
belonging to any estate or chaplaincy (cappellania), any action for ejectment against the tenants occupying automatically entitled to be beneficiaries thereof. For certain requirements must be met and complied with
said lands shall be automatically suspended, for such time as may be required by the expropriation before they can be considered to be beneficiaries.
proceedings or the necessary negotiations for the purchase of the lands, in which latter case, the period of In another vein, petitioners posit that respondents failed to prove that their possession is by mere tolerance.
suspension shall not exceed one year. This too fails. Apropos is the ruling in Calubayan v. Pascual: 14
To avail himself of the benefits of the suspension, the tenants shall pay to the landowner the current rents as In allowing several years to pass without requiring the occupant to vacate the premises nor filing an action
they become due or deposit the same with the court where the action for ejectment has been instituted. to eject him, plaintiffs have acquiesced to defendant’s possession and use of the premises. It has been held
(emphasis and underscoring supplied) that a person who occupies the land of another at the latter’s tolerance or permission, without any contract
Petitioners did not comply with any of the acts mentioned in the law to avail of the benefits of the between them, is necessarily bound by an implied promise that he will vacate upon demand, failing which a
suspension. They nevertheless posit that since the lots are the subject of expropriation proceedings, summary action for ejectment is the proper remedy against them. The status of the defendant is analogous to
respondents can no longer assert a better right of possession; and that the City Ordinance authorizing the that of a lessee or tenant whose term of lease has expired but whose occupancy continued by tolerance of the
initiation of expropriation proceedings designated them as beneficiaries of the lots, hence, they are entitled owner. In such a case, the unlawful deprivation or withholding of possession is to be counted from the date
to continue staying there. of the demand to vacate. (emphasis and underscoring supplied)
Petitioners’ position does not lie. Respondents bought the lots from Pilipinas Development Corporation in 1983. They stepped into the shoes
The exercise of expropriation by a local government unit is covered by Section 19 of the Local Government of the seller with respect to its relationship with petitioners. Even if early on respondents made no demand
Code (LGC): or filed no action against petitioners to eject them from the lots, they thereby merely maintained the status
SEC. 19. Eminent Domain. – A local government unit may, through its chief executive and acting pursuant quo – allowed petitioners’ possession by tolerance.
to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit WHEREFORE, the petition for review is DENIED.
of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the
Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously made to the owner, and such offer was not
accepted: Provided, further, That the local government unit may immediately take possession of the property
upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least
fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the
property to be expropriated: Provided, finally, That the amount to be paid for the expropriated property shall
be determined by the proper court, based on the fair market value of the property.
Lintag v. National Power Corporation11 clearly outlines the stages of expropriation, viz:
Expropriation of lands consists of two stages:
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 with
an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to
take the property sought to be condemned, for the public use or purpose described in the complaint, upon the
payment of just compensation to be determined as of the date of the filing of the complaint x x x.
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." This is done by the court with the assistance of not more
than three (3) commissioners x x x .lavvphi1
It is only upon the completion of these two stages that expropriation is said to have been completed. The
process is not complete until payment of just compensation. Accordingly, the issuance of the writ of
possession in this case does not write finis to the expropriation proceedings. To effectuate the transfer of
ownership, it is necessary for the NPC to pay the property owners the final just compensation.12 (emphasis
and underscoring supplied)

412
 FIRST DIVISION
G.R. No. 193936 December 11, 2013
NATIONAL POWER CORPORATION, Petitioner,
vs.
YCLA SUGAR DEVELOPMENT CORPORATION, Respondent.
DECISION
REYES, J.:
Before this Court is a petition for review on certiorari1under Rule 45 of the Rules of Court seeking to annul
and set aside the Decision2 dated September 23, 2010 of the Court of Appeals (CA) in CA-G.R. CV No.
86508, which affirmed with modification the Decision 3 dated May 12, 2005 of the Regional Trial Court
(RTC) of Calapan City, Oriental Mindoro, Branch 40, in Civil Case No. R-4600.
The Facts
Petitioner National Power Corporation (NPC) is a government owned and controlled corporation created for
the purpose of undertaking the development of hydroelectric power throughout the Philippines. NPC is thus
authorized to exercise the power of eminent domain to carry out the said purpose. 4
Respondent YCLA Sugar Development Corporation (YCLA) is the registered owner of three parcels of land
situated in Puerto Galera, Oriental Mindoro, covered by Transfer Certificates of Title Nos. T-5209, T-21280
and T-78583.
In order to complete its 69 KV Calapan-Mamburao Island Grid Project in Puerto Galera, Oriental Mindoro,
NPC had to construct transmission lines that would traverse several private properties, including the said
parcels of land owned by YCLA.
Accordingly, on December 2, 1997, NPC filed a Complaint5 for expropriation with the RTC against YCLA
and several other individuals. The NPC sought the expropriation of a portion of the parcels of land owned by
the said defendants for the acquisition of an easement of right-of-way over areas that would be affected by
the construction of transmission lines. The portion of YCLA’s properties that would be affected by the
construction of NPC’s transmission lines has an aggregate area of 5,846 square meters.
YCLA filed its Answer6 dated July 9, 1998, alleging that the Complaint should be dismissed outright due to
NPC’s failure to allege the public use for the intended expropriation of its properties.
On April 30, 1999, the parties moved, inter alia, for the constitution of a Board of Commissioners to be
appointed by the RTC to determine the reasonable amount of just compensation to be paid by the NPC.
Thus, on even date, the RTC issued an order terminating the pre-trial conference and directing the
constitution of a Board of Commissioners, which would submit a report and recommendation as to the
reasonable amount of just compensation for the properties sought to be expropriated.
Meanwhile, on June 4, 1999, the RTC, acting on NPC’s urgent ex- parte motion, issued a writ of possession
placing NPC in possession of the properties sought to be expropriated.
On May 2, 2001, the Board of Commissioners submitted its Report, 7 which fixed the amount of just
compensation of the subject properties at ₱500.00 per sq m. YCLA objected to the amount recommended by
the Board of Commissioners, claiming that the amount of just compensation should be fixed at ₱900.00 per
sq m considering the improvements in their properties.
On October 19, 2001, the RTC issued an Order directing YCLA to submit its written manifestation, together
with supporting documents, on its position on the proper valuation of the subject properties. NPC was
likewise given 15 days to comment thereon. Trial on the determination of the reasonable amount of just
compensation ensued thereafter.
Consequently, YCLA filed a motion asking the RTC to direct the Board of Commissioners to conduct an
ocular inspection over the subject properties and, thereafter, amend/revise the Board of Commissioner’s
Report dated May 2, 2001. YCLA’s motion was granted by the RTC on July 25, 2003.
Meanwhile, on November 25, 2002, the RTC rendered a Partial Decision as regards the amount of just
compensation that would be paid by the NPC to the other defendants.
413
On September 15, 2003, the Board of Commissioners submitted its second Report,8 which fixed the just
compensation of the subject properties at ₱1,000.00 per sq m. The Board of Commissioners’ Report dated
September 15, 2003, in part, reads:
The undersigned secured from the office of the Provincial Assessor the actual appraised value per square
meter x x x of the Agricultural Land subject matter of the case which is [₱11.50] per square meter[.]
[H]owever, the prevailing market value is Five Hundred Pesos ([P]500.00) to One Thousand Five Hundred
Pesos ([P]1,500.00) per square meters x x x, per actual sale and opinion value of reliable persons x x x.
In view thereof, the undersigned is submitting this report to the Honorable Court that the amount of One
Thousand Pesos ([P]1,000.00) per square meter should be the basis in the computation of the price per
square meter of the land subject matter of the instant case, justified by its location on [a] strategic place and
the consequential damages to the whole properties of the defendants because the plaintiff occupied the front
portion along the highway.9
On May 12, 2005, the RTC rendered a Decision,10 which adopted the report and recommendation of the
Board of Commissioners, viz:
ACCORDINGLY, judgment is hereby rendered directing the plaintiff National Power Corporation to pay
herein defendant YCLA the total amount of [P]5,786,000.00 representing the value of the expropriated lands
owned by the said defendant and its 26 molave trees which were cut down to make way for the plaintiff[’s]
project, with legal interest from the time the plaintiff had actually took possession of the subject properties
on 19 April 1999 until full payment has been made.
SO ORDERED.11
The RTC pointed out that the Board of Commissioner’s Report dated May 2, 2001, which recommended
that the amount of just compensation be fixed at ₱500.00 per sq m, was arrived at without conducting an
ocular inspection of the subject properties. That, upon YCLA’s request, the Board of Commissioners
subsequently conducted an ocular inspection of the subject properties, which prompted them to revise their
earlier recommendation.
Unperturbed, NPC appealed the RTC Decision dated May 12, 2005 to the CA, alleging that the RTC erred
in relying on the recommendation of the Board of Commissioners as regards the amount of just
compensation. NPC claimed that the amount of ₱1,000.00 per sq m recommended by the Board of
Commissioners as the reasonable amount of just compensation, which was adopted by the RTC, is too
excessive considering that the subject properties were barren and undeveloped agricultural lands at the time
it instituted the action for expropriation.
On September 23, 2010, the CA rendered the Decision12 which affirmed with modification the RTC
Decision dated May 12, 2005, thus:
WHEREFORE, the assailed Decision is AFFIRMED with the MODIFICATION only in so far as the value
of just compensation for the property involved is concerned. Resultantly, the herein appellant is ordered to
pay YCLA Sugar Development Corporation the award of [P]900.00 per square meter, as and by way of just
compensation for the expropriated property. Costs against the herein appellant.
SO ORDERED.13
The CA held that the RTC’s determination of the amount of just compensation was reasonable
notwithstanding that it was merely based on the Report submitted by the Board of Commissioners. The RTC
pointed out that there was no showing that the said Report was tainted with irregularity, fraud or bias.
Nevertheless, the CA modified the award rendered by the RTC, by fixing the amount of just compensation
to ₱900.00 per sq m instead of ₱1,000.00 per sq m, since YCLA only sought an award of ₱900.00 per sq m
as just compensation for the subject properties in the proceedings before the RTC.
The Issue
Essentially, the issue presented to the Court for resolution is whether the RTC and the CA had sufficient
basis in arriving at the questioned amount of just compensation of the subject properties.
The NPC posits that the Board of Commissioners’ Report dated September 15, 2003 lacks factual basis; that
both the RTC and the CA erred in giving credence to the Report dated September 15, 2003 as to the
recommended amount of just compensation for the subject properties. NPC maintains that the amount of market value of the property, the value of like properties. Thus, it becomes imperative that the
₱900.00 per sq m that was fixed by the CA as just compensation is excessive considering that the subject commissioners’ report of land prices be supported by pertinent documents, which impelled the
properties were barren and undeveloped agricultural lands at the time it filed the complaint for commissioners to arrive at the recommended amount for the condemned properties, to aid the court in its
expropriation. Thus, NPC prayed that the Court fix the amount of just compensation for the subject determination of the amount of just compensation. Otherwise, the commissioner’s report becomes hearsay
properties at ₱500.00 per sq m pursuant to the Board of Commissioners’ Report dated May 2, 2001. and should thus not be considered by the court.
On the other hand, YCLA contends that the RTC and the CA aptly relied on the Board of Commissioners’ The trial court, in expropriation cases, may accept or reject, whether in whole or in part, the report submitted
Report dated September 15, 2003, pointing out that the Board of Commissioners was in the best position to by the Board of Commissioners, which is merely advisory and recommendatory in character.1âwphi1 It may
determine the amount of just compensation considering that its members undertook intensive ocular also recommit the report or set aside the same and appoint new commissioners. 19 In this case, the lower
inspection of the subject properties. courts gave full faith and credence to the Board of Commissioners' Report dated September 15, 2003
The Court’s Ruling notwithstanding that it was not supported by any documentary evidence.
The petition is partly meritorious. Considering that the legal basis for the determination of just compensation for the subject properties is
In expropriation proceedings, just compensation is defined as the full and fair equivalent of the property insufficient, the respective Decisions of the RTC and the CA should be set aside.
taken from its owner by the expropriator. The measure is not the taker’s gain, but the owner’s loss. The Nevertheless, the Court cannot fix the amount of just compensation for the subject properties at ₱500.00 per
word "just" is used to intensify the meaning of the word "compensation" and to convey thereby the idea that sq m pursuant to the Board of Commissioners' Report dated May 2, 2001. The said Report suffers from the
the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample. The same infirmity as the Report dated September 15, 2003 - it is unsupported by any documentary evidence and
constitutional limitation of "just compensation" is considered to be a sum equivalent to the market value of its recommendation as regards the amount of just compensation are based on the prevailing market value of
the property, broadly defined as the price fixed by the seller in open market in the usual and ordinary course the subject properties in 2001.
of legal action and competition; or the fair value of the property; as between one who receives and one who WHEREFORE, in consideration of the foregoing disquisitions, the instant petition is PARTIALLY
desires to sell it, fixed at the time of the actual taking by the government. 14 GRANTED. The Decision dated September 23, 2010 of the Court of Appeals in CA-G.R. CV No. 86508
It is settled that the amount of just compensation is to be ascertained as of the time of the taking, which and the Decision dated May 12, 2005 of the Regional Trial Court of Calapan City, Oriental Mindoro,
usually coincides with the commencement of the expropriation proceedings. Where the institution of the Branch 40, in Civil Case No. R-4600 are hereby SET ASIDE. This case is remanded to the trial court for the
action precedes entry into the property, the amount of just compensation is to be ascertained as of the time proper determination of just compensation, in conformity with this Decision.
of the filing of the complaint.15 SO ORDERED.
In this case, in arriving at the amount of just compensation, both the RTC and the CA relied heavily on the
Board of Commissioners’ Report dated September 15, 2003, which, in turn, was arrived at after conducting
an ocular inspection of the subject properties on August 27, 2003. However, the Board of Commissioners’
recommendation as to the amount of just compensation was based on the prevailing market value of the
subject properties in 2003. What escaped the attention of the lower courts is that the prevailing market value
of the subject properties in 2003 cannot be used to determine the amount of just compensation considering
that the Complaint for expropriation was filed by NPC on December 2, 1997.
Further, the Court notes that the Board of Commissioners, in its Report dated September 15, 2003, merely
alleged that its members arrived at the amount of ₱1,000.00 per sq m as just compensation for the subject
properties based on actual sales, presumably of surrounding parcels of land, and on the opinion of "reliable
persons" that were interviewed. However, the Report dated September 15, 2003 is not supported by any
corroborative documents such as sworn declarations of the "reliable persons" that were supposedly
interviewed.
The Court has consistently ruled that just compensation cannot be arrived at arbitrarily; several factors must
be considered such as, but not limited to, acquisition cost, current market value of like properties, tax value
of the condemned property, its size, shape, and location. But before these factors can be considered and
given weight, the same must be supported by documentary evidence. 16 The amount of just compensation
could only be attained by using reliable and actual data as bases for fixing the value of the condemned
property. A commissioners’ report of land prices which is not based on any documentary evidence is
manifestly hearsay and should be disregarded by the court. 17
Under the Rules of Court, any evidence – whether oral or documentary – is hearsay if its probative value is
not based on the personal knowledge of the witness, but on that of some other person who is not on the
witness stand.18
A commissioners’ report of land prices is considered as evidence in the determination of the amount of just
compensation due the land owner in expropriation cases. The recommended amount of just compensation
contained in the commissioners’ report of land prices, in turn, is based on various factors such as the fair

414
 EN BANC
G.R. No. 158464, August 02, 2016
JOCELYN S. LIMKAICHONG, Petitioner, v. LAND BANK OF THE PHILIPPINES,
DEPARTMENT OF AGRARIAN REFORM, REPRESENTED BY THE SECRETARY OF
AGRARIAN REFORM, THROUGH THE PROVINCIAL AGRARIAN REFORM
OFFICER, Respondents.
DECISION
BERSAMIN, J.:
Being now assailed in this appeal are the decision promulgated by the Court of Appeals (CA) on November
22, 2002 (dismissing the petitioner's petition for certiorari for not being the proper remedy, thereby
affirming the dismissal of Civil Case No. 12558 by the trial court on the ground of the valuation by the
Department of Agrarian Reform (DAR) having already become final due to her failure as the landowner to
bring her action for judicial determination of just compensation within 15 days from notice of such
valuation),1 and the resolution promulgated on June 2, 2003 (denying her motion for
reconsideration).2chanrobleslaw
Antecedents
The petitioner was the registered owner of agricultural lands with a total area of 19.6843 hectares situated in
Villegas, Guihulngan, Negros Oriental and covered by Original Certificate of Title No. (OCT) FV-34400,
OCT No. 34401, OCT No. 34402, and OCT No. 34403, all of the Register of Deeds of Negros Oriental. For
purposes of placing those lands within the coverage of Republic Act No. 6657 (R.A. No, 6657),3 the
Department of Agrarian Reform Adjudication Board (DARAB), Office of the Provincial Adjudicator, in
Dumaguete City sent to her in 1998 several Notices of Land Valuation and Acquisition by which her lands
were valued for acquisition by the DAR as follows:ChanRoblesVirtualawlibrary
1. OCT FV-34400- P177,074.93;4
2. OCTFV-34401- P171,061.11;5
3. OCTFV-34402- P167,626.62;6 and
4. OCTFV-34403- P140,611.65.7
After the petitioner rejected such valuation of her lands, the DARAB conducted summary administrative
proceedings for the determination of just compensation.8 On May 28, 1999, the DARAB issued its order
affirming the valuation of the lands upon finding the valuation consistent with existing administrative
guidelines on land valuation.9chanrobleslaw
On August 19, 1999, the petitioner filed in the Regional Trial Court (RTC) in Dumaguete City a complaint
for the fixing of just compensation for her lands, 10 impleading as defendant the Land Bank of the Philippines
(LBP) and the DAR, represented by the DAR Secretary, through the Dumaguete Provincial Agrarian
Reform Officer (PARO). Her complaint, docketed as Civil Case No. 12558, prayed that the DARAB
valuation be set aside and declared null and void, and that in its stead the price of her lands be fixed based
415
on the fair market value thereof.
After filing their answer, the respondents filed a manifestation and motion to dismiss, 11 stating that the
petitioner's failure to timely appeal the May 28, 1999 DARAB order had rendered the order final and
executory pursuant to Section 5112 of R.A. No. 6657. They attached to the motion to dismiss a June 23, 2000
certification of finality issued by the Clerk of the DARAB, 13 stating that the May 28, 1999 order had become
final and executory because there had been no appeal filed within the reglementary period provided by law.
In her opposition to the respondents' motion to dismiss, 14 the petitioner admitted that Civil Case No, 12558
was filed beyond the reglementary period, but insisted that the RTC sitting as special agrarian court (SAC)
was not barred from acquiring jurisdiction over the complaint for determination of just compensation,
because her cause of action was anchored on the respondents' violation of her right to due process and their
taking of her property without just compensation due to the DARAB valuation being too low and having
been arbitrarily arrived at. She claimed that the RTC as the SAC should accord her the same treatment it had
accorded to other landowners who had been given the chance to be heard on their claim for re-valuation
despite the belated filing of their complaints for just compensation.
On June 7, 2001, the RTC as the SAC granted the respondents' motion to dismiss. 15 Citing Section 51 and
Section 5416 of R.A. No. 6657 and Section 11 of Rule XIII of the 1994 DARAB Rules of Procedure, 17it held
that the petitioner's complaint should have been filed within 15 days from notice of the assailed order. It
dismissed her argument that the case was anchored on violations of her constitutional rights to due process
and just compensation, declaring that the controlling ruling was Philippine Veterans Bank v. Court of
Appeals,18 not Republic v. Court of Appeals.19 Thus, applying the ruling in Philippine Veterans Bank, the
RTC concluded that dismissal was proper because she had filed Civil Case No. 12558 beyond the statutory
15-day period.
The petitioner moved for reconsideration,20 but to no avail.
Thus, on October 22, 2001, the petitioner brought her petition for certiorari in the CA assailing the
dismissal of Civil Case No. 12558.
On November 22, 2002, the CA rendered its decision affirming the dismissal of Civil Case No. 12558,
opining that because the June 7, 2001 order of the RTC dismissing Civil Case No. 12558 was a final order,
the petitioner's remedy was not the special civil action for certiorari but an appeal in the CA; that she chose
the wrong remedy because certiorari could not take the place of an appeal; and that the RTC thus committed
no grave abuse of discretion that warranted the issuance of the writ of certiorari.
Issue
The petitioner raises the following issue for resolution:ChanRoblesVirtualawlibrary
WHETHER OR NOT ON THE QUESTION OF CONSTITUTIONAL RIGHT TO EQUAL PROTECTION
OF LAW, THE COURT OF APPEALS DECISION DATED NOVEMBER 22, 2002 RULING THAT THE
PETITION FOR CERTIORARI WAS NOT THE PROPER REMEDY IS CONTRARY TO THE LAW
AND JURISPRUDENCE AS APPLIED TO THE EVIDENCE ON RECORD.21chanroblesvirtuallawlibrary
The petitioner argues that she is entitled to equal protection and treatment accorded by the very same trial
court to other landowners whose landholdings were placed under agrarian reform coverage, listing the cases
involving other landowners who had been given the chance to be heard on their claim for re-valuation by the
trial court.22 She justifies her resort to certiorari by claiming that the RTC, in dismissing Civil Case No.
12558, acted whimsically and arbitrarily, and gravely abused its discretion; and that certiorari was
necessary to prevent irreparable damage and injury to her resulting from the acquisition by the State of her
lands based on wrongful valuation and without paying her the proper and just compensation.
In their respective comments,23 the respondents counter that the petitioner's reliance on the equal protection
clause of the fundamental law is misplaced and bereft of legal and factual basis; that, on the contrary, they
faithfully performed their task in relation to her landholdings, and in accordance with the agrarian laws and
guidelines issued in furtherance thereof; that the final and executory DARAB valuation should no longer be
disturbed by her frivolous claim of lack of due process; that her failure to properly observe the rules of
procedure relative to reglementary periods should not be concealed by a trivial claim of violation of her
constitutional rights; that pursuant to Section 60 24 of RA 6657, the decision became final because an appeal
by petition for review was not taken from the decision of the RTC as the SAC within 15 days from notice of
the decision; and that there was no proof of service on the CA of a copy of the petition as required by
Section 3, Rule 45 of the Rules of Court and Circular No, 19-91, thereby warranting the outright dismissal of
the petition.
Ruling of the Court
The petition for review is meritorious.
I of whether the courts or the DAR should have the final say on just compensation, the conflict has continued,
Certiorari was a proper remedy despite the availability of appeal
The CA ruled that the proper remedy of the petitioner was not to bring the petition for certiorari but to
appeal the dismissal of Civil Case No. 12558 in accordance with the Rules of Court; and that appeal as her
proper remedy was already time-barred.
Ostensibly, the assailed dismissal by the RTC was an order that had finally disposed of Civil Case No.
12558; hence, the petitioner's proper recourse therefrom was an appeal taken in due course because the order
of dismissal was a final disposition of the case.25cralawred In that situation, certiorari would not have been
appropriate.
However, the petitioner would not be prevented from assailing the dismissal by petition
for certiorariprovided her resort complied with the requirements of the Rules of Court for the bringing of the
petition for certiorari. In that regard, the following requisites must concur for certiorari to prosper, namely:
(1) the writ is directed against a tribunal, a board or any officer exercising judicial or quasi-judicial
functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plainj
speedy and adequate remedy in the ordinary course of law. 26Without jurisdiction means that the court acted
with absolute lack of authority. There is excess of jurisdiction when the court transcends its power or acts
without any statutory authority, Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as to be equivalent to lack or excess of jurisdiction; in other words, power - is exercised in an
arbitrary or despotic manner by reason of passion, prejudice, or personal hostility; and such exercise is so
patent or so gross as to amount to an evasion of a positive duty or to a virtual refusal either to perform the
duty enjoined or to act at all in contemplation of law. 27chanrobleslaw
Indeed, the Court has held that the availability of an appeal as a remedy is a bar to the bringing of the
petition for certiorari only where such appeal is in itself a sufficient and adequate remedy, in that it will
promptly relieve the petitioner from the injurious effects of the judgment or final order complained of. 28The
Court does not hesitate or halt on its tracks in granting the writ of certiorari to prevent irreparable damage
and injury to a party in cases where the trial judge capriciously and whimsically exercised his judgment, or
where there may be a failure of justice;29 or where the assailed order is a patent nullity; or where the grant of
416
the writ of certiorari will arrest future litigations; or for certain considerations, such as public welfare and
public policy.30chanrobleslaw
Here, the petitioner laments that she had not been accorded equal protection and treatment by the trial court
which had awarded to other landowners a higher valuation of their property despite the belated filing of their
petitions. For sure, the petition for certiorari thereby plainly alleged that the RTC had committed grave
abuse of discretion by violating the petitioner's constitutional right to due process or equal protection. Such a
petition should not be forthwith dismissed but should be fully heard if only to ascertain and determine if the
very serious allegations were true.
II
Dismissal of petitioner's action was unfair and improper
Section 9, Article III of the 1987 Constitution provides that "[p]rivate property shall not be taken for public
use without just compensation." The determination of just compensation has been the subject of various
discordant rulings of the Court. Although some of the later rulings have supposedly settled the controversy
and has caused some confusion to the Bench and the Bar, as well as to the other stakeholders in the
expropriation of agricultural landholdings.
Under existing law and regulation, respondent LBP is tasked with the responsibility of initially determining
the value of lands placed under land reform and the just compensation to be paid the landowners for their
taking.31 By way of notice sent to the landowner pursuant to Section 16(a)32 of R.A. No. 6657, the DAR
makes an offer to acquire the land sought to be placed under agrarian reform. If the concerned landowner
rejects the offer, a summary administrative proceeding is held, and thereafter the provincial adjudicator
(PARAD), the regional adjudicator (RARAD) or the central adjudicator (DARAB), as the case may be, fixes
the price to be paid for the land, based on the various factors and criteria as determined by law or regulation.
Should the landowner disagree with the valuation, he/she may bring the matter to the RTC acting as the
SAC.33 This is the procedure for the determination of just compensation under R.A. No,
6657.34chanrobleslaw
There appears to be no question on the respondents' observance of the proper procedure for acquisition of
the petitioner's lands. The remaining issue concerns whether the trial court's dismissal of her petition
because of her failure to file it before the decision/order of the DARAB became final and executory pursuant
to Section 51 of R.A, No. 6657 was fair and proper.
We rule in the negative.
There have been divergent rulings on whether the courts or another agency of the government could address
the determination of just compensation in eminent domain, but the starting point is the landmark 1987 ruling
in Export Processing Zone Authority (EPZA) v. Dulay,35 which resolved the challenge against several
decrees promulgated by President Marcos. The decrees provided certain measures to the effect that the just
compensation for property under expropriation should be either the assessment of the property by the
Government or the sworn valuation of the property by the owner, whichever was lower. In declaring the
decrees unconstitutional, the Court cogently held:ChanRoblesVirtualawlibrary
The method of ascertaining just compensation under the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this
Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would still have the power to determine
the just compensation for the property, following the applicable decrees, its task would be relegated to
simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary
consequence, it would be useless for the court to appoint commissioners under Rule 67 of the Rules of
Court. Moreover, the need to satisfy the due process clause in the taking of private property is seemingly
fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking. However, the
strict application of the decrees during the proceedings would be nothing short of a mere formality or
charade as the court has only to choose between the valuation of the owner and that of the assessor, and its
choice is always limited to the lower of the two. The court cannot exercise its discretion or independence in
determining what is just and fair. Even a grade school pupil could substitute for the judge insofar as the
determination of constitutional just compensation is concerned.
xxxx
In the present petition, we are once again confronted with the same question of whether the courts under
P.D. No. 1533, which contains the same provision on just compensation as its predecessor decrees, still have
the power and authority to determine just compensation, independent of what is stated by the decree and to
this effect, to appoint commissioners for such purpose.
This time we answer in the affirmative.
xxxx
It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the property, after evidence and
arguments pro and con have been presented, and after all factors and considerations essential to a fair and
just determination have been judiciously evaluated.36chanroblesvirtuallawlibrary
The Court has reiterated EPZA v. Dulay in its later decisions, stressing that such determination was the
function of the courts of justice that no other branch or official of the Government could usurp.
Upon the effectivity of R.A, No, 6657 in 1988, the DAR, as the central implementing agency of the law,
promulgated the DARAB Rules of Procedures in 1989, 1994, 2003, and 2009 pursuant to the provisions of
Section 4937 and Section 5038 of R.A. No. 6657 vesting it with the power to issue rules and regulations,
whether substantive or procedural, to carry out the objects and purposes of the CARL, Moreover, Section 57
of the CARL defines the jurisdiction of the RTC sitting as the SAC, viz.:ChanRoblesVirtualawlibrary
Section 57. Special Jurisdiction - The Special Agrarian Courts shall have original and exclusive jurisdiction
over all petitions for the determination of just compensation to landowners, and the prosecution of all
criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special
Agrarian Courts unless modified by this Act.
The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty
(30) days from submission of the case for decision.
Republic v. Court of Appeals,39 which was principally relied upon by the petitioner herein, reiterated that the
determination of just compensation for the taking of lands under the CARL was a power vested in the courts
and not in administrative agencies, clarifying that the jurisdiction of the SAC was not appellate but original
and exclusive, to wit:ChanRoblesVirtualawlibrary
417
Apart from the fact that only a statute can confer jurisdiction on courts and administrative agencies — rules
of procedure cannot — it is noteworthy that the New Rules of Procedure of the DARAB, which was adopted
on May 30, 1994, now provide that in the event a landowner is not satisfied with a decision of an agrarian
adjudicator, the landowner can bring the matter directly to the Regional Trial Court sitting as Special
Agrarian Court. Thus Rule XIII, §11 of the new rules provides:ChanRoblesVirtualawlibrary
§11. Land Valuation and Preliminary Determination and Payment of Just Compensation. - The decision of
the Adjudicator on land valuation and preliminary determination and payment of just compensation shall not
be appealable to the Board but shall be brought directly to the Regional Trial Courts designated as Special
Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be entitled to
only one motion for reconsideration.
This is an acknowledgment by the DARAB that the decision of just compensation cases for the taking of
lands under R.A. No. 6657 is a power vested in the courts.
xxxx
xxx. In accordance with it, the private respondent's case was properly brought by it in the RTC, and it was
error for the latter court to have dismissed the case. In the terminology of §57, the RTC, sitting as a Special
Agrarian Court, has "original and exclusive jurisdiction over all petitions for the determination of just
compensation to landowners." It would subvert this "original and exclusive" jurisdiction of the RTC for the
DAR to vest original jurisdiction in compensation cases in administrative officials and make the RTC an
appellate court for the review of administrative decisions.
Consequently, although the new rules speak of directly appealing the decision of adjudicators to the RTCs
sitting as Special Agrarian Courts, it is clear from §57 that the original and exclusive jurisdiction to
determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to
convert the original jurisdiction of the RTCs into appellate jurisdiction would be contrary to §57 and
therefore would be void. What adjudicators are empowered to do is only to determine in a preliminary
manner the reasonable compensation to be paid to landowners, leaving to the courts the ultimate power to
decide this question.40chanroblesvirtuallawlibrary
In the January 18, 2000 ruling in Philippine Veterans Bank,41 the Court, through Justice Vicente V.
Mendoza who had penned Republic v. Court of Appeals, upheld the DARAB rule to the effect that the
adjudicator's preliminary determination of just compensation must be brought to the SAC within 15 days
from receipt of the notice thereof; otherwise, the parties would be concluded by the result. The Court then
declared:ChanRoblesVirtualawlibrary
As we held in Republic v. Court of Appeals, this rule is an acknowledgment by the DARAB that the power
to decide just compensation cases for the taking of lands under R.A. No, 6657 is vested in the courts. It is
error to think that, because of Rule XIII, §11, the original and exclusive jurisdiction given to the courts to
decide petitions for determination of just compensation has thereby been transformed into an appellate
jurisdiction. It only means that, in accordance with settled principles of administrative law, primary
jurisdiction is vested in the DAR as an administrative agency to determine in a preliminary manner the
reasonable compensation to be paid for the lands taken under the Comprehensive Agrarian Reform Program,
but such determination is subject to challenge in the courts.
The jurisdiction of the Regional Trial Courts is not any less "original and exclusive" because the question is
first passed upon by the DAR, as the judicial proceedings are not a continuation of the administrative
determination. For that matter, the law may provide that the decision of the DAR is final and unappealable.
Nevertheless, resort to the courts cannot be foreclosed on the theory that courts are the guarantors of the
legality of administrative action.
Accordingly, as the petition in the Regional Trial Court was filed beyond the 15-day period provided in Rule
XIII, §11 of the Rules of Procedure of the DARAB, the trial court correctly dismissed the case and the Court
of Appeals correctly affirmed the order of dismissal.42chanroblesvirtuallawlibrary
However, in the 2007 ruling in Land Bank v. Suntay,43 the Court opined that the RTC erred in dismissing the
Land Bank's petition for determination of just compensation on the ground that it was filed beyond the 15-
day period provided in Section 11, Rule XIII of the DARAB New Rules of Procedure. This Court then
emphatically reminded that the SAC's jurisdiction over petitions for the determination of just compensation
was original and exclusive; that any effort to transfer such jurisdiction to the adjudicators of the DARAB
and to convert the original jurisdiction of the RTC into appellate jurisdiction was void for being contrary to
R.A, No. 6657; and that what DARAB adjudicators were empowered to do was only to determine in a
preliminary manner the reasonable compensation to be paid to the landowners, leaving to the courts the
ultimate power to decide this question.44chanrobleslaw
To purge any uncertainties brought about by the conflicting jurisprudence on the matter, this Court held in
its July 31, 2008 resolution in Land Bank v. Martinez:45
On the supposedly conflicting pronouncements in the cited decisions, the Court reiterates its ruling in this
case that the agrarian reform adjudicator's decision on land valuation attains finality after the lapse of
the 15-day period stated in the DARAB Rules. The petition for the fixing of just compensation should
therefore, following the law and settled jurisprudence, be filed with the SAC within the said
period.This conclusion, as already explained in the assailed decision, is based on the doctrines laid down
in Philippine Veterans Bank v. Court of Appeals and Department of Agrarian Reform Adjudication Board v.
Lubrica.
xxxx
The Court notes that the Suntay ruling is based on Republic of the Philippines v. Court of Appeals, decided
in 1996 also through the pen of Justice Vicente V. Mendoza. In that case, the Court emphasized that the
jurisdiction of the SAC is original and exclusive, not appellate. Republic, however, was decided at a time
when Rule XIII, Section 11 was not yet present in the DARAB Rules. Further, Republic did not discuss
whether the petition filed therein for the fixing of just compensation was filed out of time or not. The Court
merely decided the issue of whether cases involving just compensation should first be appealed to the
DARAB before the landowner can resort to the SAC under Section 57 of R.A. No. 6657.
It remains uncontested that the petitioner filed her complaint in the RTC for the determination of just
compensation after more than two and a half months had already elapsed from the time the DARAB issued
the assailed valuation. Following the pronouncement in Philippine Veterans Banks, her failure to file the
complaint within the prescribed 15-day period from notice would have surely rendered the DARAB's
valuation order final and executory. As such, it would seem that there was sufficient ground for the
dismissal of the petitioner's complaint for having been filed out of time.
However, we cannot fairly and properly hold that the petitioner's complaint for the determination of just
compensation should be barred from being tried and decided on that basis. The prevailing rule at the time
she filed her complaint on August 19, 1999 was that enunciated in Republic v. Court of Appeals on October
30, 1996.47 The pronouncement in Philippine Veterans Bank was promulgated on January 18, 2000 when the
trial was already in progress in the RTC, At any rate, it would only be eight years afterwards that the Court
en banc unanimously resolved the jurisprudential conundrum through its declaration in Land Bank v.
Martinez that the better rule was that enunciated in Philippine Veterans Bank, The Court must, therefore,
prospectively apply Philippine Veterans Bank. The effect is that the petitioner's cause of action for the
proper valuation of her expropriated property should be allowed to proceed. Hence, her complaint to recover
just compensation was properly brought in the RTC as the SAC, whose dismissal of it upon the motion of
Land Bank should be undone.
WHEREFORE, we GRANT the petition for review on certiorari, and REVERSE the decision of the
Court of Appeals dated November 22, 2002; and DIRECT the Regional Trial Court, Branch 30, in
Dumaguete City to resume the proceedings in Civil Case No. 12558 for the determination of just
compensation of petitioner Jocelyn S. Limkaichong's expropriated property.
No pronouncement on costs of suit.
SO ORDERED.chanroblesvirtuallawlibrary

To resolve the conflict in the rulings of the Court, we now declare herein, for the guidance of the bench and
the bar, that the better rule is that stated in Philippine Veterans Bank, reiterated in Lubrica and in the August
14, 2007 Decision in this case. Thus, while a petition for the fixing of just compensation with the SAC is
not an appeal from the agrarian reform adjudicator's decision but an original action, the same has to be
filed within the 15-day period stated in the DARAB Rules; otherwise, the adjudicator's decision will attain
finality. This rule is not only in accord with law and settled jurisprudence but also with the principles of
justice and equity. Verily, a belated petition before the SAC, e.g., one filed a month, or a year, or even a
decade after the land valuation of the DAR adjudicator, must not leave the dispossessed landowner in a state
of uncertainty as to the true value of his property.46 (Emphasis supplied)
In all of the foregoing rulings of the Court as well as in subsequent ones, it could not have been
overemphasized that the determination of just compensation in eminent domain is a judicial function.
However, the more recent jurisprudence uphold the preeminence of the pronouncement in Philippine
Veterans Bank to the effect that the parties only have 15 days from their receipt of the decision/order of the
DAR within which to invoke the original and exclusive jurisdiction of the SAC; otherwise, the
decision/order attains finality and immutability.

418

FIRST DIVISION
G.R. No. 198800 December 11, 2013
JOSE T. RAMIREZ, Petitioner,
vs.
THE MANILA BANKING CORPORATION, Respondent.
DECISION
VILLARAMA, JR., J.:
We have consistently held that unless the parties stipulate, personal notice to the mortgagor in extrajudicial
foreclosure proceedings is not necessary because Section 3 1 of Act No. 31352 only requires the posting of
the notice of sale in three public places and the publication of that notice in a newspaper of general
circulation.3
Before us is a petition for review on certiorari under Rule 45 of the Decision4 dated November 26, 2010 and
Resolution5 dated September 28, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 80616.
The facts of the case are as follows:
Petitioner Jose T. Ramirez mortgaged two parcels of land located at Bayanbayanan, Marikina City and
covered by Transfer Certificate of Title (TCT) Nos. N-107226 and N-230337 in favor of respondent The
Manila Banking Corporation to secure his ₱265,000 loan. The real estate mortgage provides that all
correspondence relative to the mortgage including notifications of extrajudicial actions shall be sent to
petitioner Ramirez at his given address, to wit:
N) All correspondence relative to this MORTGAGE, including demand letters, summons, subpoenas or
notifications of any judicial or extrajudicial actions shall be sent to the MORTGAGOR at the address given
above or at the address that may hereafter be given in writing by the MORTGAGOR to the MORTGAGEE,
and the mere act of sending any correspondence by mail or by personal delivery to the said address shall be
valid and effective notice to the MORTGAGOR for all legal purposes and the fact that any communication
is not actually received by the MORTGAGOR, or that it has been returned unclaimed to the MORTGAGEE,
or that no person was found at the address given, or that the address is fictitious or cannot be located, shall
not excuse or relieve the MORTGAGOR from the effects of such notice.8
Respondent filed a request for extrajudicial foreclosure of real estate mortgage 9 before Atty. Hipolito Sañez
on the ground that Ramirez failed to pay his loan despite demands. During the auction sale on September 8,
1994, respondent was the only bidder for the mortgaged properties. 10 Thereafter, a certificate of sale11 was
issued in its favor as the highest bidder.
In 2000, respondent demanded that Ramirez vacate the properties. 12
Ramirez sued respondent for annulment of sale and prayed that the certificate of sale be annulled on the
ground, among others, that paragraph N of the real estate mortgage was violated for he was not notified of
the foreclosure and auction sale.13
In its answer, respondent claimed that the foreclosure proceedings were valid.
The trial court ruled that the extrajudicial foreclosure proceedings were null and void and the certificate of
sale is invalid. The fallo of the Decision14 dated June 30, 2003 of the Regional Trial Court, Branch 193,
Marikina City, in Civil Case No. 2001-701-MK reads:
Premises considered, judgment is hereby rendered in favor of the plaintiff [Ramirez] and against the
defendant [bank], whose counterclaim is hereby dismissed, declaring the Certificate of Sale of the properties
covered by TCT Nos. N-10722 and N-23033, as null and void and ordering the defendant [bank] to pay the
following:
1) One Hundred Thousand (₱100,000.00) Pesos as moral damages;
2) Fifty Thousand (₱50,000.00) Pesos as exemplary damages;
3) Fifty Thousand (₱50,000.00) Pesos as Attorney’s fees; and
4) Costs of suit.
419
SO ORDERED.15
The CA reversed the trial court’s decision and ruled that absence of personal notice of foreclosure to
Ramirez as required by paragraph N of the real estate mortgage is not a ground to set aside the foreclosure
sale.16 The fallo of the assailed CA Decision reads:
WHEREFORE, the appealed decision dated June 30, 2003 of the Regional Trial Court of Marikina, Branch
193 is hereby REVERSED and SET ASIDE, and a new one is entered AFFIRMING the validity of the
Certificate of Sale of the properties covering TCT Nos. N-10722 and N-23033.
SO ORDERED.17
Ramirez’s motion for reconsideration was denied in the assailed CA Resolution.
Hence, this petition raising a lone issue:
What is the legal effect of violating paragraph N of the deed of mortgage which requires personal notice to
the petitioner-mortgagor by the respondent-mortgagee bank?18
Ramirez insists that the auction sale as well as the certificate of sale issued to respondent are null and void
since no notice of the foreclosure and sale by public auction was personally given to him in violation of
paragraph N of the real estate mortgage which requires personal notice to him of said extrajudicial
foreclosure.19
In its comment, respondent counters that under Section 3 of Act No. 3135, no personal notice to the
mortgagor is required in case of a foreclosure sale. The bank claims that paragraph N of the real estate
mortgage does not impose an additional obligation to it to provide personal notice to the mortgagor
Ramirez.20
We agree with Ramirez and grant his petition.
The CA erred in ruling that absence of notice of extrajudicial foreclosure sale to Ramirez as required by
paragraph N of the real estate mortgage will not invalidate the extrajudicial foreclosure sale. We rule that
when respondent failed to send the notice of extrajudicial foreclosure sale to Ramirez, it committed a
contractual breach of said paragraph N sufficient to render the extrajudicial foreclosure sale on September 8,
1994 null and void. Thus, we reverse the assailed CA Decision and Resolution.
In Carlos Lim, et al. v. Development Bank of the Philippines,21 we held that unless the parties stipulate,
personal notice to the mortgagor in extrajudicial foreclosure proceedings is not necessary because Section 3
of Act No. 3135 only requires the posting of the notice of sale in three public places and the publication of
that notice in a newspaper of general circulation. In this case, the parties stipulated in paragraph N of the real
estate mortgage that all correspondence relative to the mortgage including notifications of extrajudicial
actions shall be sent to mortgagor Ramirez at his given address. Respondent had no choice but to comply
with this contractual provision it has entered into with Ramirez. The contract is the law between them.
Hence, we cannot agree with the bank that paragraph N of the real estate mortgage does not impose an
additional obligation upon it to provide personal notice of the extrajudicial foreclosure sale to the mortgagor
Ramirez.
As we explained in Metropolitan Bank v. Wong,22 the bank’s violation of paragraph N of the real estate
mortgage is sufficient to invalidate the extrajudicial foreclosure sale:
[A] contract is the law between the parties and … absent any showing that its provisions are wholly or in
part contrary to law, morals, good customs, public order, or public policy, it shall be enforced to the letter by
the courts. Section 3, Act No. 3135 reads:
"Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least three
public places of the municipality or city where the property is situated, and if such property is worth more
than four hundred pesos, such notice shall also be published once a week for at least three consecutive
weeks in a newspaper of general circulation in the municipality and city."
The Act only requires (1) the posting of notices of sale in three public places, and (2) the publication of the
same in a newspaper of general circulation. Personal notice to the mortgagor is not necessary. Nevertheless,
the parties to the mortgage contract are not precluded from exacting additional requirements. In this case,
petitioner and respondent in entering into a contract of real estate mortgage, agreed inter alia:
"all correspondence relative to this mortgage, including demand letters, summonses, subpoenas, or
notifications of any judicial or extra-judicial action shall be sent to the MORTGAGOR…."
Precisely, the purpose of the foregoing stipulation is to apprise respondent of any action which petitioner
might take on the subject property, thus according him the opportunity to safeguard his rights. When
petitioner failed to send the notice of foreclosure sale to respondent, he committed a contractual breach
sufficient to render the foreclosure sale on November 23, 1981 null and void.1âwphi1
We reiterated the Wong ruling in Global Holiday Ownership Corporation v. Metropolitan Bank and Trust
Company23and recently, in Carlos Lim, et al. v. Development Bank of the Philippines.24 Notably, all these
cases involved provisions similar to paragraph N of the real estate mortgage in this case.
On another matter, we note that the trial court awarded moral and exemplary damages, attorney’s fees and
costs of suit to Ramirez. In granting said monetary awards, the trial court noted that if the bank followed
strictly the procedure in the extrajudicial foreclosure of the real estate mortgage and had not filed
prematurely an unlawful detainer case against Ramirez, he would not have been forced to litigate and incur
expenses.25
We delete aforesaid monetary awards, except the award of costs of suit. Nothing supports the trial court’s
award of moral damages. There was no testimony of any physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury26 suffered by Ramirez. The award of moral damages must be anchored on a clear showing that
Ramirez actually experienced mental anguish, besmirched reputation, sleepless nights, wounded feelings or
similar injury.27 Ramirez’s testimony28 is also wanting as to the moral damages he suffered.
Similarly, no exemplary damages can be awarded since there is no basis for the award of moral damages and
there is no award of temperate, liquidated or compensatory damages.29 Exemplary damages are imposed by
way of example for the public good, in addition to moral, temperate, liquidated or compensatory damages.30
We likewise delete the trial court’s award of attorney’s fees since the trial court failed to state in the body of
its decision the factual or legal reasons for said award.31
Indeed, even the instant petition32 does not offer any supporting fact or argument for us to affirm the award
of moral and exemplary damages and attorney’s fees.
However, we agree, with the trial court’s award of costs of suit to Ramirez. Costs shall be allowed to the
prevailing party as a matter of course unless otherwise provided in the Rules of Court. 33 These costs
Ramirez may recover are those stated in Section 10, Rule 142 of the Rules of Court. 34 For instance, Ramirez
may recover the lawful fees he paid in docketing his action for annulment of sale before the trial court. We
add thereto the amount of ₱3,530 or the amount of docket and lawful fees paid by Ramirez for filing this
petition before this Court.35 We deleted the award of moral and exemplary damages; hence, the restriction
under Section 7, Rule 142 of the Rules of Court36 would have prevented Ramirez to recover any cost of suit.
But we certify, in accordance with said Section 7, that Ramirez’s action for annulment of sale involved a
substantial and important right such that he is entitled to an award of costs of suit. Needless to stress, the
purpose of paragraph N of the real estate mortgage is to apprise the mortgagor, Ramirez, of any action that
the mortgagee-bank might take on the subject properties, thus according him the opportunity to safeguard
his rights. 37
WHEREFORE, we GRANT the petition, REVERSE and SET ASIDE the Decision dated November 26,
2010 and Resolution dated September 28, 2011 of the Court of Appeals in CA-G.R. CV No. 80616. The
extrajudicial foreclosure proceedings and auction sale conducted by Atty. Hipolito Safiez on September 8,
1994 and the Certificate of Sale over the mortgaged properties covered by TCT Nos. N-10722 and N-23033,
issued in favor of respondent The Manila Banking Corporation, are hereby DECLARED NULL and VOID.
Costs against respondent The Manila Banking Corporation.
SO ORDERED.

420
 SECOND DIVISION
G.R. No. 184045 January 22, 2014
SPOUSES NICASIO C. MARQUEZ AND ANITA J. MARQUEZ, Petitioners,
vs.
SPOUSES CARLITO ALINDOG AND CARMEN ALINDOG, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated February 29, 2008 and
Resolution3 dated August 6, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 97744 finding no grave
abuse of discretion on the part of the Regional Trial Court of Tagaytay City, Branch 18 (RTC) in issuing the
Orders dated November 14, 20054and January 17, 2007[[5 ]] in SCA No. TG-05-2521. Based on these
orders, a writ of preliminary injunction was issued against petitioners-spouses Nicasio C. Marquez and
Anita J. Marquez (Sps. Marquez), enjoining them from taking possession of the property subject of this case
despite the consolidation of their title over the same.
The Facts
Records show that sometime in June 1998, petitioner Anita J. Marquez (Anita) extended a loan in the
amount of ₱500,000.00 to a certain Benjamin Gutierrez (Gutierrez). As security therefor, Gutierrez executed
a Deed of Real Estate Mortgage6 dated June 16, 1998 over a parcel of land located in Tagaytay City with an
area of 660 square meters, more or less, covered by Transfer Certificate of Title (TCT) No. T-
134437 (subject property), registered under the name of Benjamin A. Gutierrez, married to Liwanag
Camerin (Sps. Gutiererez). The mortgage was duly annotated on the dorsal portion of TCT No. T-13443,
which Sps. Marquez had verified as clean prior to the mortgage. 8
Since Gutierrez defaulted in the payment of his loan obligation, Anita sought the extra-judicial foreclosure
of the subject property. At the public auction sale held on January 19, 2000, Anita emerged as the highest
bidder for the amount of ₱1,171,000.00.9 Upon Gutierrez’s failure to redeem the same property within the
prescribed period therefor, title was consolidated under TCT No. T-4193910 on November 5, 2001 (in the
name of Anita J. Marquez, married to Nicasio C. Marquez) which, however, bore an annotation of adverse
claim11 dated March 2, 2000 in the names of respondents-spouses Carlito and Carmen Alindog (Sps.
Alindog). Said annotation was copied from an earlier annotation on TCT No. T-13443 made only after the
subject property’s mortgage to Sps. Marquez.
Subsequently, or on March 21, 2000, Sps. Alindog filed a civil case for annulment of real estate mortgage
and certificate of sale with prayer for damages against Sps. Marquez and a certain Agripina Gonzales
(Gonzales) before the RTC, docketed as Civil Case No. TG-1966 (annulment case). In their
complaint,12 Sps. Alindog alleged that they purchased13 the subject property from Gutierrez way back in
September 1989, but were unable to secure a certificate of title in their names because Gonzales – to whom
they have entrusted said task – had deceived them in that they were assured that the said certificate was
already being processed when such was not the case.14Eventually, they found out that the property had
already been mortgaged to Sps. Marquez, and that when they tried to contact Gonzales for an explanation,
she could no longer be found. Separately, Sps. Alindog averred that when the mortgage was executed in
favor of Sps. Marquez, Gutierrez was already dead.15
In their defense,16 Sps. Marquez disputed Sps. Alindog’s ownership over the subject property, arguing that
the purported sale in the latter’s favor was never registered and therefore, not binding upon them. Further,
they insisted that their certificate of title, TCT No. T-41939, was already indefeasible, and cannot be
attacked collaterally.
Meanwhile, on March 16, 2005, Anita filed an ex-parte petition for the issuance of a writ of
possession17 (ex-parte petition) before the RTC, docketed as LRC Case No. TG-05-1068, claiming that the
same is ministerial on the court’s part following the consolidation of her and her husband’s title over the
subject property. Impleaded in said petition are Sps. Gutierrez, including all persons claiming rights under
them.
421
The RTC Rulings and Subsequent Proceedings
In an Order18 dated August 1, 2005, the RTC granted Anita’s ex-parte petition and thereby directed the
issuance of a writ of possession in her favor. Consequently, a notice to vacate 19 dated September 23, 2005
was issued by Acting Sheriff Teodorico V. Cosare (Sheriff Cosare) against Sps. Gutierrez and all persons
claiming rights under them. Sps. Alindog were served with a copy of the said notice to vacate on September
27, 2005.20
Claiming that they would suffer irreparable injury if the implementation of the writ of possession in favor of
Sps. Marquez would be left unrestrained, Sps. Alindog sought the issuance of a temporary restraining order
(TRO) and/or writ of preliminary injunction with prayer for damages,21 in a separate case docketed as SCA
No. TG-05-252122(injunction case) which was raffled to the same court.
While it appears that the RTC issued a 72-hour TRO on September 29, 2005 in Sps. Alindog’s favor,
records nonetheless show that said order was not extended to a full 20-day TRO.23 To this end, the Sheriff’s
Return24 dated November 14, 2005 shows that Sheriff Cosare was able to implement the writ of possession
on November 11, 2005, turning over the possession of the subject property to Sps. Marquez.
After further proceedings on the injunction case, the RTC, through an Order 25 dated November 14, 2005,
issued a writ of preliminary injunction enjoining Sps. Marquez from taking possession of the subject
property until after the controversy has been fully resolved on the merits. The said issuance was based on the
RTC’s appreciation of the initial evidence adduced by Sps. Alindog, concluding that they appear to have a
right to be protected. Thus, notwithstanding the consolidation of Sps. Marquez’s title over the subject
property, the RTC granted Sps. Alindog’s prayer for injunctive relief, holding that any further dispossession
on their part would cause them irreparable injury.26
Aggrieved, Sps. Marquez moved for reconsideration,27 essentially pointing out that, as the confirmed and
registered owners of the subject property, they are entitled to its possession as a matter of right. They argued
that pursuant to Sections 728 and 829 of Act No. 3135,30 as amended by Act No. 4118,31 the RTC was legally
bound to place them in possession of the subject property pending resolution of the annulment case. Further,
it is their position that the purpose for the issuance of the injunctive writ – i.e., to restrain the
implementation of the writ of possession – had already been rendered moot and academic by its actual
enforcement in the interim.
For their part, Sps. Alindog filed a Motion for Approval of Cash Bond and to Regain Possession 32 of the
subject property.
In an Order33 dated January 17, 2007, the RTC denied the motion of Sps. Marquez, while granted that of
Sps. Alindog. Unperturbed, Sps. Marquez elevated the case to the CA on certiorari. 34
The CA Ruling
In a Decision35 dated February 29, 2008, the CA denied Sps. Marquez’s petition as it found no grave abuse
of discretion on the RTC’s part when it issued the injunctive writ that enjoined Sps. Marquez from taking
possession of the subject property. It observed that Sps. Alindog had indeed "adduced prima facie proof of
their right to possess the subject property"36 while the annulment case was pending, adding that the latter’s
"right to remain in possession"37 proceeds from the fact of the subject property’s earlier sale to them. Thus,
while Sps. Marquez concededly had a right to possess the subject property on account of the consolidation
of the title in their names, the CA nonetheless found no fault on the part of the RTC for "proceeding with
caution"38 in weighing the conflicting claims of the parties and subsequently issuing the writ of preliminary
injunction in Sps. Alindog’s favor.
Dissatisfied, Sps. Marquez moved for reconsideration 39 which was, however, denied in a Resolution40 dated
August 6, 2008, hence, this petition.
The Issue Before the Court
The essential issue in this case is whether or not the CA erred in finding no grave abuse of discretion on the
part of the RTC when it issued the injunctive writ which enjoined Sps. Marquez from taking possession of
the subject property.
The Court’s Ruling
The petition is meritorious.
It is an established rule that the purchaser in an extra-judicial foreclosure sale is entitled to the possession of
the property and can demand that he be placed in possession of the same either during (with bond) or after
the expiration (without bond) of the redemption period therefor. To this end, the Court, in China Banking
Corp. v. Sps. Lozada41 (China Banking Corp.), citing several cases on the matter, explained that a writ of
possession duly applied for by said purchaser should issue as a matter of course, and thus, merely constitutes
a ministerial duty on the part of the court, viz.:42
The procedure for extrajudicial foreclosure of real estate mortgage is governed by Act No. 3135, as
amended. The purchaser at the public auction sale of an extrajudicially foreclosed real property may seek
possession thereof in accordance with Section 7 of Act No. 3135, as amended, which provides:
SEC. 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First
Instance of the province or place where the property or any part thereof is situated, to give him possession
thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for
a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without
violating the mortgage or without complying with the requirements of this Act. Such petition shall be made
under oath and filed in form or an ex parte motion in the registration or cadastral proceedings if the property
is registered, or in special proceedings in the case of property registered under the Mortgage Law or under
section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered
with a mortgage duly registered in the office of any register of deeds in accordance with any existing law,
and in each case the clerk of court shall, upon the filing of such petition, collect the fees specified in
paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety six as
amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the
bond, order that a writ of possession issue addressed to the sheriff of the province in which the property is
situated, who shall execute said order immediately.
The Court expounded on the application of the foregoing provision in De Gracia v. San Jose, thus:
As may be seen, the law expressly authorizes the purchaser to petition for a writ of possession during the
redemption period by filing an ex parte motion under oath for that purpose in the corresponding registration
or cadastral proceeding in the case of property with Torrens title; and upon the filing of such motion and the
approval of the corresponding bond, the law also in express terms directs the court to issue the order for a
writ of possession. Under the legal provisions above copied, the order for a writ of possession issues as a
matter of course upon the filing of the proper motion and the approval of the corresponding bond. No
discretion is left to the court. And any question regarding the regularity and validity of the sale (and the
consequent cancellation of the writ) is left to be determined in a subsequent proceeding as outlined in
section 8. Such question is not to be raised as a justification for opposing the issuance of the writ of
possession, since, under the Act, the proceeding for this is ex parte.
Strictly, Section 7 of Act No. 3135, as amended, refers to a situation wherein the purchaser seeks possession
of the foreclosed property during the 12-month period for redemption. Upon the purchaser’s filing of the ex
parte petition and posting of the appropriate bond, the RTC shall, as a matter of course, order the issuance of
the writ of possession in the purchaser’s favor.
In IFC Service Leasing and Acceptance Corporation v. Nera, the Court reasoned that if under Section 7 of
Act No. 3135, as amended, the RTC has the power during the period of redemption to issue a writ of
possession on the ex parte application of the purchaser, there is no reason why it should not also have the
same power after the expiration of the redemption period, especially where a new title has already been
issued in the name of the purchaser. Hence, the procedure under Section 7 of Act No. 3135, as amended,
may be availed of by a purchaser seeking possession of the foreclosed property he bought at the public
auction sale after the redemption period has expired without redemption having been made.
xxxx
It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property purchased if
it is not redeemed during the period of one year after the registration of the sale. As such, he is entitled to the
422
possession of the said property and can demand it at any time following the consolidation of ownership in
his name and the issuance to him of a new transfer certificate of title. The buyer can in fact demand
possession of the land even during the redemption period except that he has to post a bond in accordance
with Section 7 of Act No. 3135, as amended. No such bond is required after the redemption period if the
property is not redeemed. Possession of the land then becomes an absolute right of the purchaser as
confirmed owner. Upon proper application and proof of title, the issuance of the writ of possession becomes
a ministerial duty of the court. (Emphases and underscoring supplied; citations and emphases in the original
omitted)
In the case of Spouses Espiridion v. CA,43 the Court expounded on the ministerial nature of the foregoing
issuance as follows:44
The issuance of a writ of possession to a purchaser in a public auction is a ministerial act.1âwphi1 After the
consolidation of title in the buyer’s name for failure of the mortgagor to redeem the property, the writ of
possession becomes a matter of right. Its issuance to a purchaser in an extrajudicial foreclosure sale is
merely a ministerial function. The trial court has no discretion on this matter. Hence, any talk of discretion
in connection with such issuance is misplaced.
A clear line demarcates a discretionary act from a ministerial one. Thus:
The distinction between a ministerial and discretionary act is well delineated. A purely ministerial act or
duty is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon
the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him
the right to decide how or when the duty shall be performed, such duty is discretionary and not ministerial.
The duty is ministerial only when the discharge of the same requires neither the exercise of official
discretion or judgment.
Clearly, the use of discretion and the performance of a ministerial act are mutually exclusive. (Emphases
and underscoring supplied; citations omitted)
The ministerial issuance of a writ of possession in favor of the purchaser in an extra-judicial foreclosure
sale, however, admits of an exception. Section 33, 45 Rule 39 of the Rules of Court (Rules) pertinently
provides that the possession of the mortgaged property may be awarded to a purchaser in an extra-judicial
foreclosure unless a third party is actually holding the property by adverse title or right. In the recent case of
Rural Bank of Sta. Barbara (Iloilo), Inc. v. Centeno, 46 citing the case of China Banking Corp., the Court
illumined that "the phrase ‘a third party who is actually holding the property adversely to the judgment
obligor’ contemplates a situation in which a third party holds the property by adverse title or right, such as
that of a co-owner, tenant or usufructuary. The co-owner, agricultural tenant, and usufructuary possess the
property in their own right, and they are not merely the successor or transferee of the right of possession of
another co-owner or the owner of the property. Notably, the property should not only be possessed by a third
party, but also held by the third party adversely to the judgment obligor." 47 In other words, as mentioned in
Villanueva v. Cherdan Lending Investors Corporation, 48 the third person must therefore claim a right
superior to that of the original mortgagor.
In this case, it is clear that the issuance of a writ of possession in favor of Sps. Marquez, who had already
consolidated their title over the extra-judicially foreclosed property, is merely ministerial in nature. The
general rule as herein stated – and not the exception found under Section 33, Rule 39 of the Rules – should
apply since Sps. Alindog hinged their claim over the subject property on their purported purchase of the
same from its previous owner, i.e., Sps. Gutierrez (with Gutierrez being the original mortgagor).
Accordingly, it cannot be seriously doubted that Sps. Alindog are only the latter’s (Sps. Gutierrez)
successors-in-interest who do not have a right superior to them.
That said, the RTC therefore gravely abused its discretion when it issued the injunctive writ which enjoined
Sps. Marquez from taking possession of the subject property. To be sure, grave abuse of discretion arises
when a lower court or tribunal patently violates the Constitution, the law or existing jurisprudence. 49 Here,
while the RTC had initially issued a writ of possession in favor of Sps. Marquez, it defied existing
jurisprudence when it effectively rescinded the said writ by subsequently granting Sps. Alindog's prayer for
injunctive relief. The RTC's finding anent the initial evidence adduced by Sps. Alindog constitutes improper
basis to justify the issuance of the writ of preliminary injunction in their favor since, in the first place, it had
no authority to exercise any discretion in this respect. Jurisprudence is clear on the matter: without the
exception under Section 33, Rule 39 of the Rules availing, the issuance of a writ of possession in favor of
the purchaser of an extra-judicially foreclosed property - such as Sps.
Marquez in this case - should come as a matter of course, and, in such regard, constitutes only a ministerial
duty on the part of the court. Besides, it was improper for the RTC to have issued a writ of preliminary
injunction since the act sought to be enjoined, i.e., the implementation of the writ of possession, had already
been accomplished in the interim and thus, rendered the matter moot. Case law instructs that injunction
would not lie where the acts sought to be enjoined had already become fait accompli (meaning, an
accomplished or consummated act).50 Hence, since the consummation of the act sought to be restrained had
rendered Sps. Alindog's injunction petition moot, the issuance of the said injunctive writ was altogether
improper.
All told, by acting averse to well-settled jurisprudential rules and resultantly depriving Sps. Marquez of their
right of possession over the subject property, the Court therefore concludes that the RTC gravely abused its
discretion in this case. In effect, the CA's contrary ruling thereto is hereby reversed and set aside, which
consequentially leads to the nullification of the writ of preliminary injunction issued by the RTC in favor of
Sps. Alindog, and the reinstatement of the writ of possession issued by the same court in favor of Sps.
Marquez. It must, however, be noted that these pronouncements are without prejudice to any separate action
which Sps. Alindog may file in order to recover ownership of the subject property.
WHEREFORE, the petition is GRANTED. The Decision dated February 29, 2008 and Resolution dated
August 6, 2008 of the Court of Appeals in CA-G.R. SP No. 97744, as well as the Orders dated November
14, 2005 and January 17, 2007 of the Regional Trial Court of Tagaytay City, Branch 18 in SCA No. TG-05-
2521 are hereby REVERSED and SET ASIDE. Accordingly, the writ of preliminary injunction in SCA No.
TG-05-2521 is NULLIFIED, while the Writ of Possession in LRC Case No. TG-05-1068 is REINSTATED.
SO ORDERED.

423
FIRST DIVISION
G.R. No. 187973 January 20, 2014
LZK HOLDINGS and DEVELOPMENT CORPORATION, Petitioner,
vs.
PLANTERS DEVELOPMENT BANK, Respondent.
RESOLUTION
REYES, J.:
This resolves the appeal filed by petitioner LZK Holdings and Development Corporation (LZK Holdings)
assailing the Decision1 dated January 27, 2009 of the Court of Appeals (CA) in CA-G.R. S.P. No. 103267
affirming the Order2dated April 8, 2008 of the Regional Trial Court (RTC) of San Fernando City (San
Fernando), La Union, Branch 66, which issued a writ of possession in favor of respondent Planters
Development Bank (Planters Bank).
The facts are not disputed.
LZK Holdings obtained a ₱40,000,000.00 loan from Planters Bank on December 16, 1996 and secured the
same with a Real Estate Mortgage over its lot located in La Union. The lot measures 589 square meters and
is covered by Transfer Certificate of Title No. T-45337.
On September 21, 1998, the lot was sold at a public auction after Planters Bank extrajudicially foreclosed
the real estate mortgage thereon due to LZK Holdings' failure to pay its loan. Planters Bank emerged as the
highest bidder during the auction sale and its certificate of sale was registered on March 16, 1999.
On April 5, 1999, LZK Holdings filed before the RTC of Makati City, Branch 150, a complaint for
annulment of extra judicial foreclosure, mortgage contract, promissory note and damages. LZK Holdings
also prayed for the issuance of a temporary restraining order (TRO) or writ of preliminary injunction to
enjoin the consolidation of title over the lot by Planters Bank.
On December 27, 1999, Planters Bank filed an ex-parte motion for the issuance of a writ of possession with
the RTC-San Fernando.
On March 13, 2000 or three (3) days before the expiration of LZK Holdings' redemption period, the RTC-
Makati issued a TRO effective for 20 days enjoining Planters Bank from consolidating its title over the
property. On April 3, 2000, the RTC-Makati ordered the issuance of a writ of preliminary injunction for the
same purpose3 but the writ was issued only on June 20, 2000 upon LZK Holdings' posting of a ₱40,000.00
bond.
In the meantime, Planters Bank succeeded in consolidating its ownership over the property on April 24,
2000. However, the proceedings for its ex-parte motion for the issuance of a writ of possession was
suspended by the RTC-San Fernando in an Order dated May 11, 2000 in view of the TRO and writ of
preliminary injunction issued by the RTC-Makati. Planters Bank moved for reconsideration but its motion
was denied by the RTC-San Fernando in an Order dated September 1, 2000. 4
Meanwhile, upon motion of LZK Holdings, the RTC-Makati declared as null and void the consolidated title
of Planters Bank in an Order5 dated June 2, 2000. Such ruling was affirmed by the CA in a Decision6 dated
February 26, 2004 in CA-G.R. SP No. 59327. When the matter reached the Court via G.R. No. 164563, we
sustained the CA's judgment in our Resolution7 dated September 13, 2004.
Planters Bank also appealed the May 11, 2000 Order of the RTC-San Fernando which held in abeyance the
resolution of its ex parte motion for the issuance of a writ of possession. This time, Planters Bank was
victorious. The CA granted the appeal and annulled the assailed order of the RTC-San Fernando. Aggrieved,
LZK Holdings sought recourse with the Court in a petition for review docketed as G.R. No. 167998.8 In Our
Decision dated April 27, 2007, we affirmed the CA's ruling and decreed that Planters Bank may apply for
and is entitled to a writ of possession as the purchaser of the property in the foreclosure sale, viz:
"A writ of possession is a writ of execution employed to enforce a judgment to recover the possession of
land. It commands the sheriff to enter the land and give possession of it to the person entitled under the
judgment. It may be issued in case of an extrajudicial foreclosure of a real estate mortgage under Section 7
of Act No. 3135, as amended by Act No. 4118.
424
Under said provision, the writ of possession may be issued to the purchaser in a foreclosure sale either
within the one-year redemption period upon the filing of a bond, or after the lapse of the redemption period,
without need of a bond.
We have consistently held that the duty of the trial court to grant a writ of possession is ministerial. Such
writ issues as a matter of course upon the filing of the proper motion and the approval of the corresponding
bond. No discretion is left to the trial court. Any question regarding the regularity and validity of the sale, as
well as the consequent cancellation of the writ, is to be determined in a subsequent proceeding as outlined in
Section 8 of Act No. 3135. Such question cannot be raised to oppose the issuance of the writ, since the
proceeding is ex parte. The recourse is available even before the expiration of the redemption period
provided by law and the Rules of Court.
To emphasize the writ's ministerial character, we have in previous cases disallowed injunction to prohibit its
issuance, just as we have held that issuance of the same may not be stayed by a pending action for
annulment of mortgage or the foreclosure itself.
xxxx
x x x [Planters Bank], as the purchaser in the foreclosure sale, may apply for a writ of possession during the
redemption period. In fact, it did apply for a writ on December 27, 1999, well within the redemption period.
The San Fernando RTC, given its ministerial duty to issue the writ, therefore, should have acted on the ex
parte petition. The injunction order is of no moment because it should be understood to have merely stayed
the consolidation of title. As previously stated, an injunction is not allowed to prohibit the issuance of a writ
of possession. Neither does the pending case for annulment of foreclosure sale, mortgage contract,
promissory notes and damages stay the issuance of said writ.
Lastly, the trial on the merits has not even started. Until the foreclosure sale of the property in question is
annulled by a court of competent jurisdiction, petitioner is bereft of valid title and of the right to prevent the
issuance of a writ of possession to [Planters Bank]. Until then, it is the trial court's ministerial function to
grant the possessory writ to [Planters Bank]. "9 (Citations omitted)
Armed with the above ruling, Planters Bank filed before the RTC-San Fernando a motion to set ex-parte
hearing for the issuance of a writ of possession. LZK Holdings opposed the motion. In an Order dated April
2, 2008, the RTC-San Fernando denied the opposition and set the hearing on April 14, 2008. On April 8,
2008, the RTC-San Fernando issued another Order10 declaring the scheduled hearing moot and academic
and granting Planter Bank's ex-parte motion for the issuance of a writ of possession which was filed as early
as December 27, 1999. The decretal portion of the order reads:
WHEREFORE, premises considered, the pet1t10n is hereby granted, hence the order setting the case for ex-
parte hearing on April 14, 2008 is rendered moot and academic by this order. Let [a] Writ of Possession
issue in favor of Planters Development Bank and the Deputy Sheriff of this Court is hereby directed to place
Planters Development Bank or any of its authorized representatives in possession of the subject parcel of
land, together with all the improvements existing thereon, covered by TCT- 45337 of the Register of Deeds
for the province of La Union against LZK HOLDINGS AND DEVELOPMENT CORPORATION (referred
to as LZK) including all other persons/occupants who are claiming rights under them and who are depriving
[Planters Bank] of its right to possess the above-described property upon the filing of bond by (Planters
Bank] in the amount of two million pesos (Php2,000,000.00).
SO ORDERED.11
In its herein assailed Decision12 dated January 27, 2009, the CA affirmed the foregoing ruling and dismissed
LZK Holdings' petition for certiorari docketed as CA-G.R. SP No. 103267. The CA likewise denied LZK
Holdings' motion for reconsideration in its Resolution13 dated May 12, 2009.
LZK Holdings then filed a motion before the Court for a 30-day extension within which to file a petition for
review reckoned from the date of its receipt of the resolution granting such extension. In our Resolution
dated July 15, 2009 we granted the motion but we ordered that the 30-day extended period shall be counted
from the expiration of the original reglementary period.14 As such, LZK Holdings had until July 23, 2009 to
file its petition and not August 24, 2009 or the date when the petition was actually filed.
In our Resolution dated August 26, 2009, we denied the petition for being filed beyond the extended period adverse of interest. It is a proceeding wherein relief is granted without giving the person against whom the
pursuant to Section 5(a), Rule 56 of the Rules of Court and for lack of reversible error in the assailed relief is sought an opportunity to be heard.
judgment of the CA.15LZK Holdings moved for reconsideration16 explaining that it was able to obtain a copy By its very nature, an ex parte petition for issuance of a writ of possession is a non-litigious proceeding. It is
of the Court's July 15, 2009 Resolution on July 29, 2009 when Lourdes Z. Korshak, LZK Holdings' Chief a judicial proceeding for the enforcement of one's right of possession as purchaser in a foreclosure sale. It is
Executive Officer, went to the Office of the Clerk of Court of the Third Division and that she still had to not an ordinary suit filed in court, by which one party sues another for the enforcement of a wrong or
confront and get the case records from the company's previous counsel and then look for a substitute lawyer. protection of a right, or the prevention or redress of a wrong.25 (Citations omitted)
LZK Holdings also claimed that the writ of possession issued to Planters Bank should be annulled for the Given the ex-parte nature of the proceedings for a writ of possession, the R TC did not err in cancelling the
following reasons, to wit: previously scheduled hearing and in granting Planters Bank's motion without affording notice to LZK
(a) with the cancellation of Planters Bank's consolidated title, LZK Holdings remain to be the Holdings or allowing it to participate.
registered owner of the property and as such, the former had no right to apply for a writ of Anent the correct amount of surety bond, it is well to emphasize that our task in an appeal by petition for
possession pursuant to PNB v. Sanao Marketing Corporation, 17 which held that right of possession review on certiorari is limited, as a jurisdictional matter, to reviewing errors of law that might have been
is based on the ownership of the subject property by the applicant; committed by the CA.26The allegations of incorrect computation of the surety bond involve factual matters
(b) LZK Holdings was deprived of due process because the RTC did not conduct a hearing on within the competence of the trial court to address as this Court is not a trier of facts. The RTC found the
Planter Bank's motion for the issuance of a writ of possession; amount of ₱2,000,000.00 to be sufficiently equivalent to the use of the property for a period of twelve (12)
(c) the P.2,000,000.00 bond posted by LZK Holdings does not conform with Section 7 of Act No. months. We are bound by such factual finding especially considering the affirmation accorded it by the CA.
3135 which mandates that the bond amount shall be equivalent to "twelve (12) months use of the In fine, the decision of the CA is in accordance with the law and jurisprudence on the matter. It correctly
subject property" which in this case amounted to P.7,801,4 72.28 at the time the writ was issued. sustained the Order of the RTC in issuing a writ of possession in favor of Planters Bank.
In a Resolution18 dated October 13, 2010 the Court took a liberal stance on the late filing of LZK Holdings' WHEREFORE, premises considered, the petition is hereby DENIED. The Decision dated January 27, 2009
petition for review. Accordingly, its motion for reconsideration was granted and the petition for review of the Court of Appeals in CA-G.R. S.P. No. 103267 is AFFIRMED.
reinstated. SO ORDERED.
However, after a re-examination of the substantive merits of the petition, the Court finds and stands by its
initial determination that the CA committed no reversible error in affirming the issuance of a writ of
possession by the R TC in favor of Planters Bank.
Under the principle of conclusiveness of judgment, the right of Planter's Bank to a writ of possession as
adjudged in G.R. No. 167998 is binding and conclusive on the parties.
The doctrine of res judicata by conclusiveness of judgment postulates that "when a right or fact has been
judicially tried and determined by a court of competent jurisdiction, or when an opportunity for such trial
has been given, the judgment of the court, as long as it remains unreversed, should be conclusive upon the
parties and those in privity with them."19
All the elements of the doctrine are present in this case. The final judgment in G.R. No. 167998 was
rendered by the Court pursuant to its jurisdiction over the review of decisions and rulings of the CA. It was a
judgment on the merits of Planters Banks's right to apply for and be issued a writ of possession. Lastly, the
parties in G.R. No. 167998 are the same parties involved in the present case. 20
Hence, LZK Holdings can no longer question Planter Bank's right to a writ of possession over the subject
property because the doctrine of conclusiveness of judgment bars the relitigation of such particular issue.
Moreover, the authority relied upon by LZK Holdings defeats rather than support its position. The ruling in
PNB21echoes the very same rationale of the judgment in G.R. No. 167998 that is - the purchaser in
foreclosure sale may take possession of the property even before the expiration of the redemption period by
filing an ex parte motion for such purpose and upon posting of the necessary bond. 22
The pronouncement in PNB that right of possession is based on the ownership of the subject property by the
applicant pertains to applications for writ of possession after the expiration of the redemption period, a
situation not contemplated within the facts of the present case.
We cannot also uphold the contentions of LZK Holdings that the RTC, in issuing the writ of possession,
transgressed Act No. 3135.23
No hearing is required prior to the issuance of a writ of possession. This is clear from the following
disquisitions in Espinoza v. United Overseas Bank Phils. 24 which reiterates the settled rules on writs of
possession, to wit:
The proceeding in a petition for a writ of possession is ex parte and summary in nature.1âwphi1 It is a
judicial proceeding brought for the benefit of one party only and without notice by the court to any person

425
 FIRST DIVISION
G.R. No. 195540 March 13, 2013
GOLDENWAY MERCHANDISING CORPORATION, Petitioner,
vs.
EQUITABLE PCI BANK, Respondent.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review on certiorari which seeks to reverse and set aside the
Decision1 dated November 19, 2010 and Resolution2 dated January 31, 2011 of the Court of Appeals (CA)
in CA-G.R. CV No. 91120. The CA affirmed the Decision3 dated January 8, 2007 of the Regional Trial
Court (RTC) of- Valenzuela City, Branch 171 dismissing the complaint in Civil Case No. 295-V -01.
The facts are undisputed.
On November 29, 1985, Goldenway Merchandising Corporation (petitioner) executed a Real Estate
Mortgage in favor of Equitable PCI Bank (respondent) over its real properties situated in Valenzuela,
Bulacan (now Valenzuela City) and covered by Transfer Certificate of Title (TCT) Nos. T-152630, T-
151655 and T-214528 of the Registry of Deeds for the Province of Bulacan. The mortgage secured the Two
Million Pesos (₱2,000,000.00) loan granted by respondent to petitioner and was duly registered. 4
As petitioner failed to settle its loan obligation, respondent extrajudicially foreclosed the mortgage on
December 13, 2000. During the public auction, the mortgaged properties were sold for ₱3,500,000.00 to
respondent. Accordingly, a Certificate of Sale was issued to respondent on January 26, 2001. On February
16, 2001, the Certificate of Sale was registered and inscribed on TCT Nos. T-152630, T-151655 and T-
214528.5
In a letter dated March 8, 2001, petitioner’s counsel offered to redeem the foreclosed properties by tendering
a check in the amount of ₱3,500,000.00. On March 12, 2001, petitioner’s counsel met with respondent’s
counsel reiterating petitioner’s intention to exercise the right of redemption. 6 However, petitioner was told
that such redemption is no longer possible because the certificate of sale had already been registered.
Petitioner also verified with the Registry of Deeds that title to the foreclosed properties had already been
consolidated in favor of respondent and that new certificates of title were issued in the name of respondent
on March 9, 2001.
On December 7, 2001, petitioner filed a complaint7 for specific performance and damages against the
respondent, asserting that it is the one-year period of redemption under Act No. 3135 which should apply
and not the shorter redemption period provided in Republic Act (R.A.) No. 8791. Petitioner argued that
applying Section 47 of R.A. 8791 to the real estate mortgage executed in 1985 would result in the
impairment of obligation of contracts and violation of the equal protection clause under the Constitution.
Additionally, petitioner faulted the respondent for allegedly failing to furnish it and the Office of the Clerk
of Court, RTC of Valenzuela City with a Statement of Account as directed in the Certificate of Sale, due to
which petitioner was not apprised of the assessment and fees incurred by respondent, thus depriving
petitioner of the opportunity to exercise its right of redemption prior to the registration of the certificate of
sale.
In its Answer with Counterclaim,8 respondent pointed out that petitioner cannot claim that it was unaware of
the redemption price which is clearly provided in Section 47 of R.A. No. 8791, and that petitioner had all the
opportune time to redeem the foreclosed properties from the time it received the letter of demand and the
notice of sale before the registration of the certificate of sale. As to the check payment tendered by
petitioner, respondent said that even assuming arguendo such redemption was timely made, it was not for
the amount as required by law.
On January 8, 2007, the trial court rendered its decision dismissing the complaint as well as the
counterclaim. It noted that the issue of constitutionality of Sec. 47 of R.A. No. 8791 was never raised by the
petitioner during the pre-trial and the trial. Aside from the fact that petitioner’s attempt to redeem was
already late, there was no valid redemption made because Atty. Judy Ann Abat-Vera who talked to Atty.
426
Joseph E. Mabilog of the Legal Division of respondent bank, was not properly authorized by petitioner’s
Board of Directors to transact for and in its behalf; it was only a certain Chan Guan Pue, the alleged
President of petitioner corporation, who gave instruction to Atty. Abat-Vera to redeem the foreclosed
properties.9
Aggrieved, petitioner appealed to the CA which affirmed the trial court’s decision. According to the CA,
petitioner failed to justify why Section 47 of R.A. No. 8791 should be declared unconstitutional.
Furthermore, the appellate court concluded that a reading of Section 47 plainly reveals the intention to
shorten the period of redemption for juridical persons and that the foreclosure of the mortgaged properties in
this case when R.A. No. 8791 was already in effect clearly falls within the purview of the said provision. 10
Petitioner’s motion for reconsideration was likewise denied by the CA.
In the present petition, it is contended that Section 47 of R.A. No. 8791 is inapplicable considering that the
contracting parties expressly and categorically agreed that the foreclosure of the real estate mortgage shall
be in accordance with Act No. 3135. Citing Co v. Philippine National Bank11 petitioner contended that the
right of redemption is part and parcel of the Deed of Real Estate Mortgage itself and attaches thereto upon
its execution, a vested right flowing out of and made dependent upon the law governing the contract of
mortgage and not on the mortgagee’s act of extrajudicially foreclosing the mortgaged properties. This Court
thus held in said case that "Under the terms of the mortgage contract, the terms and conditions under which
redemption may be exercised are deemed part and parcel thereof whether the same be merely conventional
or imposed by law."
Petitioner then argues that applying Section 47 of R.A. No. 8791 to the present case would be a substantial
impairment of its vested right of redemption under the real estate mortgage contract. Such impairment
would be violative of the constitutional proscription against impairment of obligations of contract, a patent
derogation of petitioner’s vested right and clearly changes the intention of the contracting parties. Moreover,
citing this Court’s ruling in Rural Bank of Davao City, Inc. v. Court of Appeals12 where it was held that
"Section 119 prevails over statutes which provide for a shorter period of redemption in extrajudicial
foreclosure sales", and in Sulit
v. Court of Appeals,13 petitioner stresses that it has always been the policy of this Court to aid rather than
defeat the mortgagor’s right to redeem his property.
Petitioner further argues that since R.A. No. 8791 does not provide for its retroactive application, courts
therefore cannot retroactively apply its provisions to contracts executed and consummated before its
effectivity. Also, since R.A. 8791 is a general law pertaining to the banking industry while Act No. 3135 is a
special law specifically governing real estate mortgage and foreclosure, under the rules of statutory
construction that in case of conflict a special law prevails over a general law regardless of the dates of
enactment of both laws, Act No. 3135 clearly should prevail on the redemption period to be applied in this
case.
The constitutional issue having been squarely raised in the pleadings filed in the trial and appellate courts,
we shall proceed to resolve the same.
The law governing cases of extrajudicial foreclosure of mortgage is Act No. 3135, 14 as amended by Act No.
4118. Section 6 thereof provides:
SEC. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to,
the debtor, his successors-in-interest or any judicial creditor or judgment creditor of said debtor, or any
person having a lien on the property subsequent to the mortgage or deed of
trust under which the property is sold, may redeem the same at any time within the term of one year from
and after the date of the sale; and such redemption shall be governed by the provisions of sections four
hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of
Civil Procedure,15 in so far as these are not inconsistent with the provisions of this Act.
The one-year period of redemption is counted from the date of the registration of the certificate of sale. In
this case, the parties provided in their real estate mortgage contract that upon petitioner’s default and the
latter’s entire loan obligation becoming due, respondent may immediately foreclose the mortgage judicially
in accordance with the Rules of Court, or extrajudicially in accordance with Act No. 3135, as amended.
However, Section 47 of R.A. No. 8791 otherwise known as "The General Banking Law of 2000" which took
effect on June 13, 2000, amended Act No. 3135. Said provision reads:
SECTION 47. Foreclosure of Real Estate Mortgage. — In the event of foreclosure, whether judicially or
extrajudicially, of any mortgage on real estate which is security for any loan or other credit accommodation
granted, the mortgagor or debtor whose real property has been sold for the full or partial payment of his
obligation shall have the right within one year after the sale of the real estate, to redeem the property by
paying the amount due under the mortgage deed, with interest thereon at the rate specified in the mortgage,
and all the costs and expenses incurred by the bank or institution from the sale and custody of said property
less the income derived therefrom. However, the purchaser at the auction sale concerned whether in a
judicial or extrajudicial foreclosure shall have the right to enter upon and take possession of such property
immediately after the date of the confirmation of the auction sale and administer the same in accordance
with law. Any petition in court to enjoin or restrain the conduct of foreclosure proceedings instituted
pursuant to this provision shall be given due course only upon the filing by the petitioner of a bond in an
amount fixed by the court conditioned that he will pay all the damages which the bank may suffer by the
enjoining or the restraint of the foreclosure proceeding.
Notwithstanding Act 3135, juridical persons whose property is being sold pursuant to an extrajudicial
foreclosure, shall have the right to redeem the property in accordance with this provision until, but not after,
the registration of the certificate of foreclosure sale with the applicable Register of Deeds which in no case
shall be more than three (3) months after foreclosure, whichever is earlier. Owners of property that has been
sold in a foreclosure sale prior to the effectivity of this Act shall retain their redemption rights until their
expiration. (Emphasis supplied.)
Under the new law, an exception is thus made in the case of juridical persons which are allowed to exercise
the right of redemption only "until, but not after, the registration of the certificate of foreclosure sale" and in
no case more than three (3) months after foreclosure, whichever comes first.16
May the foregoing amendment be validly applied in this case when the real estate mortgage contract was
executed in 1985 and the mortgage foreclosed when R.A. No. 8791 was already in effect?
We answer in the affirmative.
When confronted with a constitutional question, it is elementary that every court must approach it with
grave care and considerable caution bearing in mind that every statute is presumed valid and every
reasonable doubt should be resolved in favor of its constitutionality. 17 For a law to be nullified, it must be
shown that there is a clear and unequivocal breach of the Constitution. The ground for nullity must be clear
and beyond reasonable doubt.18Indeed, those who petition this Court to declare a law, or parts thereof,
unconstitutional must clearly establish the basis therefor. Otherwise, the petition must fail. 19
Petitioner’s contention that Section 47 of R.A. 8791 violates the constitutional proscription against
impairment of the obligation of contract has no basis.
The purpose of the non-impairment clause of the Constitution20 is to safeguard the integrity of contracts
against unwarranted interference by the State. As a rule, contracts should not be tampered with by
subsequent laws that would change or modify the rights and obligations of the parties. 21 Impairment is
anything that diminishes the efficacy of the contract. There is an impairment if a subsequent law changes the
terms of a contract between the parties, imposes new conditions, dispenses with those agreed upon or
withdraws remedies for the enforcement of the rights of the parties. 22
Section 47 did not divest juridical persons of the right to redeem their foreclosed properties but only
modified the time for the exercise of such right by reducing the one-year period originally provided in Act
No. 3135. The new redemption period commences from the date of foreclosure sale, and expires upon
registration of the certificate of sale or three months after foreclosure, whichever is earlier. There is likewise
no retroactive application of the new redemption period because Section 47 exempts from its operation those
427
properties foreclosed prior to its effectivity and whose owners shall retain their redemption rights under Act
No. 3135.
Petitioner’s claim that Section 47 infringes the equal protection clause as it discriminates
mortgagors/property owners who are juridical persons is equally bereft of merit.
The equal protection clause is directed principally against undue favor and individual or class
privilege.1âwphi1 It is not intended to prohibit legislation which is limited to the object to which it is
directed or by the territory in which it is to operate. It does not require absolute equality, but merely that all
persons be treated alike under like conditions both as to privileges conferred and liabilities imposed. 23 Equal
protection permits of reasonable classification.24 We have ruled that one class may be treated differently
from another where the groupings are based on reasonable and real distinctions.25 If classification is
germane to the purpose of the law, concerns all members of the class, and applies equally to present and
future conditions, the classification does not violate the equal protection guarantee. 26
We agree with the CA that the legislature clearly intended to shorten the period of redemption for juridical
persons whose properties were foreclosed and sold in accordance with the provisions of Act No. 3135. 27
The difference in the treatment of juridical persons and natural persons was based on the nature of the
properties foreclosed – whether these are used as residence, for which the more liberal one-year redemption
period is retained, or used for industrial or commercial purposes, in which case a shorter term is deemed
necessary to reduce the period of uncertainty in the ownership of property and enable mortgagee-banks to
dispose sooner of these acquired assets. It must be underscored that the General Banking Law of 2000,
crafted in the aftermath of the 1997 Southeast Asian financial crisis, sought to reform the General Banking
Act of 1949 by fashioning a legal framework for maintaining a safe and sound banking system. 28 In this
context, the amendment introduced by Section 47 embodied one of such safe and sound practices aimed at
ensuring the solvency and liquidity of our banks.1âwphi1 It cannot therefore be disputed that the said
provision amending the redemption period in Act 3135 was based on a reasonable classification and
germane to the purpose of the law.
This legitimate public interest pursued by the legislature further enfeebles petitioner’s impairment of
contract theory.
The right of redemption being statutory, it must be exercised in the manner prescribed by the statute, 29 and
within the prescribed time limit, to make it effective. Furthermore, as with other individual rights to contract
and to property, it has to give way to police power exercised for public welfare. 30 The concept of police
power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation
that may interfere with personal liberty or property in order to promote the general welfare." Its scope, ever-
expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides
enough room for an efficient and flexible response to conditions and circumstances thus assuming the
greatest benefits.31
The freedom to contract is not absolute; all contracts and all rights are subject to the police power of the
State and not only may regulations which affect them be established by the State, but all such regulations
must be subject to change from time to time, as the general well-being of the community may require, or as
the circumstances may change, or as experience may demonstrate the necessity. 32 Settled is the rule that the
non-impairment clause of the Constitution must yield to the loftier purposes targeted by the Government.
The right granted by this provision must submit to the demands and necessities of the State’s power of
regulation.33 Such authority to regulate businesses extends to the banking industry which, as this Court has
time and again emphasized, is undeniably imbued with public interest.34
Having ruled that the assailed Section 47 of R.A. No. 8791 is constitutional, we find no reversible error
committed by the CA in holding that petitioner can no longer exercise the right of redemption over its
foreclosed properties after the certificate of sale in favor of respondent had been registered.
WHEREFORE, the petition for review on certiorari is DENIED for lack of merit. The Decision dated
November 19, 2010 and Resolution dated January 31, 2011 of the Court of Appeals in CA-G.R. CV No.
91120 are hereby AFFIRMED.
With costs against the petitioner.
SO ORDERED.

428
 THIRD DIVISION
G.R. No. 167420 June 5, 2009
ALLIED BANKING CORPORATION, Petitioner,
vs.
RUPERTO JOSE H. MATEO, represented by WARLITA MATEO, as Attorney-in-Fact, Respondent.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari filed by Allied Banking Corporation (petitioner)
seeking to reverse the Decision1 dated October 21, 2004, as well as the Order2 dated February 10, 2005 of
the Regional Trial Court (RTC), Branch 35, Santiago City, docketed as SCA No. 35-0145 for legal
redemption with prayer for a temporary restraining order and preliminary injunction.
On February 19, 1996, Ruperto Jose Mateo (respondent) obtained a loan from petitioner in the amount of
₱950,000.00. To secure the payment of the loan, respondent executed in favor of petitioner a deed of real
estate mortgage over a parcel of land registered in respondent’s name under Transfer Certificate of Title
(TCT) No. 236351 of the Register of Deeds of Isabela. He likewise executed a promissory note in the
amount of ₱950,000.00. Subsequently, respondent incurred default in the payment of his loan prompting
petitioner to cause the extrajudicial foreclosure of the mortgage constituted on the subject property. The
property was sold at public auction for ₱1,531,474.53 with petitioner as the sole and highest bidder. The
Certificate of Sale was issued to petitioner, and was registered with the Register of Deeds on July 21, 1999.
Respondent, through her attorney-in-fact, Warlita N. Mateo (Warlita), sent, on several dates, faxed letters to
petitioner signifying his desire to redeem the foreclosed property for ₱1.1 million pesos.
On July 21, 2000, or on the last day of the period for redemption, respondent, represented by Warlita, filed a
case for legal redemption with prayer for temporary restraining order and preliminary injunction with the
RTC of Isabela.
On January 19, 2001, petitioner effected the consolidation of its ownership over the subject property and
TCT No. 311043 was issued in its name on March 2, 2001.
During the pre-trial conference on September 18, 2002, respondent offered to redeem the property for the
foreclosed amount of ₱1,531,474.53, but petitioner refused. Instead of continuing with the trial, the parties
agreed to submit the case for summary judgment.
On October 21, 2004, the RTC rendered its Decision, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered in favor of the plaintiff and
against the defendant, ALLOWING the plaintiff to redeem from the defendant the property now covered by
TCT No. T-311043 in the name of the defendant, upon payment of the amount of ₱1,531,474.53, plus one
(1) percent as interest for one (1) month only, and ORDERING the defendant to accept the tender of
429
redemption of the plaintiff and to deliver the proper certificate of redemption to the latter and finally,
ordering the defendant to indemnify the plaintiff ₱30,000.00 as attorney’s fees and cost of the suit. 3
In so ruling, the RTC found that: (1) respondent had the right to redeem the foreclosed property from
petitioner, as the one year period to redeem had not yet expired when respondent filed the instant case; (2)
even prior to the filing of the case, respondent had sent petitioner several faxed letters to show his sincere
desire to avail himself of the right to redeem the property from petitioner; (3) respondent already offered to
pay the foreclosed price of ₱1,531,474.53 as in fact he had consigned ₱1.1 million in the Land Bank. The
trial court also found that respondent began to exercise the right to redeem on August 10, 1999 when he,
through Warlita, sent a letter to petitioner on his intention to redeem; thus, applying Section 28, Rule 39 of
the Rules of Court, respondent should pay as redemption price the foreclosed amount of ₱1,531,474.53, plus
one percent interest for the month that lapsed until August 10, 1999.
Petitioner filed a Motion for Reconsideration, which was denied in an Order 4 dated February 10,
2005.lavvphi1
In denying the Motion for Reconsideration, the RTC ruled that respondent’s offer of ₱1,531,474.53 made
during the pre-trial conference already covered petitioner’s bid price at the foreclosure auction sale, which
already incorporated the interest, penalties, attorney’s fees and other expenses of sale; that such purchase
price should be the basis of the redemption price, plus interest at one percent, in order to afford respondent a
greater chance to redeem the foreclosed property.
Dissatisfied, petitioner filed a petition for review on certiorari with the Court, alleging that:
THE LOWER COURT DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD
WITH LAW AND WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT IN THAT:
I. It is considered sufficient tender and consignation the amount which was less than the price for
which the property was bought and in the manner not in conformity with the law and settled
jurisprudence.
II. It applied the provisions of Sec. 28, Rule 39 of the Rules of Court and Act No. 3135 in the
computation of the redemption price even when the said basis has been superseded by Sec. 78 of
the General Banking Act (now Section 47 of RA 8791).5
Petitioner contends that: (1) the RTC erred in considering the various offers made by respondent to redeem
the subject property for the amount of ₱1.1 million as sufficient tender of payment for purposes of
redemption; (2) the tender to be legally sufficient must be for the amount of the purchase price, plus the
agreed interest rate on the principal obligation; (3) the RTC erred in considering the deposit of ₱1.1 million
with Land Bank as sufficient consignation, since the amount should have been deposited in court and not
anywhere else; (4) the offer to redeem in the amount of ₱1,531,474.53 was made only during the pre-trial
conference, which was already way past the redemption period; and (5) the redemption price should be
based on Section 47 of the General Banking Act.
In his Comment, respondent claims that the petition should be denied outright, because it raises questions of
fact and not purely of law; that the issue as to the sufficiency or insufficiency of the amount tendered by
respondent is a question of fact, as the Court should consider the factual evidence in relation to the
computation of the purchase price paid by petitioner during the foreclosure sale and the price offered by
respondent; that he offered to pay petitioner’s purchase amount of ₱1,531,474.53 during the pre-trial
conference; that he can still exercise the right of redemption over the subject property; and that a previous
tender of payment and consignation is only proper but is not essential when the redemptioner exercises his
right to redeem the foreclosed property through the filing of a judicial action within the period of
redemption.
In its Reply, petitioner argues that the case was decided on stipulation of facts by the parties; thus, any
appeal from a judgment based on stipulation of facts can only be on questions of law; that, whether under
Section 28, Rule 39 of the Rules of Court or Section 47 of the General Banking Act, the minimum
redemption amount is ₱1,531,474.53, which was the amount paid by petitioner during the foreclosure sale.
Preliminarily, the Court would first address the procedural matter raised by respondent: that the petition
should be denied outright because it raises questions of fact and not purely of law. Respondent claims that
the issue as to the sufficiency or insufficiency of the amount tendered by respondent is a question of fact,
which could not be raised in an appeal by certiorari under Rule 45.
We are not persuaded.
Notably, it was already stipulated upon by the parties that respondent offered ₱1.1 million as redemption
price before the filing of this action; thus, the issue is not the amount of redemption price, but the sufficiency
of the amount offered by respondent that would warrant the redemption of the foreclosed property. This is a
question of law as it calls for the correct application of law and jurisprudence on the matter, which is within
the purview of Rule 45 of the Rules of Court.1avvphi1
The Court will now address the main issues presented, to wit:
(1) Whether or not respondent still has the right to redeem the subject property; and
(2) Whether or not Section 78 of the General Banking Act6 should be applied to the computation of
the redemption price.
Section 6 of Act No. 3135,7 as amended by Act No. 4118, provides for a valid redemption, to wit:
SEC. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to,
the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any
person having a lien on the property subsequent to the mortgage or deed of trust under which the property is
sold, may redeem the same at any time within the term of one year from and after the date of sale; and such
redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and
sixty-six, inclusive,8 of the Code of Civil Procedure, insofar as these are not inconsistent with the provisions
of this Act.
Considering that petitioner is a banking institution, the determination of the redemption price for the
foreclosed property should be governed by Section 78 of the General Banking Act. Union Bank of the
Philippines v. Court of Appeals,9 is instructive:
430
x x x Petitioner’s contention that Section 78 of the General Banking Act governs the determination of the
redemption price of the subject property is meritorious. In Ponce de Leon v. Rehabilitation Finance
Corporation, this Court had occasion to rule that Section 78 of the General Banking Act had the effect of
amending Section 6 of Act No. 3135 insofar as the redemption price is concerned when the mortgagee is a
bank, as in this case, or a banking or credit institution. The apparent conflict between the provisions of Act
No. 3135 and the General Banking Act was, therefore, resolved in favor of the latter, being a special and
subsequent legislation. This pronouncement was reiterated in the case of Sy v. Court of Appeals where we
held that the amount at which the foreclosed property is redeemable is the amount due under the mortgage
deed, or the outstanding obligation of the mortgagor plus interest and expenses in accordance with Section
78 of the General Banking Act. It was, therefore, manifest error on the part of the Court of Appeals to apply
in the case at bar the provisions of Section 30, Rule 39 of the Rules of Court in fixing the redemption price
of the subject foreclosed property.
And Section 78 provides:
Sec. 78. In the event of foreclosure, whether judicially or extrajudicially, of any mortgage on real estate
which is security for any loan granted before the passage of this Act or under the provisions of this Act, the
mortgagor or debtor whose real property has been sold at public auction, judicially or extrajudicially, for the
full or partial payment of an obligation to any bank, banking or credit institution, within the purview of this
Act shall have the right, within one year after the sale of the real estate as a result of the foreclosure of the
respective mortgage, to redeem the property by paying the amount fixed by the court in the order of
execution, or the amount due under the mortgage deed, as the case may be, with interest thereon at the rate
specified in the mortgage, and all the costs, and judicial and other expenses incurred by the bank or
institution concerned by reason of the execution and sale and as a result of the custody of said property less
the income received from the property.
In BPI Family Savings Bank, Inc. v. Veloso,10 the Court had occasion to state the requirements for the
redemption of the foreclosed property. The Court held:
The general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire
to do so. The statement of intention must be accompanied by an actual and simultaneous tender of payment.
This constitutes the exercise of the right to repurchase.
In several cases decided by the Court where the right to repurchase was held to have been properly
exercised, there was an unequivocal tender of payment for the full amount of the repurchase price.
Otherwise, the offer to redeem is ineffectual. Bona fide redemption necessarily implies a reasonable
and valid tender of the entire repurchase price, otherwise the rule on the redemption period fixed by
law can easily be circumvented.11
In this case, it was stipulated upon by the parties that the real estate mortgage over respondent’s property
was foreclosed in the amount of ₱1,531,474.53, and that respondent offered the amount of ₱1.1 million as
redemption price before the filing of the complaint. It has been held that the tender of payment must be for
the full amount of the purchase price, i.e., the amount fixed by the court in the order of execution or the
amount due under the mortgage deed, as the case may be, with interest thereon at the rate specified in the
mortgage; and all the costs, and judicial and other expenses incurred by the bank or institution concerned by
reason of the execution and sale and as a result of the custody of said property less the income received from
the property. Thus, the amount of ₱1.1 million offered by respondent was ineffective, since not only did the
amount not include the interest but it was even below the purchase price. Such offer did not effect a valid in good faith. It was not filed for the purpose of determining the correct redemption price, but to stretch the
redemption, and petitioner was justified in refusing to accept such offer. redemption period indefinitely.16

The RTC found that the instant case for legal redemption must prosper, as the one-year period to redeem had
not yet expired when respondents filed the case. Notably, respondents filed the instant case on July 21, 2000
which was within one year from the registration of the Certificate of Sale on July 21, 1999. The question
now is whether such judicial redemption is proper under the circumstances.
In Hi Yield Realty, Inc v. Court of Appeals, 12 the Court held:
WHEREFORE, the petition for review is GRANTED. The Decision dated October 21, 2004, as well as the
Order dated February 10, 2005 of the Regional Trial Court, Branch 35, Santiago City, are hereby
REVERSED and SET ASIDE. The action for legal redemption filed by respondent is hereby DISMISSED.
SO ORDERED.

What is the redemptioner’s option therefore when the redemption period is about to expire and the
redemption cannot take place on account of disagreement over the redemption price?

According to jurisprudence, the redemptioner faced with such a problem may preserve his right of
redemption through judicial action which in every case must be filed within the one-year period of
redemption. The filing of the court action to enforce redemption, being equivalent to a formal offer to
redeem, would have the effect of preserving his redemptive rights and "freezing" the expiration of the one-
year period. This is a fair interpretation provided the action is filed on time and in good faith, the redemption
price is finally determined and paid within a reasonable time, and the rights of the parties are respected.

Stated otherwise, the foregoing interpretation, as applied to the case at bar, has three critical dimensions: (1)
timely redemption or redemption by expiration date (or, as what happened in this case, the redemptioner was
forced to resort to judicial action to "freeze" the expiration of the redemption period); (2) good faith as
always, meaning, the filing of the private respondent’s action on August 13, 1993 must have been for the
sole purpose of determining the redemption price and not to stretch the redemptive period indefinitely; and
(3) once the redemption price is determined within a reasonable time, the redemptioner must make prompt
payment in full.

Conversely, if private respondent had to resort to judicial action to stall the expiration of the redemptive
period on August 13, 1993 because he and the petitioner could not agree on the redemption price which still
had to be determined, private respondent could not thereby be expected to tender payment simultaneously
with the filing of the action on said date.13

As above-stated, for the action to be considered filed in good faith, the filing of the action must have been
for the sole purpose of determining the redemption price and not to stretch the redemptive period
indefinitely. In this case, it was sufficiently shown that respondent’s offer of ₱1.1 million was even below
the amount paid by petitioner in the foreclosure sale. Notably, in petitioner’s Answer to respondent’s
complaint, it had alleged that, as of June 16, 2000, the redemption price of the foreclosed property consisting
of the amount due under the mortgage deed, the interest specified in the mortgage and all the costs and
expenses incurred by petitioner from the sale and custody of the property already amounted to
₱2,058,825.73.14 Yet, during the pre-trial conference, respondent merely offered to pay the amount of the
auction price alone which was ₱1,531,474.53, without any payment of interest. In fact, respondent never
even consigned such amount in court to show good faith.

It is not difficult to understand why the redemption price should either be fully offered in legal tender or else
validly consigned in court. Only by such means can the auction winner be assured that the offer to redeem is
being made in good faith.15 Thus, the Court finds that respondent’s action for legal redemption was not filed

431
 FIRST DIVISION
G.R. No. 169568, October 22, 2014
ROLANDO ROBLES, REPRESENTED BY ATTY. CLARA C.
ESPIRITU, Petitioner, v. FERNANDO FIDEL YAPCINCO, PATROCINIO B. YAPCINCO, MARIA
CORAZON B. YAPCINCO, AND MARIA ASUNCION B. YAPCINCO-FRONDA, Respondents.
DECISION
BERSAMIN, J.:
The dispute involves the ownership of a judicially-foreclosed parcel of land sold at a public auction, but
which sale was not judicially confirmed. On one side is the petitioner, the successor in interest of the
purchaser in the public auction, and, on the other, the heirs of the mortgagor, who never manifested interest
in redeeming the property from the time of the foreclosure.
The Case
Assailed herein are the decision and resolution of the Court of Appeals (CA) respectively promulgated on
February 24, 2005 and September 12, 2005 in CA-G.R. No. 79824 entitled Rolando Robles, represented by
Atty. Clara C. Espiritu v. Fernando Fidel Yapcinco, et al., 1 reversing and setting aside the decision rendered
on July 7, 2003 by the Regional Trial Court, Branch 63, in Tarlac City (RTC). 2
Antecedents
The property in litis was originally registered under Transfer Certificate (TCT) No. 20458 of the Registry of
Deeds of Tarlac in the name of Fernando F. Yapcinco, married to Maxima Alcedo.3 In May 4,1944,
Yapcinco constituted a mortgage on the property in favor of Jose C. Marcelo to secure the performance of
his obligation. In turn, Marcelo transferred his rights as the mortgagee to Apolinario Cruz on October 24,
1944.4 When Yapcinco did not pay the obligation, Apolinario Cruz brought an action for judicial foreclosure
of the mortgage in the Court of First Instance (CFI) of Tarlac, which rendered its decision on July 27, 1956
ordering Patrocinio Y. Kelly, the administratrix of the estate of Yapcinco, who died during the pendency of
the action, to pay Apolinario Cruz the indebtedness secured by the mortgage plus interest; and in case of the
failure to pay after 90 days from the date of the decision, the property would be sold at a public auction,5 to
wit:ChanRoblesVirtualawlibrary
IN VIEW OF THE FOREGOING, the Court renders decision to the following effect:
A. Ordering the defendant Patrocinio Y. Kelly, as judicial administratrix of the intestate estate of Fernando
Yapcinco, to pay to Apolinario Cruz the total amount of P6,000.00, representing the mortgage indebtedness
of the defendant in favor of plaintiff, together with interest thereon at the rate of 8% per annum payable
from May 4, 1944, until all payment thereof; and if after ninety (90) days from the date of this decision shall
have become final and executory the defendant shall not have paid the obligation herein ordered paid, the
properties mortgaged shall be sold by the Provincial Sheriff at Public Auction, and the proceeds thereof to
be applied and disposed of in accordance with law.
B. Dismissing the third-party complaint of defendant Fernando Yapcinco against Jose C. Marcelo; and
C. Ordering the defendant to pay the costs of this suit.
SO ORDERED.
432
Apolinario Cruz was adjudged the highest bidder in the public auction held on March 18, 1959. In his favor
was then issued the certificate of absolute sale,6 and he took possession of the property in due course.
However, he did not register the certificate of sale; nor was a judicial confirmation of sale issued.
On September 5, 1972, Apolinario Cruz donated the property to his grandchildren, namely: Carlos C. de la
Rosa, Apolinario Bernabe, Ferdinand Cruz, and petitioner Rolando Robles. 7 On August 29, 1991, however,
Apolinario Bernabe falsified a deed of absolute sale, whereby he made it appear that Yapcinco had sold the
property to him, Ma. Teresita Escopete, Orlando Santos and Oliver Puzon. 8 As a consequence, the Register
of Deeds cancelled Yapcinco's TCT No. 20458 and issued TCT No. 243719 in their names as co-
vendees.9 The sale was annotated on TCT No. 20458. It appears that another instrument dated August 28,
1991 was annotated on TCT No. 20458 purportedly releasing and cancelling the mortgage. Both instruments
were annotated on February 11, 1992.10
On February 3, 1993, Carlos C. dela Rosa and Ferdinand Cruz, the other donees, filed a complaint for the
nullification of the contract of sale, cancellation of title and reconveyance against Apolinario Bernabe and
his co-vendees, but the case was not aggressively pursued inasmuch as the parties were first degree
cousins.11
On January 2, 2000, the respondents, all heirs of the Spouses Yapcinco, instituted an action against
Apolinario Bernabe and his co-vendees in the Regional Trial Court (RTC) in Tarlae City for the annulment
of TCT No. 243719, document restoration, reconveyance and damages. They claimed that although the
property had been mortgaged, the mortgage had not been foreclosed, judicially or extra-judicially;12 that the
property was released from the mortgage per Entry No. 32-2182 in the Memorandum of Incumbrances; and
that the deed of absolute sale between Fernando Yapcinco and Bemabe, et aL. was void and ineffectual
because the Spouses Yapcinco had already been dead as of the date of the sale.13
Defendants Apolinario Bernabe and his co-vendees were declared in default.
On September 13, 2001, the RTC, Branch 64, in Tarlae City rendered its judgment declaring TCT No.
243719 and the deed of absolute sale dated
August 28, 1991 null and void. As a consequence, TCT No. 243719 was cancelled, and TCT No. 20458 in
the name of Yapcinco was restored.14
On December 17, 2002, the petitioner filed an action for the nullification of document, cancellation of title,
reconveyance and damages against the respondents (Civil Case No. 9436). 15 He averred that the heirs of
Yapcinco had acted in bad faith in causing the issuance of TCT No. 354061 because they had known fully
well that the property had long been excluded from the estate of Yapcinco by virtue of the CFI decision
dated July 27, 1956, and which the CA affirmed on April 25, 1958; that a certificate of absolute sale was
issued in the name of Apolinario Cruz as early as 1959; and that he had a vested right in the property
pursuant to the deed of donation executed on September 5, 1972 by Apolinario Cruz in his favor, among
others.
The respondents countered that TCT No. 20458 contained an annotation to the effect that the property had
been released from the mortgage by virtue of an instrument dated August 28, 2001; and that, in any case, the
certificate of absolute sale and the deed of donation relied upon by the petitioner were not even inscribed in
TCT No. 20458.16
Ruling of the RTC
On July 7, 2003, the RTC rendered its judgment, disposing thusly:ChanRoblesVirtualawlibrary
WHEREFORE, judgment is hereby rendered in favor of the plaintiff by declaring the subject land covered
by TCT No. 354067 to be owned by the late Apolinario Cruz and is part of his estate; and
1. declaring null and void TCT No. 354067 and that a new title be issued to Apolinario Cruz.
Defendants should deliver to plaintiff or to this Court the owner's copy of TCT No. 354067; if they
will not do so after finality of this judgment, the Registry of Deeds is nevertheless authorized to
cancel TCT NO. 354067 and issue a new one in name [the] of Apolinario Cruz, even without the
surrender of the owner's copy;chanrobleslaw
2. declaring as null and void the extra-judicial settlement of the estate of late the Fernando Yapcinco
as far as the subject land is concerned;chanrobleslaw
3. claim for damages of both parties are denied.
SO ORDERED.17
The RTC opined that the respondents could not claim to have no knowledge that the property in litis was no
longer part of the estate of the late Fernando F. Yapcinco; that one of them had substituted the late Fernando
F. Yapcinco in the judicial foreclosure proceedings, and even appealed the adverse decision to the CA; that
they could not argue that they were not bound by the foreclosure of the mortgage due to the nonregistration
of the certificate of sale because as between the parties registration was not a requisite for the validity of the
foreclosure; and that they did not redeem the property until the present. 18
Decision of the CA
The respondents appealed to the CA, insisting that the RTC erred, as follows: (1) in declaring TCT No.
354061 as null and void, and issuing a new one to Apohnario Cruz and including the subject land in his
estate; (2) in holding that res judicata applied; (3) in not honoring that the TCT No. 20458 was free from
any lien and encumbrances; (4) in finding that they were aware of the proceedings in Civil Case No. CA-
G.R. No. 19332-R; (5) in not considering prescription, laches and estoppels to bar the action; and (6) in not
considering that they had the better right to the property. 19
On February 24, 2005, the CA promulgated its assailed decision, 20 reversing the judgment of the RTC, and
holding that due to the nonregistration of the certificate of sale, the period of redemption did not commence
to run. It also held that Apolinario Cruz never acquired title to the property and could not have conveyed and
transferred ownership over the same to his grandchildren through the deed of donation; 21 and that contrary to
the RTC's finding, Patrocinio Yapcinco's knowledge of Apolinario Cruz' interest over the subject property
was not tantamount to registration. It found that Patrocinio Yapcinco Kelly, the administratrix of the estate
of Fernando F. Yapcinco, and Patrocinio B. Yapcinco, one of the respondents, were two different persons,
such that it could not be concluded that the respondents had knowledge of the sale. Accordingly, it
concluded that the heirs of Fernando F. Yapcinco had the right to include the property as the asset of the
estate of Fernando F. Yapcinco.22
The petitioner moved for reconsideration, but on September 12, 2005, the CA denied his motion for
reconsideration, observing that there had been no order confirming the auction sale; hence, the respondents
were never divested of their rights and interest in the property.23
Issues
In this appeal, the petitioner posits the following issues:ChanRoblesVirtualawlibrary
I Before anything more, the Court clarifies that the failure of Apolinario Cruz to register the certificate of sale
433
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT APOLINARIO CRUZ, AS
PURCHASER IN A JUDICIAL FORECLOSURE OF SALE, NEVER ACQUIRED TITLE TO THE
SUBJECT PROPERTY BY THE MERE OMISSION TO REGISTER THE CERTIFICATE OF SALE.
II
THE COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THAT RESPONDENTS HAD NO
KNOWLEDGE OF, AND THUS COULD NOT BE BOUND BY, THE FORECLOSURE OF
MORTGAGE THAT WAS EARLIER CONDUCTED AS THE SAME WAS NOT SUPPORTED BY THE
REAL FACTS AND CIRCUMSTANCES ATTENDANT TO THE INSTANT CASE.
Ill
THE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT WHATEVER RIGHTS
BEING CLAIMED BY THE RESPONDENTS IN THE INSTANT CASE ARE ALREADY BARRED BY
LACHES.24chanRoblesvirtualLawlibrary
The petitioner insists that the rules and principles relied upon by the CA were applicable only to extra-
judicial foreclosure, not to a judicial foreclosure like the one herein; that the importance of registration of
the certificate of sale was true only in extrajudicial sale where it would be the reckoning point for the
exercise of the right of redemption;25cralawred that the respondents were aware of the auction sale and even
actually participated in the proceedings leading to the foreclosure, but they never tried to exercise their
equity of redemption, before or even after the foreclosure sale;26 that the family of Apolinario Cruz had been
occupying the property for more than 40 years from the time of the foreclosure sale; and that the
respondents should not be allowed to recover the lot on the basis of the non-registration of the certificate of
sale.
The petitioner argues that the non-registration of the certificate of sale did not affect the title acquired by
Apolinario Cruz as the purchaser in the judicial foreclosure of mortgage; 27 that the respondents' actual
knowledge of the judicial foreclosure was equivalent to automatic registration; that the doctrine of
indefeasibility of Torrens title was not absolute, and should yield to the right of another person based on
equitable principles of laches;28 that the finality of the judgment rendered in the judicial action for
foreclosure of mortgage was valid and binding on the respondents as the successors-in-interest of the
judgment debtor; and that whether or not respondent Patrocinio Yapcinco and Patrocinio Yapcinco Kelly
were the same persons, or whether Patrocinio Yapcinco was only the daughter of the latter who was the
administratrix was irrelevant because the respondents remained charged with knowledge of the foreclosure
sale by virtue of their being the successors-in-interest of the mortgagor.29
In contrast, the respondents maintain that they were lawfully entitled to the property in litis because there
was no registration of the certificate of sale or confirmation from the court; 30 that even the deed of donation
executed by Apolinario Cruz was not registered;31 that the issue revolved on whether or not there was a valid
transfer of ownership;32 and that with the release of mortgage being validly registered in the Office of
Registry of Deeds of Tarlac on February 11, 1992, thereby rendering the title free from any lien and
encumbrances, they already had the right to transfer the property in their names.33
Ruling of the Court
The petition for review is meritorious.
was of no consequence in this adjudication. The registration of the sale is required only in extra-judicial
foreclosure sale because the date of the registration is the reckoning point for the exercise of the right of
redemption. In contrast, the registration of the sale is superfluous in judicial foreclosure because only the
equity of redemption is granted to the mortgagor, except in mortgages with banking institutions. 34 The
equity of redemption is the right of the defendant mortgagor to extinguish the mortgage and retain
ownership of the property by paying the secured debt within the 90-day period after the judgment becomes
final, or even after the foreclosure sale but prior to the confirmation of the sale. 35In this light, it was patent
error for the CA to declare that: "By Apolinario Cruz's failure to register the 18 March 1958 Certificate of
Absolute Sale in the Office of the Register of Deeds, the period of redemption did not commence to run." 36
The applicable rule on March 18, 1959, the date of the foreclosure sale, was Section 3, Rule 7037 of
the Rules of Court, which relevantly provided that: "Such sale shall not affect the rights of persons holding
prior incumbrances upon the property or a part thereof, and when confirmed by an order of the court, it shall
operate to divest the rights of all the parties to the action and to vest their rights in the purchaser, subject to
such rights of redemption as may be allowed by law." The records show that no judicial confirmation of the
sale was made despite the lapse of more than 40 years since the date of the sale. Hence, it cannot be said that
title was fully vested in Apolinario Cruz.
However, the Court will not be dispensing true and effective justice if it denies the petition for review on the
basis alone of the absence of the judicial confirmation of the sale. Although procedural rules are not to be
belittled or disregarded considering that they insure an orderly and speedy administration of justice, it is
equally true that litigation is not a game of technicalities. Law and jurisprudence grant to the courts the
prerogative to relax compliance with procedural rules of even the most mandatory character, mindful of the
duty to reconcile both the need to speedily put an end to litigation and the parties' right to an opportunity to
be heard.38 The Rules of Court itself calls for a liberal construction of its rules with the view of promoting
their objective of securing a just, speedy and inexpensive disposition of every action and proceeding. 39
To better serve the ends of justice, the Court holds that the real issue to consider and resolve is who between
the parties had the better right to the property, not whether there was a valid transfer of ownership to
Apolinario Cruz.
It was not denied that Fernando F. Yapcinco, as the mortgagor, did not pay his obligation, and that his
default led to the filing of the action for judicial foreclosure against him, in which he actively participated in
the proceedings, and upon his death was substituted by the administratrix of his estate. In the end, the
decision in the action for judicial foreclosure called for the holding of the public sale of the mortgaged
property. Due to the subsequent failure of the estate of Fernando F. Yapcinco to exercise the equity of
redemption, the property was sold at the public sale, and Apolinario Cruz was declared the highest bidder.
Under the circumstances, the respondents as the successors-in-interest of Fernando F. Yapcinco were fully
bound by that decision and by the result of the ensuing foreclosure sale.
In this regard, determining whether Patrocinio Yapcinco Kelly, the adminsitratrix of the estate, and
respondent Patrocinio Yapcinco were one and the same person was not necessary. Even if they were not one
and the same person, they were both bound by the foreclosure proceedings by virtue of their being both
successors-in-interest of Fernando F. Yapcinco.
Although the respondents admitted the existence of the mortgage, they somehow denied knowledge of its
foreclosure. Yet, in asserting their superior right to the property, they relied on and cited the entry dated
February 11, 1992 concerning the release of mortgage inscribed on TCT No. 20458. This duplicity the Court
cannot countenance. Being the heirs and successors-in-interest of the late Fernando F. Yapcinco, they could
not repudiate the foreclosure sale and its consequences, and escape such consequences that bound and
434
concluded their predecessor-in-interest whose shoes they only stepped into. 40 Given their position on the
lack of judicial confirmation of the sale in favor of Apolinario Cruz, they should have extinguished the
mortgage by exercising their equity of redemption through paying the secured debt. They did not do so, and,
instead, they sought the annulment of TCT No. 243719 and caused the issuance of another title in their
name.
Even assuming that there was no foreclosure of the mortgage, such that the respondents did not need to
exercise the equity of redemption, the legal obligation to pay off the mortgage indebtedness in favor of
Apolinario Cruz nonetheless devolved on them and the estate of Fernando F. Yapcinco. They could not
sincerely rely on the entry about the release or cancellation of the mortgage in TCT No. 20458, because such
entry appeared to be unfounded in the face of the lack of any showing by them that either they or the estate
of Fernando F. Yapcinco had settled the obligation.
The petitioner did not tender any explanation for the failure of Apolinario Cruz to secure the judicial
confirmation of the sale. Fie reminds only that Apolinario Cruz and his successors-in-interest and
representatives have been in actual, notorious, public and uninterrupted possession of the property from the
time of his purchase at the foreclosure sale until the present.
The effect of the failure of Apolinario Cruz to obtain the judicial confirmation was only to prevent the title
to the property from being transferred to him. For sure, such failure did not give rise to any right in favor of
the mortgagor or the respondents as his successors-in-interest to take back the property already validly sold
through public auction. Nor did such failure invalidate the foreclosure proceedings. To maintain otherwise
would render nugatory the judicial foreclosure and foreclosure sale, thus unduly disturbing judicial stability.
The non-transfer of the title notwithstanding, Apolinario Cruz as the purchaser should not be deprived of the
property purchased at the foreclosure sale. With the respondents having been fully aware of the mortgage,
and being legally bound by the judicial foreclosure and consequent public sale, and in view of the
unquestioned possession by Apolinario Cruz and his successors-in-interest (including the petitioner) from
the time of the foreclosure sale until the present, the respondents could not assert any better right to the
property. It would be the height of inequity to still permit them to regain the property on the basis alone of
the lack of judicial confirmation of the sale. After all, under the applicable rule earlier cited, the judicial
confirmation operated only "to divest the rights of all the parties to the action and to vest their rights in
the purchaser, subject to such rights of redemption as may be allowed by law."
Consequently, the late Fernando F. Yapcinco and the respondents as his successors-in-interest were divested
of their right in the property, for they did not duly exercise the equity of redemption decreed in the decision
of the trial court. With Yapcinco having thereby effectively ceased to be the owner of the property sold, the
property was taken out of the mass of the assets of Yapcinco upon the expiration of the equity of
redemption.
WHEREFORE, the Court REVERSES and SETS ASIDE decision promulgated on February 24, 2005 by
the Court of Appeals; REINSTATES the decision rendered on July 7, 2003 by the Regional Trial Court,
Branch 63, in Tarlac City; and ORDERS the respondents to pay the costs of suit.
SO ORDERED.cralawlawlibrary
 THIRD DIVISION covered by Transfer Certificate of Title (TCT) No. 624835;3 the other was executed on July 18, 1996 over
properties covered by TCT Nos. 565381,4 263421,5 and 2746826 to secure the amount of PhP 2,500,000. All
G.R. No. 200567, June 22, 2015 of the mortgaged properties are registered under the spouses Reynoso's names, except for TCT No. 565381,
which is registered under CPR Promotions.7chanrobleslaw
METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. CPR PROMOTIONS AND
Thereafter, on December 8, 1997, the spouses Reynoso executed a continuing surety agreement 8 binding
MARKETING, INC. AND SPOUSES CORNELIO P. REYNOSO, JR. AND LEONIZA * F. themselves solidarity with CPR Promotions to pay any and all loans CPR Promotions may have obtained
REYNOSO, Respondents.
from petitioner MBTC, including those covered by the said PNs, but not to exceed PhP 13,000,000.

DECISION Upon maturity of the loans, respondents defaulted, prompting MBTC to file a petition for extra-judicial
foreclosure of the real estate mortgages, pursuant to Act No. 3135,9 as amended. MBTC's request for
VELASCO JR., J.: foreclosure,10 dated March 6, 1998, pertinently reads:chanRoblesvirtualLawlibrary
The Case We have the honor to request your good Office to conduct/undertake extra-judicial foreclosure sale
proceedings under Act No. 3135, as amended, and other applicable laws on the properties covered by two
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the September Real Estate Mortgages executed by CPR PROMOTIONS & MARKETING INC., represented by its
28, 2011 Decision1 and February 13, 2012 Resolution2 of the Court of Appeals (CA) rendered in CA-G.R. President Mr. Cornelio P. Reynoso and Treasurer Leoniza F. Reynoso and SPOUSES CORNELIO P.
CV No. 91424. Said rulings dismissed petitioner Metropolitan Banking and Trust Company's (MBTC's) REYNOSO, JR., AND LEONIZA F. REYNOSO in favour of the mortgagee, METROPOLITAN BANK
claim for deficiency payment upon foreclosing respondents' mortgaged properties and ordered the bank, AND TRUST COMPANY, to secure fifteen (15) loans with a total principal amount of TWELVE
instead, to return to respondent mortgagors the excess amount of PhP 722,602.22. MILLION EIGHT HUNDRED NINETY ONE THOUSAND THREE HUNDRED NINETY SEVEN
The Facts PESOS AND SEVENTY EIGHT CENTAVOS (P12,891,397.78), for breach of the terms of said
mortgage.11chanrobleslaw
The facts of the case, as culled from the records, are as follows:ChanRoblesVirtualawlibrary
xxxx
From February to October 1997, respondent CPR Promotions and Marketing, Inc. (CPR Promotions)
obtained loans from petitioner MBTC. These loans were covered by fifteen (15) promissory notes (PNs) all As Annex "R", a copy of the Statement of Account, showing that the total amount due on the loans of the
signed by respondents, spouses Leoniza F. Reynoso and Cornelio P. Reynoso, Jr. (spouses Reynoso), as borrowers/mortgagers which remains unpaid and outstanding as of February 10, 1998 was ELEVEN
Treasurer and President of CPR Promotions, respectively. The issued PNs are as follows: MILLION TWO HUNDRED SIXTEEN THOUSAND SEVEN HUNDRED EIGHTY TRHEE PESOS
PN No. Date Amount AND NINETY NINE CENTAVOS (Pll,216,783.99) x x x.12 (emphasis in the original)
1. 277894 (BDS-143/97) February 7, 1997 P 6,50,0,000.00 Subsequently, on May 5, 1998, the mortgaged properties covered by TCT Nos. 624835 and 565381 were
sold at a public auction sale. MBTC participated therein and submitted the highest bid in the amount of PhP
2. 281728 (BD-216/97) July 21, 1997 P 959,034.20
10,374,000. The day after, on May 6, 1998, petitioner again participated and won in the public auction sale
3. 281735 (BD-222/97) July 31, 1997 P 508,580.83 of the remaining mortgaged properties, having submitted the highest bid amounting to PhP 3,240,000. As a
4. 281736 (BD-225/97) August 12, 1997 P 291,732.50 result, petitioner was issued the corresponding Certificates of Sale on July 15 and 16, 1998, covering the
5. 281737 (BD-226/97) August 12, 1997 P 157,173.12 properties subjected to the first and second public auctions, respectively.
6. 281745 (BD-229/97) August 22, 1997 P 449,812.25
7. 281747 (BDS-94854.696.00.999) September 3, 1997 P 105,000.00 Notwithstanding the foreclosure of the mortgaged properties for the total amount of PhP 13,614,000,
8. 281749 (BD-236/97) September 11, 1997 P 525,233.93 petitioner MBTC alleged that there remained a deficiency balance of PhP 2,628,520.73, plus interest and
charges as stipulated and agreed upon in the PNs and deeds of real estate mortgages. Despite petitioner's
9. 281750 (BD-238/97) September 12, 1997 P 1,310,099.36
repeated demands, however, respondents failed to settle the alleged deficiency. Thus, petitioner filed an
10. 473410 (BD-239/97) September 19, 1997 P 251,725.00 action for collection of sum of money against respondents, docketed as Civil Case No. 99-230,
11. 473414 (BD-240/97) September 19, 1997 P 288,975.66 entitled Metropolitan Bank and Trust Company v. CPR Promotions and Marketing, Inc. and Spouses
12. 473412 (BD-244/97) September 26, 1997 P 62,982.53 Cornelio Reynoso, Jr. and Leoniza F. Reynoso.
13. 473411 (BD-245/97) September 26, 1997 P 156,038.85 Ruling of the Regional Trial Court
14. 473413 (BD-251/97) October 3, 1997 P 767,512.30
15. 473431 (BD-252/97) October 6, 1997 P 557,497.45 In its Decision13 dated October 11, 2007, the Regional Trial Court, Branch 59 in Makati City (RTC) ruled in
favor of petitioner that there, indeed, was a balance of PhP 2,628,520.73, plus interest and charges, as of
TOTAL PRINCIPAL AMOUNT 12,891,397.78
September 18, 1998, and that respondents are liable for the said amount, as part of their contractual
To secure the loans, the spouses Reynoso executed two deeds of real estate mortgage on separate dates. The obligation.14 The court disposed of the case in this wise:chanRoblesvirtualLawlibrary
first mortgage, securing the amount of PhP 6,500,000, was executed on February 2, 1996 over real estate

435
WHEREFORE, premises considered, judgment is hereby rendered ordering [respondents], jointly and
severally, to pay [petitioner] Metro bank, as follows:ChanRoblesVirtualawlibrary
a] the amount of PhP 2,628,520.73 plus stipulated interest and penalty charges stipulated in the Promissory
Notes marked as Exhibits A to O until full payment thereof; and
b] the costs of the suit.
SO ORDERED.chanroblesvirtuallawlibrary
Respondents timely moved for reconsideration of the RTC's Decision, which was denied through the trial
court's February 7, 2008 Order. Aggrieved, respondents elevated the case to the CA.
Ruling of the Court of Appeals
The appellate court, through the assailed Decision, reversed the court a quo and ruled in favor of
respondents. The fallo of the said Decision reads:chanRoblesvirtualLawlibrary
Wherefore, in view of the foregoing, the decision appealed from is reversed, and the plaintiff-appellee
Metrobank is ordered to refund or return to the defendants-appellants Cornelio and Leoniza Reynoso the
amount of PhP 722,602.22 representing the remainder of the proceeds of the foreclosure sale, with legal
interest of six percent per annum from the date of filing of the answer with counterclaim on March 26, 1999,
until paid.
SO ORDERED.15
Supporting the reversal is the CA's finding that there was a sudden change in the terminology used, from
"total amount due" to "principal amount."16 According to the CA, from February to May 1998, the amount
sought to be collected ballooned from PhP 11,216,783.99 to PhP 12,891,397.78. From this apparently
unexplained increase, the CA deduced that the increased amount must mean the principal and interest and
other charges. Furthermore, the appellate court found that petitioner failed to prove that there was a
deficiency, since the records failed to corroborate the claimed amount. As noted by the CA, "[Petitioner] did
not even introduce the continuing surety agreement on which the trial court gratuitously based its decision."
On October 24, 2011, petitioner filed a motion for reconsideration of the assailed Decision, which the
appellate court denied in its assailed February 13, 2012 Resolution.
The Issues
Hence this recourse, on the following issues:ChanRoblesVirtualawlibrary
Whether or not the CA gravely abused its discretion when it failed to consider the continuing surety
agreement presented in evidence and in ruling that petitioner MBTC failed to prove that the spouses
Reynoso are solidarity liable with respondent CPR Promotions.
Whether or not the CA gravely abused its discretion when it grossly misappreciated the promissory notes,
real estate mortgages, petition for extrajudicial foreclosure of mortgage, certificates of sale and statement of
account marked in evidence and ruled that petitioner MBTC failed to prove that a deficiency balance
resulted after conducting the extrajudicial foreclosure sales of the mortgaged properties.
The Arguments
Anent the first issue, MBTC faults the appellate court for finding that it did not introduce the continuing
surety agreement on which the RTC based its ruling that respondent spouses are solidarity liable with
respondent CPR Promotions.17chanrobleslaw
436
As regards the second issue, petitioner asserts that the CA's grant of a refund valued at PhP 722,602.22 plus
legal interest of six percent (6%) in favor of respondents is erroneous for two reasons: first, respondents
never set up a counterclaim for refund of any amount;18 and second, the total outstanding obligation as of
February 10, 1998, to which the full amount of the bid prices was applied, is PhP 11,216,783.99 and not PhP
12,891,397.78, which was used by the CA in its computation. 19chanrobleslaw
Lastly, petitioner claims that respondents should be made to answer for certain specific expenses connected
with the foreclosure, i.e., filing fees, publication expense, Sheriffs Commission on Sale, stipulated attorney's
fee, registration fee for the Certificate of Sale, insurance premium and other miscellaneous expenses, in the
amounts of PhP 1,373,238 and PhP 419,166.67 for the first and second foreclosure sales,
respectively.20chanrobleslaw
In their Comment,21 respondents maintained the propriety of the CA's grant of a refund, arguing that in their
Answer with Compulsory Counterclaim, they laid-down in detail the excess of the prices of the foreclosed
properties over their obligation.22 Respondents then went on and argued that "from the beginning of the
instant case in the trial court, [they] have already raised in issue the fact of [petitioner's] taking-over of
[their] lands with values over and above the latter's financial liabilities." 23Thus, they postulate that the CA
did right when it touched on the issue and ruled thereon. 24chanrobleslaw
Furthermore, respondents insist that there is actually no difference between the PhP 12,891,397.78 and the
PhP 11,261,783.99 amounts except for the accumulated interest, penalties, and other charges. 25Too,
according to them, this is the reason why what respondent CPR owed petitioner at that time increased
substantially from that on February 10, 1998, when the amount was just PhP 11,216,783.99. 26chanrobleslaw
The Court's Ruling
We partially grant the petition. While We fully agree with the CA that MBTC was not able to prove the
amount claimed, We however, find that neither were respondents able to timely setup their claim for refund.
Respondents belatedly raised their compulsory counterclaim
Rule 6 of the Rules of Court defines a compulsory counterclaim follows:chanRoblesvirtualLawlibrary
Section 7. Compulsory counterclaim. — A compulsory counterclaim is one which, being cognizable by the
regular courts of justice, arises out of or is connected with the transaction or occurrence constituting the
subject matter of the opposing party's claim and does not require for its adjudication the presence of third
parties of whom the court cannot acquire jurisdiction. Such a counterclaim must be within the jurisdiction of
the court both as to the amount and the nature thereof, except that in an original action before the Regional
Trial Court, the counterclaim may be considered compulsory regardless of the
amount.chanroblesvirtuallawlibrary
Accordingly, a counterclaim is compulsory if: (a) it arises out of or is necessarily connected with the
transaction or occurrence which is the subject matter of the opposing party's claim; (b) it does not require for
its adjudication the presence of third parties of whom the court cannot acquire jurisdiction; and (c) the court
has jurisdiction to entertain the claim both as to its amount and nature, except that in an original action
before the RTC, the counterclaim may be considered compulsory regardless of the amount. 27chanrobleslaw
In determining whether a counterclaim is compulsory or permissive, We have, in several cases, utilized the
following tests:28chanrobleslaw
(1) Are the issues of fact or law raised by the claim and the counterclaim largely the same?
 reflected in the certificate of Sale, the principal amount was said to be P12,891,397.78. What is the meaning
(2) Would res judicata bar a subsequent suit on defendant's claims, absent the compulsory counterclaim of the change from total amount due to principal amount? If from February to May 1998, a matter of three
rule? months, the amount sought to be collected ballooned to P12,891,397.78, the increase could have resulted
from no other source than the interest and other charges under the promissory notes after the defendants
(3) Will substantially the same evidence support or refute plaintiffs claim as well as the defendant's incurred in default. Thus, the amount of P12,891,397.78 as of May 1998, must mean the principal and
counterclaim? interest and other charges. The statement in the certificates of sale that it is the principal amount is a
subtle change in language, a legerdemain to suggest that the amount does not include the interest and other
(4) Is there any logical relation between the claim and the counterclaim, such that the conduct of separate charges.37 (emphasis added, citations omitted)
trials of the respective claims of the parties would entail a substantial duplication of effort and time by the In short, the CA concluded that the amount of PhP 12,891,397.78 is actually comprised of the PhP
parties and the court? This test is the "compelling test of compulsoriness." 29chanrobleslaw 11,216,783.99 due as of February 10, 1998, plus additional interest and other charges that became due from
February 10, 1998 until the date of foreclosure on May 5, 1998.
Based on the above tests, it is evident that a claim for recovery of the excess in the bid price vis-a-vis the
amount due should be interposed as a compulsory counterclaim in an action for recovery of a deficiency The appellate court is mistaken.
filed by the mortgagee against the debtor-mortgagor. First, in both cases, substantially the same evidence is
needed in order to prove their respective claim. Second, adjudication in favor of one will necessarily bar the By simply adding the figures stated in the PNs as the principal sum, it can readily be seen that the amount of
other since these two actions are absolutely incompatible with each other; a debt cannot be fully paid and PhP 12,891,397.78 actually pertains to the aggregate value of the fifteen (15) PNs,
partially unpaid at the same time. Third, these two opposing claims arose from the same set of transactions. viz:chanRoblesvirtualLawlibrary
And finally, if these two claims were to be the subject of separate trials, it would definitely entail a PN No. Amount
substantial and needless duplication of effort and time by the parties and the court, for said actions would 1. 277894 (BDS-143/97)38 P 6,500,000.00
involve the same parties, the same transaction, and the same evidence. The only difference here would be in 2. 281728 (BD-216/97)39 P 959,034.20
the findings of the courts based on the evidence presented with regard to the issue of whether or not the bid 3. 281735 (BD-222/97)40 P 508,580.83
prices substantially cover the amounts due. 4. 281736 (BD-225/97)41 P 291,732.50
5. 281737 (BD-226/97)42 P 157,173.12
Having determined that a claim for recovery of an excess in the bid price should be set up in the action for 6. 281745 (BD-229/97)43 P 449,812.25
payment of a deficiency as a compulsory counterclaim, We rule that respondents failed to timely raise the 7. 281747 (BDS-94854.696.00.999)44 P 105,000.00
same. 8. 281749(BD-236/97)45 P 525,233.93
9. 281750 (BD-238/97)46 P 1,310,099.36
It is elementary that a defending party's compulsory counterclaim should be interposed at the time he files 10. 473410 (BD-239/97)47 P 251,725.00
his Answer,30 and that failure to do so shall effectively bar such claim. 31 As it appears from the records, what 11. 473414 (BD-240/97)48 P 288,975.66
respondents initially claimed herein were moral and exemplary damages, as well as attorney's fees. 32 Then, 12. 473412 (BD-244/97)49 P 62,982.53
realizing, based on its computation, that it should have sought the recovery of the excess bid price, 13. 473411 (BD-245/97)50 P 156,038.85
respondents set up another counterclaim, this time in their Appellant's Brief filed before the 14. 473413 (BD-251/97)51 P 767,512.30
CA.33 Unfortunately, respondents' belated (assertion proved fatal to their cause as it did not cure their failure 15. 473431 (BD-252/97)52 P 557,497.45
to timely raise such claim in their Answer. Consequently, respondents' claim for the excess, if any, is TOTAL PRINCIPAL AMOUNT 12,891,397.78
already barred. With this, We now resolve the substantive issues of this case. This belies the findings of the CA that PhP 12,891,397.78 is the resulting value of PhP 11,216,783.99 plus
interest and other charges. Consequently, the CA's conclusion that there is an excess of PhP 722,602.22,
The CA erred in ruling that the total amount due was PhP 12,891,397.78 after deducting the amount of PhP 12,891,397.78 from the total bid price of PhP 13,614,000, is erroneous.

Basic is the rule that a Petition for Review on Certiorari under Rule 45 of the Rules of Court should only Nevertheless, while the CA's factual finding as to the amount due is flawed, petitioner, as discussed below,
cover questions of law.34 Moreover, findings of fact of the CA are generally final and conclusive and this is still not entitled to the alleged deficiency balance of PhP 2,628,520.73.
Court will not review them on appeal.35 This rule, however, admits of several exceptions, 36 such as when the
findings of fact are conflicting, manifestly mistaken, unsupported by evidence or the result of a MBTC failed to prove that there is a deficiency balance of PhP 2,628,520.73
misapprehension of acts, or when the findings are contrary to that of the trial court, as in this case.
To support its deficiency claim, petitioner presented a Statement of Account,53 which refers to the amounts
To recall, the CA, in its assailed Decision, made the following findings as regards the amount due on the due as of May 5, 1998, the date of the first foreclosure sale, to wit:chanRoblesvirtualLawlibrary
loan against which the proceeds from the auction sales are to be applied:chanRoblesvirtualLawlibrary Statement of Account as of May 05, 1998
In the application for extrajudicial foreclosure sale dated March 6, 1998, the total amount due as of February PN No. Principal Amt Outs. PDI Penalty
10, 1998 was stated to be P11,216,783.99. The plaintiff categorically declared that P11,216,783.99 was the 1 BD#216/97 489,219.20 54,808.77 49,166.53
total amount due on February 10, 1998. By the time the auction sales were conducted, in May 1998, as

437
 2 BD#222/97 167,289.35 18,613.61 16,310.71 To recall, MBTC admitted that the amount due as of February 10, 1998 is PhP 11,216,783.99, inclusive
3 BD#225/97 291,732.50 32,683.72 27,422.86 of interests and charges. As alleged in the petition:chanRoblesvirtualLawlibrary
4 BD#226/97 44,694.50 5,007.24 4,201.28 57. Firstly, it should be noted that respondents' total unpaid obligations inclusive of interest and penalties as
of 10 February 1998 amounted to Php 11,216,783.99. This amount was the subject of petitioner Metrobank's
5 BD#229/97 435,229.25 48,760.10 44,393.38
Petitions for Extra]udicial Foreclosure of Mortgage and NOT Php 12,891,397.78 which is the total principal
6 BD#238/97 365,238.55 40,918.83 33,236.71 amount of respondents' loan obligations at the time when they obtained said loans as shown in the
7 BD#233/97 105,000.00 11,763.50 9,082.50 Promissory Notes and the Certificates of Sale. After the execution of the Promissory Notes, payments were
8 BD#244/97 62,982.53 7,056.13 5,290.53 made, although insufficient, which resulted in the balance of PhP 11,216,783.99 as of February 1198
9 BD#236/97 497,649.70 56,135.10 38,070.20 inclusive of interest and penalties.58 xxx
10 BD#240/97 145,950.00 16,463.20 11,165.18 If the total amount due as of February 10, 1998 is PhP 11,216,783.99 is already inclusive of interests and
11 BD#245/97 156,038.85 17,481.55 11,897.43 penalties, the principal amount, exclusive of interests and charges, would naturally be lower than the PhP
11,216,783.99 threshold. How petitioner made the determination in its Statement of Account that the
12 BD#239/97 210,421.50 22,605.52 15,360.77
principal amount due on the date of the auction sale is PhP 12,450,652.22 is then questionable, nay
13 BD#251/97 572,470.15 64,574.86 38,232.57 impossible, unless respondents contracted another loan anew.
14 BD#252/97 557,497.45 47,896.46 31,110.63
16 BDS#143/97 6,500,000.00 573,681.89 336,818.28 Moreover, the amounts petitioner itself supplied would result in the following
17 BDS#218/97 1,800,000.00 93,536.05 74,401.15 computation:chanRoblesvirtualLawlibrary
18 Fire Insurance 49,238.69 0.00 1,698.73 PhP 11,216,783.99 Total outstanding obligation as of February 10, 1998
TOTAL 12,450,652.22 1,111,986.53 747,859.44 1,373,238.04 Add: Alleged May 5, 1998 public auction sale expenses
Add: Additional interests and charges earned between February 10, 1998 to May
GRAND TOTAL 14,310,498.19 (no Consistent data)
5, 1998
Applying the proceeds from the auction sales to the foregoing amount, according to petitioner, would result (no consistent data) Subtotal: Amount due as of May 5, 1998
in a deficiency balance of PhP 2,443,143.43. Afterwards, the said amount allegedly earned interest for four 10,374,000.00 Less: May 5 Bid Price to be applied to the amount due
(4) months in the amount of PhP 185,377.30, 54 bringing petitioner's claim for deficiency judgment to a total 419,166.67 Add: Alleged May 6, 1998 public auction sale expenses
of PhP 2,628,520.73.55chanrobleslaw (no consisted data) Add: Interests and charges earned from May 5 to 6, 1998
3,240,000.00 Less: May 6 Bid Price to be applied to the amount due
We are not convinced. Total: Deficiency reflected in the Statement of Account from May 5 to September 18,
PhP 2,443,143.43
1998
We have already ruled in several cases56 that in extrajudicial foreclosure of mortgage, where the proceeds of As can be gleaned, petitioner failed to sufficiently explain during the proceedings how it came up with the
the sale are insufficient to pay the debt, the mortgagee has the right to recover the deficiency from the alleged "deficiency" in the amount of PhP 2,443,143.43, as per the Statement of Account. Reversing the
debtor.57 In ascertaining the deficit amount, Sec. 4, Rule 68 of the Rules of Court is elucidating, to formula, petitioner's claim would only be mathematically possible if the missing interest and penalties
wit:chanRoblesvirtualLawlibrary for the three-month period—from February 10, 1998 to May 6, 1998—amounted to PhP
Section 4. Disposition of proceeds of sale. — The amount realized from the foreclosure sale of the 3,047,954,73,59 which is inconsistent with MBTC's declaration in its Statement of Account as of May 5,
mortgaged property shall, after deducting the costs of the sale, be paid to the person foreclosing the 1998.60 Needless to say, this amount is not only unconscionable, it also finds no support from any of the
mortgage, and when there shall be any balance or residue, after paying off the mortgage debt due, the same statement of accounts and loan stipulations agreed upon by the parties.
shall be paid to junior encumbrancers in the order of their priority, to be ascertained by the court, or if there
be no such encumbrancers or there be a balance or residue after payment to them, then to the mortgagor or Given MBTC's conflicting, if not irreconcilable, allegations as to the amount due as of the date of
his duly authorized agent, or to the person entitled to it. (emphasis added) foreclosure—as noted in the statement of accounts, the petition for foreclosure, and the promissory notes—
Verily, there can only be a deficit when the proceeds of the sale is not sufficient to cover (1) the costs of the computation offered by MBTC cannot be accepted at face value. Consequently, there can then be no
foreclosure proceedings; and (2) the amount due to the creditor, inclusive of interests and penalties, if any, at basis for determining the value of the additional interests and penalty charges that became due, and, more
the time of foreclosure. importantly, whether or not there was indeed a deficiency balance at the time the mortgaged properties were
foreclosed.
a. Petitioner failed to prove the amount due at the time of foreclosure
In addition, it is noticeable that petitioner's presentation of the computation is circuitous and needlessly
Having alleged the existence of a deficiency balance, it behooved petitioner to prove, at the very least, the lengthened. As a matter of fact, nowhere in the petition, in its complaint, 61 reply,62 pre-trial brief,63among
amount due at the date of foreclosure against which the proceeds from the auction sale would be applied. others, did it make a simple computation of respondents' obligation as well as the amounts to be applied to
Otherwise, there can be no basis for awarding the claimed deficiency balance. Unfortunately for petitioner, it, or even a summary thereof, when it could have easily done so.
it failed to substantiate the amount due as of May 5, 1998 as appearing in its Statement of Account.
b. Petitioner failed to prove the amount of expenses incurred in foreclosing the mortgaged prop erties

438
 Sub-total PhP 419,166.67
Another obstacle against petitioner's claim for deficiency balance is the burden of proving the amount of Petitioner's argument is untenable.
expenses incurred during the foreclosure sales. To recall, petitioner alleged that it incurred expenses
totalling PhP 1,373,238.04 and PhP 419,166.67 for the first and second public auction sales, respectively. First, the Court cannot take judicial notice of the attorney's fees being claimed by petitioner because
However, in claiming that there is a deficiency, petitioner only submitted the following pieces of evidence, although 10% was the rate agreed upon by the parties, We have, in a line of cases, held that the percentage
to wit:chanRoblesvirtualLawlibrary to be charged can still be fixed by the Court. For instance, in Mambulao Lumber Company v. Philippine
1. The fifteen (15) promissory notes (Exhibits A to O); National Bank,65 the Court held:chanRoblesvirtualLawlibrary
In determining the compensation of an attorney, the following circumstances should be considered: the
2. Continuing Surety Agreement (Exhibit P); amount and character of the services rendered; the responsibility imposed; the amount of money or the value
of the property affected by the controversy, or involved in the employment; the skill and experience called
3. Real Estate Mortgage (Exhibits Q & R); for in the performance of the service; the professional standing of the attorney; the results secured; and
whether or not the fee is contingent or absolute, it being a recognized rule that an attorney may properly
4. Petition for Sale under Act. No. 3135, as amended (Exhibit S); charge a much larger fee when it is to be contingent than when it is not. From the stipulation in the mortgage
contract earlier quoted, it appears that the agreed fee is 10% of the total indebtedness, irrespective of
5. Notices of Sheriff s Sale (Exhibits T & U); the manner the foreclosure of the mortgage is to be effected. The agreement is perhaps fair enough in
case the foreclosure proceedings is prosecuted judicially but, surely, it is unreasonable when, as in this
6. Affidavits of Publication (Exhibits V & W); case, the mortgage was foreclosed extra-judicially, and all that the attorney did was to file a petition
for foreclosure with the sheriff concerned. x x x (emphasis added)
7. Certificates of Posting and a Xerox copy thereof (Exhibits X & Y); Similarly, in Bank of the Philippine Islands, Inc. v. Spouses Norman and Angelina Yu,66 the Court reduced
the claim for attorney's fees from 10% to 1% based on the following reasons: (1) attorney's fee is not
8. Certificates of Sale (Exhibits Z & AA); essential to the cost of borrowing, but a mere incident of collection; (2) 1% is just and adequate because the
mortgagee bank had already charged foreclosure expenses; (3) attorney's fee of 10% of the total amount due
9. Demand Letters (Exhibits BB & CC); and is onerous considering the rote effort that goes into extrajudicial foreclosures.

10. Statement of Account (Exhibit DD).chanroblesvirtuallawlibrary Second, the Court cannot also take judicial notice of the expenses incurred by petitioner in causing the
Curiously, petitioner never offered as evidence receipts proving payment of filing fees, publication publication of the notice of foreclosure and the cost of insurance. This is so because there are no standard
expenses, Sheriffs Commission on Sale, attorney's fee, registration fee for the Certificate of Sale, insurance rates cited or mentioned by petitioner that would allow Us to take judicial notice of such expenses. It is not
premium and other miscellaneous expenses, all of which MBTC claims that it incurred. Instead, petitioner unthinkable that the cost of publication would vary from publisher to publisher, and would depend on
urges the Court to take judicial notice of the following expenses: 64cralawred several factors, including the size of the publication space. Insurance companies also have their own
May 5, 1998 auction sale computations on the insurance premiums to be paid by the insurer, which the courts cannot be expected to
expenses be knowledgeable of. To be sure, in arguing for the Court to take judicial notice of the alleged expenses,
Filing Fee PhP 52,084.00 MBTC merely cited Sec. 3 of Act 3135 requiring publication and the mortgage agreement provision on the
Publication Expenses 24,267.75 insurance requirement, without more.67 Said provisions never expressly provided for the actual cost of
Sheriffs Commission on Sale 207,560.00 publication and insurance, nor any formulae for determining the same. Thus, the claims for publication and
Registration fee and other insurance expenses ought to be disallowed.
32,644.50
Miscellaneous Expenses
Attorney's Fees (10% of total Third, the claims for registration fees and miscellaneous expenses were also never substantiated by receipts.
1,005,744.37
amount claimed)
Fire Insurance 50,937.42 In sum, given petitioner's failure to establish the sum due at the time the mortgaged properties were
Sub-total PhP 1,373,238.04 foreclosed and sold via public auction, as well as the expenses incurred in those foreclosure proceedings, it
would be impossible for the Court to determine whether or not there is, indeed, a deficiency balance
May 6, 1998 auction sale petitioner would have been entitled to.
expenses Conclusion
Publication Expenses 24,267.75
Sheriffs Commission on Sale 64,880.00
Registration fee and other In demanding payment of a deficiency in an extrajudicial foreclosure of mortgage, proving that there is
16,593.00
Miscellaneous Expenses indeed one and what its exact amount is, is naturally a precondition thereto. The same goes with a claim for
Attorney's Fees (10% of total reimbursement of foreclosure expenses, as here. In this regard, it is elementary that the burden to prove a
313,425.92
amount claimed) claim rests on the party asserting such. Ei incumbit probatio qui dicit, non qui negat. He who asserts, not he

439
who denies, must prove.68 For having failed to adequately substantiate its claims, We cannot sustain the
finding of the trial court that respondents are liable for the claimed deficiency, inclusive of foreclosure
expenses. Neither can We sustain the CA's finding that respondents are entitled to the recovery of the
alleged excess payment.

In light of the foregoing, the Court need not belabor the other assigned errors.

WHEREFORE, premises considered, the instant petition is hereby PARTIALLY GRANTED.

Accordingly, the Decision of the Court of Appeals dated September 28, 2011 in CA-G.R. CV No. 91424
and its February 13, 2012 Resolution are hereby AFFIRMED with MODIFICATION. The award of
refund in favor of respondents in the amount of P722,602.22 with legal interest of six percent (6%) per
annum is hereby DELETED.

No pronouncement as to costs.

SO ORDERED.cralawlawlibrary

440
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 151334 February 13, 2013
CAROLINA (CARLINA) VDA. DE FIGURACION, HEIRS OF ELENA FIGURACION-ANCHETA,
namely: LEONCIO ANCHETA, JR., and ROMULO ANCHETA, HEIRS OF HILARIA A.
FIGURACION, namely: FELIPA FIGURACION-MANUEL, MARY FIGURACION-GINEZ, and
EMILIA FIGURACION-GERILLA, AND HEIRS OF QUINTIN FIGURACION, namely: LINDA M.
FIGURACION, LEANDRO M. FIGURACION, II, and ALLAN M. FIGURACION, Petitioners,
vs.
EMILIA FIGURACION-GERILLA, Respondent.
DECISION
REYES, J.:
At bar is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, assailing the
Decision2 dated December 11, 2001 of the Court of Appeals (CA) in CA-G.R. CV No. 58290, which
reversed and set aside the Decision3 dated June 26, 1997 of the Regional Trial Court (RTC) of Urdaneta,
Pangasinan, Branch 49. The RTC decision (1) dismissed respondent Emilia Figuracion-Gerilla’s (Emilia)
complaint for partition, annulment of documents, reconveyance, quieting of title and damages, and (2)
annulled the Affidavit of Self-Adjudication executed by petitioner Carolina (Carlina) Vda. De Figuracion
(Carolina).
The Facts
The parties are the heirs of Leandro Figuracion (Leandro) who died intestate in May 1958. Petitioner
Carolina is the surviving spouse. The other petitioners – Elena Figuracion-Ancheta, Hilaria A. Figuracion
(Hilaria), Felipa Figuracion-Manuel (Felipa), Quintin Figuracion, and Mary Figuracion-Ginez – and
respondent Emilia were Carolina and Leandro’s children. 4
Subject of the dispute are two parcels of land both situated in Urdaneta, Pangasinan, which were acquired by
Leandro during his lifetime. These properties were: (1) Lot No. 2299 with a land area of 7,547 square meters
originally covered by Transfer Certificate of Title (TCT) No. 4221-P;5 and (2) Lot No. 705 measuring 2,900
square meters and covered by TCT No. 4220-P. Both lands were registered in the name of "Leandro
Figuracion married to Carolina Adviento". Leandro executed a Deed of Quitclaim over the above real
properties in favor of his six (6) children on August 23, 1955. Their shares, however, were not delineated
with particularity because spouses Leandro and Carolina reserved the lots and its fruits for their expenses.
Also involved in the controversy is Lot No. 707 of the Cadastral Survey of Urdaneta, Pangasinan, with an
area of 3,164 square meters originally owned by Eulalio Adviento (Eulalio), covered by Original Certificate
of Title (OCT) No. 15867 issued in his name on August 21, 1917. Eulalio begot Agripina Adviento
441
(Agripina) with his first wife Marcela Estioko (Marcela), whom Eulalio survived. When he remarried,
Eulalio had another daughter, herein petitioner Carolina, with his second wife, Faustina Escabesa
(Faustina).6
On November 28, 1961, Agripina7 executed a Deed of Quitclaim8 over the eastern half of Lot No. 707 in
favor of her niece, herein respondent Emilia.
Soon thereafter or on December 11, 1962, petitioner Carolina executed an Affidavit of Self-
Adjudication9adjudicating unto herself the entire Lot No. 707 as the sole and exclusive heir of her deceased
parents, Eulalio and Faustina.10 On the same date, Carolina also executed a Deed of Absolute Sale11 over Lot
No. 707 in favor of petitioners Hilaria and Felipa, who in turn immediately caused the cancellation of OCT
No. 15867 and the issuance of TCT No. 42244 in their names. 12
In 1971, Emilia and her family went to the United States and returned to the Philippines only in 1981. Upon
her return and relying on the Deed of Quitclaim, she built a house on the eastern half of Lot No. 707. 13
The legal debacle of the Figuracions started in 1994 when Hilaria and her agents threatened to demolish the
house of Emilia who, in retaliation, was prompted to seek the partition of Lot No. 707 as well as Lot Nos.
2299 and 705. The matter was initially brought before the Katarungang Pambarangay, but no amicable
settlement was reached by the parties.14 On May 23, 1994, respondent Emilia instituted the herein
Complaint15 for the partition of Lot Nos. 2299, 705 and 707, annulment of the Affidavit of Self-
Adjudication, Deed of Absolute Sale and TCT No. 42244, reconveyance of eastern half portion of Lot No.
707, quieting of title and damages.
In opposition, the petitioners averred the following special and affirmative defenses: (1) the respondent’s
cause of action had long prescribed and that she is guilty of laches hence, now estopped from bringing the
suit; (2) TCT No. 42244 in the name of Felipa and Hilaria have already attained indefeasibility and
conclusiveness as to the true owners of Lot No. 707; and (3) an action for partition is no longer tenable
because Felipa and Hilaria have already acquired rights adverse to that claimed by respondent Emilia and
the same amount to a repudiation of the alleged co-ownership.16
During pre-trial conference, the issues were simplified into: (1) whether or not Lot Nos. 2299 and 705 are
the exclusive properties of Leandro; and (2) whether or not respondent Emilia is the owner of the eastern
half of Lot No. 707.17
On the basis of the evidence adduced by the parties, the RTC rendered its Decision dated June 26, 1997
disposing as follows:
WHEREFORE, premises considered, the complaint for partition, reconveyance, quieting of title and
damages is hereby ordered dismissed whereas the affidavit of self-adjudication[,] deed of sale and the
transfer certificate of title involving Lot 707 are hereby declared null and void.
No costs.
SO ORDERED.18
The RTC ruled that a partition of Lot Nos. 2299 and 705 will be premature since their ownership is yet to be
transmitted from Leandro to his heirs whose respective shares thereto must still be determined in estate
settlement proceedings. Anent Lot No. 707, the RTC held that petitioner Carolina transferred only her one-
half (½) share to Felipa and Hilaria and any conveyance of the other half pertaining to Agripina was void.
While the RTC nullified the Affidavit of Self-Adjudication, Deed of Absolute Sale and TCT No. 42244, it
refused to adjudicate the ownership of the lot’s eastern half portion in favor of respondent Emilia since a
settlement of the estate of Eulalio is yet to be undertaken.19
Respondent Emilia appealed to the CA, which, in its Decision dated December 11, 2001, ruled that the RTC
erred in refusing to partition Lot No. 707. The CA explained that there is no necessity for placing Lot No.
707 under judicial administration since Carolina had long sold her ½ pro indiviso share to Felipa and
Hilaria. Thus, when Carolina sold the entire Lot No. 707 on December 11, 1962 as her own, the sale
affected only her share and not that belonging to her co-owner, Agripina. The proper action in such case is
not the nullification of the sale, or for the recovery of possession of the property owned in common from the
third person, but for a division or partition of the entire lot. Such partition should result in segregating the
portion belonging to the seller and its delivery to the buyer.
The CA, however, agreed with the RTC that a partition of Lot Nos. 2299 and 705 is indeed premature
considering that there is a pending legal controversy with respect to Lot No. 705 and the accounting of the
income from Lot No. 2299 and of the expenses for the last illness and burial of Leandro and Carolina, for
which the lots appear to have been intended.
Accordingly, the decretal portion of the CA decision reads:
WHEREFORE, premises considered, the present appeal is hereby GRANTED and the decision appealed
from in Civil Case No. U-5826 is hereby VACATED and SET ASIDE. A new judgment is hereby rendered
declaring Lot No. 707 covered by TCT No. 42244 to be owned by appellant Emilia Figuracion-Gerilla
[herein respondent], ½ pro indiviso share, appellee Felipa Figuracion [herein petitioner], ¼ pro
indiviso share, and appellee Hilaria Figuracion [herein petitioner], ¼ pro indiviso share, who are hereby
directed to partition the same and if they could not agree on a partition, they may petition the trial court for
the appointment of a commissioner to prepare a project of partition, in accordance with the procedure as
provided in Rule 69 of the 1997 Rules of Civil Procedure, as amended.
No pronouncement as to costs.
SO ORDERED.20
Respondent Emilia appealed the CA’s decision to the Court, docketed as G.R. No. 154322. In a Decision
promulgated on August 22, 2006, the Court denied the appeal, concurring with the CA’s ruling that a
partition of Lot Nos. 2299 and 705 would be inappropriate considering that: (1) the ownership of Lot No.
705 is still in dispute; and (2) there are still unresolved issues as to the expenses chargeable to the estate of
Leandro.
The present petition involves the appeal of the petitioners who attribute this sole error committed by the CA:
442
THE DECISION RENDERED BY THE HONORABLE COURT OF APPEALS IS CONTRARY TO LAW
AND EXISTING JURISPRUDENTIAL DICTA LAID DOWN BY THE HONORABLE SUPREME
COURT.21
In view of the Court’s ruling in G.R. No. 154322, the ensuing discussion shall concern only Lot No. 707.
The Arguments of the Parties
The petitioners argue that respondent Emilia has no valid basis for her claim of ownership because the Deed
of Quitclaim executed in her favor by Agripina was in fact a deed of donation that contained no acceptance
and thus, void. The petitioners attached a copy of the Deed of Quitclaim and stressed on the following
portions, viz:
I, AGRIPINA ESTIOKO ADVIENTO, of le[ga]l age, Filipino citizen, single and a resident [of] San
Vicenter (sic), Urdaneta City, Pangasinan, for and in consideration of the sum of ONE PESO ([P]1.00),
Philippine Currency and the services rendered by my niece EMILIA FIGURACION, 20 years old, single,
Filipino citizen and a resident of San Vicente, Urdaneta City, Pangasinan, do hereby by these presentsw (sic)
RENOUNCE, RELEASE and forever QUITCLAIM in favor of EMILIA FIGURACION, her heirs, and
assigns the ONE[-]HALF (1/2) eastern portion of the following parcel of land more particularly described
and bounded as follows to wit[.]22
They further aver that the Deed of Quitclaim is riddled with defects that evoke questions of law,
because: (a) it has not been registered with the Register of Deeds, albeit, allegedly executed as early as
1961; (b) a certification dated June 3, 2003 issued by the Office of the Clerk of Court (OCC) of the RTC of
Urdaneta, Pangasinan, shows that it does not have a copy of the Deed of Quitclaim; (c) the Office of the
National Archives which is the depository of old and new notarized documents has no record of the Deed of
Quitclaim as evidenced by a certification dated May 19, 2003;23 and (d) Atty. Felipe V. Abenojar, who
supposedly notarized the Deed of Quitclaim was not commissioned to notarize in 1961 per the certification
dated June 9, 2003 from the OCC of the RTC of Urdaneta, Pangasinan.24
Respondent Emilia, on the other hand, contends that the Deed of Quitclaim should be considered an onerous
donation that requires no acceptance as it is governed by the rules on contracts and not by the formalities for
a simple donation.25
The Court’s Ruling
Issues not raised before the courts a quo cannot be raised for the first time in a petition filed under
Rule 45
Records show that there is a palpable shift in the defense raised by the petitioners before the RTC and the
CA.
In the Pre-Trial Order26 of the RTC dated April 4, 1995, the parties agreed to limit the issue with regard to
Lot No. 707 as follows: whether or not respondent Emilia is the owner of the eastern half portion of Lot No.
707. The petitioners’ supporting theory for this issue was that "the Deed of Quitclaim dated November 28,
1961 was rendered ineffective by the issuance of [TCT No. 42244] in the name of Felipa and Hilaria." 27 On
appeal to the CA, however, the petitioners raised a new theory by questioning the execution and
enforceability of the Deed of Quitclaim. They claimed that it is actually a donation that was not accepted in
the manner required by law.28
The inconsistent postures taken by the petitioners breach the basic procedural tenet that a party cannot
change his theory on appeal as expressly adopted in Rule 44, Section 15 of the Rules of Court, which reads:
Sec. 15. Questions that may be raised on appeal. Whether or not the appellant has filed a motion for new
trial in the court below, he may include in his assignment of errors any question of law or fact that has been
raised in the court below and which is within the issues framed by the parties.
Fortifying the rule, the Court had repeatedly emphasized that defenses not pleaded in the answer may not be
raised for the first time on appeal. When a party deliberately adopts a certain theory and the case is decided
upon that theory in the court below, he will not be permitted to change the same on appeal, because to
permit him to do so would be unfair to the adverse party.29 The Court had likewise, in numerous times,
affirmed that points of law, theories, issues and arguments not brought to the attention of the lower court
need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the
first time at such late stage. Basic considerations of due process underlie this rule. It would be unfair to the
adverse party who would have no opportunity to present further evidence material to the new theory, which
it could have done had it been aware of it at the time of the hearing before the trial court. 30
While a party may change his theory on appeal when the factual bases thereof would not require
presentation of any further evidence by the adverse party in order to enable it to properly meet the issue
raised in the new theory,31this exception does not, however, obtain in the case at hand.
Contrary to the petitioners’ assertion, the Court finds that the issues on the supposed defects and actual
nature of the Deed of Quitclaim are questions of fact that require not only a review or re-evaluation of the
evidence already adduced by the parties but also the reception of new evidence as the petitioners themselves
have acknowledged when they attached in the petition several certifications 32 in support of their new
argument. It is settled that questions of fact are beyond the province of a Rule 45 petition since the Court is
not a trier of facts.33
Accordingly, the Court will not give due course to the new issues raised by the petitioners involving the
nature and execution of the Deed of Quitclaim. For their failure to advance these questions during trial, the
petitioners are now barred by estoppel34 from imploring an examination of the same.
The respondent can compel the
partition of Lot No. 707
The first stage in an action for partition is the settlement of the issue of ownership. Such an action will not
lie if the claimant has no rightful interest in the subject property. In fact, the parties filing the action are
required by the Rules of Court to set forth in their complaint the nature and the extent of their title to the
property. It would be premature to effect a partition until and unless the question of ownership is first
definitely resolved.35
443
Here, the respondent traces her ownership over the eastern half of Lot No. 707 from the Deed of
Quitclaim executed by Agripina, who in turn, was the co-owner thereof being one of the legitimate heirs of
Eulalio. It is well to recall that the petitioners failed to categorically dispute the existence of the Deed of
Quitclaim. Instead, they averred that it has been rendered ineffective by TCT No. 42244 in the name of
Felipa and Hilaria―this contention is, of course, flawed.
Mere issuance of a certificate of title in the name of any person does not foreclose the possibility that the
real property may be under coownership with persons not named in the certificate, or that the registrant may
only be a trustee, or that other parties may have acquired interest over the property subsequent to the
issuance of the certificate of title.36 Stated differently, placing a parcel of land under the mantle of the
Torrens system does not mean that ownership thereof can no longer be disputed. The certificate cannot
always be considered as conclusive evidence of ownership.37 In this case, co-ownership of Lot No. 707
was precisely what respondent Emilia was able to successfully establish, as correctly found by the
RTC and affirmed by the CA.
The status of Agripina and Carolina as the legitimate heirs of Eulalio is an undisputed fact. As such heirs,
they became co-owners of Lot No. 707 upon the death of Eulalio on July 20, 1930. Since Faustina was
predeceased by Eulalio, she likewise became a co-owner of the lot upon Eulalio’s death. Faustina’s share,
however, passed on to her daughter Carolina when the former died on October 18, 1949. The Affidavit of
Self-Adjudication executed by Carolina did not prejudice the share of Agripina because it is not legally
possible for one to adjudicate unto himself an entire property he was not the sole owner of. A co-owner
cannot alienate the shares of her other co-owners – nemo dat qui non habet.38
Hence, Lot No. 707 was a co-owned property of Agripina and Carolina. As co-owners, each of them had full
ownership of her part and of the fruits and benefits pertaining thereto. Each of them also had the right to
alienate the lot but only in so far as the extent of her portion was affected. 39
Thus, when Carolina sold the entire Lot No. 707 on December 11, 1962 to Hilaria and Felipa without the
consent of her co-owner Agripina, the disposition affected only Carolina’s pro indiviso share, and the
vendees, Hilaria and Felipa, acquired only what corresponds to Carolina’s share. A co-owner is entitled to
sell his undivided share; hence, a sale of the entire property by one co-owner without the consent of the
other co-owners is not null and void and only the rights of the co-owner/seller are transferred, thereby
making the buyer a co-owner of the property.40
Accordingly, the deed of sale executed by Carolina in favor of Hilaria and Felipa was a valid conveyance
but only insofar as the share of Carolina in the co-ownership is concerned. As Carolina’s successors-in-
interest to the property, Hilaria and Felipa could not acquire any superior right in the property than what
Carolina is entitled to or could transfer or alienate after partition.
In a contract of sale of co-owned property, what the vendee obtains by virtue of such a sale are the same
rights as the vendor had as co-owner, and the vendee merely steps into the shoes of the vendor as co-
owner.41 Hilaria and Felipa did not acquire the undivided portion pertaining to Agripina, which has already
been effectively bequeathed to respondent Emilia as early as November 28, 1961 thru the Deed of
Quitclaim. In turn, being the successor-in-interest of Agripina’s share in Lot No. 707, respondent Emilia
took the former’s place in the co-ownership and as such co-owner, has the right to compel partition at any
time.42
 The respondent’s right to demand
for partition is not barred by
acquisitive prescription or laches
The petitioners posit that the issuance of TCT No. 42244 in the name of Hilaria and Felipa over Lot No. 707
on December 11, 1962 was an express repudiation of the co-ownership with respondent Emilia. Considering
the period of time that has already lapsed since then, acquisitive prescription has already set in and the
respondent is now barred by laches from seeking a partition of the subject lot.
The contention is specious.
Co-heirs or co-owners cannot acquire by acquisitive prescription the share of the other co-heirs or co-owners
absent a clear repudiation of the co ownership. 43 The act of repudiation, as a mode of terminating co-
ownership, is subject to certain conditions, to wit: (1) a co-owner repudiates the co-ownership; (2) such an
act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and
conclusive; and (4) he has been in possession through open, continuous, exclusive, and notorious possession
of the property for the period required by law.44
The petitioners failed to comply with these conditions. The act of Hilaria and Felipa in effecting the
registration of the entire Lot No. 707 in their names thru TCT No. 42244 did not serve to effectively
repudiate the co-ownership. The respondent built her house on the eastern portion of the lot in 1981 without
any opposition from the petitioners. Hilaria also paid realty taxes on the lot, in behalf of the respondent, for
the years 1983-1987.45 These events indubitably show that Hilaria and Felipa failed to assert exclusive title
in themselves adversely to Emilia. Their acts clearly manifest that they recognized the subsistence of their
co-ownership with respondent Emilia despite the issuance of TCT No. 42244 in 1962. Their acts constitute
an implied recognition of the co-ownership which in turn negates the presence of a clear notice of
repudiation to the respondent. To sustain a plea of prescription, it must always clearly appear that one who
was originally a joint owner has repudiated the claims of his co-owners, and that his co-owners were
apprised or should have been apprised of his claim of adverse and exclusive ownership before the alleged
prescriptive period began to run.46
In addition, when Hilaria and Felipa registered the lot in their names to the exclusion of Emilia, an implied
trust was created by force of law and the two of them were considered a trustee of the respondent’s
undivided share.47 As trustees, they cannot be permitted to repudiate the trust by relying on the registration.
In Ringor v. Ringor,48 the Court had the occasion to explain the reason for this rule:
A trustee who obtains a Torrens title over a property held in trust for him by another cannot
repudiate the trust by relying on the registration. A Torrens Certificate of Title in Jose’s name did not
vest ownership of the land upon him. The Torrens system does not create or vest title. It only confirms and
records title already existing and vested. It does not protect a usurper from the true owner. The Torrens
system was not intended to foment betrayal in the performance of a trust. It does not permit one to enrich
himself at the expense of another. Where one does not have a rightful claim to the property, the Torrens
system of registration can confirm or record nothing. Petitioners cannot rely on the registration of the lands
in Jose’s name nor in the name of the Heirs of Jose M. Ringor, Inc., for the wrong result they seek. For Jose
could not repudiate a trust by relying on a Torrens title he held in trust for his co-heirs.1âwphi1 The
beneficiaries are entitled to enforce the trust, notwithstanding the irrevocability of the Torrens title. The
intended trust must be sustained.49 (Citations omitted and emphasis ours)
444
Further, records do not reflect conclusive evidence showing the manner of occupation and possession
exercised by Hilaria and Felipa over the lot from the time it was registered in their names. The only
evidence of possession extant in the records dates back only to 1985 when Hilaria and Felipa declared the
lot in their names for taxation purposes.50 Prescription can only produce all its effects when acts of
ownership, or in this case, possession, do not evince any doubt as to the ouster of the rights of the other co-
owners. Hence, prescription among co-owners cannot take place when acts of ownership exercised are
vague or uncertain.51
Moreover, the evidence relative to the possession, as a fact upon which the alleged prescription is based,
must be clear, complete and conclusive in order to establish said prescription without any shadow of doubt;
and when upon trial it is not shown that the possession of the claimant has been adverse and exclusive and
opposed to the rights of the others, the case is not one of ownership, and partition will lie. 52 The petitioners
failed to muster adequate evidence of possession essential for the reckoning of the 10-year period for
acquisitive prescription.
The express disavowal of the co-ownership did not happen on December 11, 1962 when TCT No. 42244
was issued but in 1994 when Hilaria attempted to demolish Emilia’s house thus explicitly excluding her
from the co-ownership. It was the only time that Hilaria and Felipa made known their denial of the co-
ownership. On the same year, the respondent instituted the present complaint for partition; hence, the period
required by law for acquisitive period to set in was not met.
Anent laches, the Court finds it unavailing in this case in view of the proximity of the period when the co-
ownership was expressly repudiated and when the herein complaint was filed. Laches is the negligence or
omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert
it has abandoned it or declined to assert it.53 More so, laches is a creation of equity and its application is
controlled by equitable considerations. It cannot be used to defeat justice or perpetrate fraud and injustice.
Neither should its application be used to prevent the rightful owners of a property from recovering what has
been fraudulently registered in the name of another. 54
Partition of Lot No. 707
Under the Old Civil Code55 which was then in force at the time of Eulalio and Marcela’s marriage, Lot No.
707 was their conjugal property.56 When Marcela died, one-half of the lot was automatically reserved to
Eulalio, the surviving spouse, as his share in the conjugal partnership.57 Marcela’s rights to the other half, in
turn, were transmitted to her legitimate child, Agripina and surviving spouse Eulalio.58 Under Article 834 of
the Old Civil Code, Eulalio was entitled only to the usufruct of the lot while the naked ownership belonged
to Agripina. When he remarried, Eulalio’s one half portion of the lot representing his share in the conjugal
partnership and his usufructuary right over the other half were brought into his second marriage with
Faustina.59
When Eulalio died on July 20, 1930, ¼ portion of the lot was reserved for Faustina as her share in the
conjugal partnership.60 The remaining ¼ were transmitted equally to the widow Faustina and Eulalio’s
children, Carolina and Agripina.61 However, Faustina is only entitled to the usufruct of the third available
for betterment.62
The usufructuary of Eulalio over the ½ portion inherited by Agripina earlier was merged with her naked
ownership.63Upon the death of Faustina, the shares in Lot No. 707 which represents her share in the conjugal
partnership and her inheritance from Eulalio were in turn inherited by Carolina64 including Faustina’s
usufructuary rights which were merged with Carolina’s naked ownership. 65

Consequently, Agripina is entitled to 5/8 portion of Lot No. 707 while the remaining 3/8 pertains to
Carolina. Thus, when Carolina sold Lot No. 707 to Hilaria and Felipa, the sale affected only 3/8 portion of
the subject lot. Since the Deed of Quitclaim, bequeathed only the ½ eastern portion of Lot No. 707 in favor
of Emilia instead of Agripina’s entire 5/8 share thereof, the remaining 1/8 portion shall be inherited by
Agripina’s nearest collateral relative,66 who, records show, is her sister Carolina.

In sum, the CA committed no reversible error in holding that the respondent is entitled to have Lot No. 707
partitioned. The CA judgment must, however, be modified to conform to the above-discussed apportionment
of the lot among Carolina, Hilaria, Felipa and Emilia.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 58290
dated December 11, 2001, is AFFIRMED with MODIFICATIONS as follows: (1) 3/8 portion of Lot No.
707 shall pertain in equal shares to Hilaria Figuracion and Felipa Figuracion-Manuel; (2) ½ portion of Lot.
No. 707 shall pertain to Emilia Figuracion-Gerilla; and (3) 1/8 portion of Lot No. 707 shall pertain to the
estate of Carolina (Carlina) Vda. De Figuracion. The case is REMANDED to the Regional Trial Court of
Urdaneta, Pangasinan, Branch 49, who is directed to conduct a PARTITION BY COMMISSIONERS and
effect the actual physical partition of the subject property, as well as the improvements that lie therein, in the
foregoing manner. The trial court is DIRECTED to appoint not more than three (3) competent and
disinterested persons, who should determine the technical metes and bounds of the property and the proper
share appertaining to each co-owner, including the improvements, in accordance with Rule 69 of the Rules
of Court. When it is made to appear to the commissioners that the real estate, or a portion thereof, cannot be
divided without great prejudice to the interest of the parties, the court a quo may order it assigned to one of
the parties willing to take the same, provided he pays to the other parties such sum or sums of money as the
commissioners deem equitable, unless one of the parties interested ask that the property be sold instead of
being so assigned, in which case the court shall order the commissioners to sell the real estate at public sale,
and the commissioners shall sell the same accordingly, and thereafter distribute the proceeds of the sale
appertaining to the just share of each co-owner. No pronouncement as to costs.

SO ORDERED.

445

THIRD DIVISION
G.R. No. 168970 January 15, 2010
CELESTINO BALUS, Petitioner,
vs.
SATURNINO BALUS and LEONARDA BALUS VDA. DE CALUNOD, Respondents.
DECISION
PERALTA, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court is the
Decision1 of the Court of Appeals (CA) dated May 31, 2005 in CA-G.R. CV No. 58041 which set aside the
February 7, 1997 Decision of the Regional Trial Court (RTC) of Lanao del Norte, Branch 4 in Civil Case
No. 3263.
The facts of the case are as follows:
Herein petitioner and respondents are the children of the spouses Rufo and Sebastiana Balus. Sebastiana
died on September 6, 1978, while Rufo died on July 6, 1984.
On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as security for a loan he obtained
from the Rural Bank of Maigo, Lanao del Norte (Bank). The said property was originally covered by
Original Certificate of Title No. P-439(788) and more particularly described as follows:
A parcel of land with all the improvements thereon, containing an area of 3.0740 hectares, more or less,
situated in the Barrio of Lagundang, Bunawan, Iligan City, and bounded as follows: Bounded on the NE.,
along line 1-2, by Lot 5122, Csd-292; along line 2-12, by Dodiongan River; along line 12-13 by Lot 4649,
Csd-292; and along line 12-1, by Lot 4661, Csd-292. x x x 2
Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was subsequently sold to
the Bank as the sole bidder at a public auction held for that purpose. On November 20, 1981, a Certificate of
Sale3 was executed by the sheriff in favor of the Bank. The property was not redeemed within the period
allowed by law. More than two years after the auction, or on January 25, 1984, the sheriff executed a
Definite Deed of Sale4 in the Bank's favor. Thereafter, a new title was issued in the name of the Bank.
On October 10, 1989, herein petitioner and respondents executed an Extrajudicial Settlement of
Estate5adjudicating to each of them a specific one-third portion of the subject property consisting of 10,246
square meters. The Extrajudicial Settlement also contained provisions wherein the parties admitted
knowledge of the fact that their father mortgaged the subject property to the Bank and that they intended to
redeem the same at the soonest possible time.
Three years after the execution of the Extrajudicial Settlement, herein respondents bought the subject
property from the Bank. On October 12, 1992, a Deed of Sale of Registered Land 6 was executed by the
Bank in favor of respondents. Subsequently, Transfer Certificate of Title (TCT) No. T-39,484(a.f.)7 was
issued in the name of respondents. Meanwhile, petitioner continued possession of the subject lot.
On June 27, 1995, respondents filed a Complaint8 for Recovery of Possession and Damages against
petitioner, contending that they had already informed petitioner of the fact that they were the new owners of
the disputed property, but the petitioner still refused to surrender possession of the same to them.
Respondents claimed that they had exhausted all remedies for the amicable settlement of the case, but to no
avail.
On February 7, 1997, the RTC rendered a Decision 9 disposing as follows:
WHEREFORE, judgment is hereby rendered, ordering the plaintiffs to execute a Deed of Sale in favor of
the defendant, the one-third share of the property in question, presently possessed by him, and described in
the deed of partition, as follows:
A one-third portion of Transfer Certificate of Title No. T-39,484 (a.f.), formerly Original Certificate of Title
No. P-788, now in the name of Saturnino Balus and Leonarda B. Vda. de Calunod, situated at Lagundang,
Bunawan, Iligan City, bounded on the North by Lot 5122; East by shares of Saturnino Balus and Leonarda
446
Balus-Calunod; South by Lot 4649, Dodiongan River; West by Lot 4661, consisting of 10,246 square
meters, including improvements thereon.
and dismissing all other claims of the parties.
The amount of ₱6,733.33 consigned by the defendant with the Clerk of Court is hereby ordered delivered to
the plaintiffs, as purchase price of the one-third portion of the land in question.
Plaintiffs are ordered to pay the costs.
SO ORDERED.10
The RTC held that the right of petitioner to purchase from the respondents his share in the disputed property
was recognized by the provisions of the Extrajudicial Settlement of Estate, which the parties had executed
before the respondents bought the subject lot from the Bank.
Aggrieved by the Decision of the RTC, herein respondents filed an appeal with the CA.
On May 31, 2005, the CA promulgated the presently assailed Decision, reversing and setting aside the
Decision of the RTC and ordering petitioner to immediately surrender possession of the subject property to
the respondents. The CA ruled that when petitioner and respondents did not redeem the subject property
within the redemption period and allowed the consolidation of ownership and the issuance of a new title in
the name of the Bank, their co-ownership was extinguished.
Hence, the instant petition raising a sole issue, to wit:
WHETHER OR NOT CO-OWNERSHIP AMONG THE PETITIONER AND THE RESPONDENTS
OVER THE PROPERTY PERSISTED/CONTINUED TO EXIST (EVEN AFTER THE TRANSFER OF
TITLE TO THE BANK) BY VIRTUE OF THE PARTIES' AGREEMENT PRIOR TO THE
REPURCHASE THEREOF BY THE RESPONDENTS; THUS, WARRANTING THE PETITIONER'S
ACT OF ENFORCING THE AGREEMENT BY REIMBURSING THE RESPONDENTS OF HIS
(PETITIONER'S) JUST SHARE OF THE REPURCHASE PRICE.11
The main issue raised by petitioner is whether co-ownership by him and respondents over the subject
property persisted even after the lot was purchased by the Bank and title thereto transferred to its name, and
even after it was eventually bought back by the respondents from the Bank.
Petitioner insists that despite respondents' full knowledge of the fact that the title over the disputed property
was already in the name of the Bank, they still proceeded to execute the subject Extrajudicial Settlement,
having in mind the intention of purchasing back the property together with petitioner and of continuing their
co-ownership thereof.
Petitioner posits that the subject Extrajudicial Settlement is, in and by itself, a contract between him and
respondents, because it contains a provision whereby the parties agreed to continue their co-ownership of
the subject property by "redeeming" or "repurchasing" the same from the Bank. This agreement, petitioner
contends, is the law between the parties and, as such, binds the respondents. As a result, petitioner asserts
that respondents' act of buying the disputed property from the Bank without notifying him inures to his
benefit as to give him the right to claim his rightful portion of the property, comprising 1/3 thereof, by
reimbursing respondents the equivalent 1/3 of the sum they paid to the Bank.
The Court is not persuaded.
Petitioner and respondents are arguing on the wrong premise that, at the time of the execution of the
Extrajudicial Settlement, the subject property formed part of the estate of their deceased father to which they
may lay claim as his heirs.
At the outset, it bears to emphasize that there is no dispute with respect to the fact that the subject property
was exclusively owned by petitioner and respondents' father, Rufo, at the time that it was mortgaged in
1979. This was stipulated by the parties during the hearing conducted by the trial court on October 28,
1996.12 Evidence shows that a Definite Deed of Sale13 was issued in favor of the Bank on January 25, 1984,
after the period of redemption expired. There is neither any dispute that a new title was issued in the Bank's
name before Rufo died on July 6, 1984. Hence, there is no question that the Bank acquired exclusive
ownership of the contested lot during the lifetime of Rufo.
The rights to a person's succession are transmitted from the moment of his death. 14 In addition, the Furthermore, petitioner's contention that he and his siblings intended to continue their supposed co-
inheritance of a person consists of the property and transmissible rights and obligations existing at the time ownership of the subject property contradicts the provisions of the subject Extrajudicial Settlement where
of his death, as well as those which have accrued thereto since the opening of the succession. 15 In the present they clearly manifested their intention of having the subject property divided or partitioned by assigning to
case, since Rufo lost ownership of the subject property during his lifetime, it only follows that at the time of each of the petitioner and respondents a specific 1/3 portion of the same. Partition calls for the segregation
his death, the disputed parcel of land no longer formed part of his estate to which his heirs may lay claim. and conveyance of a determinate portion of the property owned in common. It seeks a severance of the
Stated differently, petitioner and respondents never inherited the subject lot from their father. individual interests of each co-owner, vesting in each of them a sole estate in a specific property and giving
Petitioner and respondents, therefore, were wrong in assuming that they became co-owners of the subject each one a right to enjoy his estate without supervision or interference from the other. 20 In other words, the
lot. Thus, any issue arising from the supposed right of petitioner as co-owner of the contested parcel of land purpose of partition is to put an end to co-ownership,21 an objective which negates petitioner's claims in the
is negated by the fact that, in the eyes of the law, the disputed lot did not pass into the hands of petitioner present case.
and respondents as compulsory heirs of Rufo at any given point in time. WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals, dated May
The foregoing notwithstanding, the Court finds a necessity for a complete determination of the issues raised 31, 2005 in CA-G.R. CV No. 58041, is AFFIRMED.
in the instant case to look into petitioner's argument that the Extrajudicial Settlement is an independent SO ORDERED
contract which gives him the right to enforce his right to claim a portion of the disputed lot bought by
respondents.1avvphi1
It is true that under Article 1315 of the Civil Code of the Philippines, contracts are perfected by mere
consent; and from that moment, the parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all the consequences which, according to their nature, may be in keeping with good
faith, usage and law.
Article 1306 of the same Code also provides that the contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient, provided these are not contrary to law, morals,
good customs, public order or public policy.
In the present case, however, there is nothing in the subject Extrajudicial Settlement to indicate any express
stipulation for petitioner and respondents to continue with their supposed co-ownership of the contested lot.
On the contrary, a plain reading of the provisions of the Extrajudicial Settlement would not, in any way,
support petitioner's contention that it was his and his sibling's intention to buy the subject property from the
Bank and continue what they believed to be co-ownership thereof. It is a cardinal rule in the interpretation of
contracts that the intention of the parties shall be accorded primordial consideration. 16 It is the duty of the
courts to place a practical and realistic construction upon it, giving due consideration to the context in which
it is negotiated and the purpose which it is intended to serve. 17 Such intention is determined from the express
terms of their agreement, as well as their contemporaneous and subsequent acts. 18 Absurd and illogical
interpretations should also be avoided.19
For petitioner to claim that the Extrajudicial Settlement is an agreement between him and his siblings to
continue what they thought was their ownership of the subject property, even after the same had been
bought by the Bank, is stretching the interpretation of the said Extrajudicial Settlement too far.
In the first place, as earlier discussed, there is no co-ownership to talk about and no property to partition, as
the disputed lot never formed part of the estate of their deceased father.
Moreover, petitioner's asseveration of his and respondents' intention of continuing with their supposed co-
ownership is negated by no less than his assertions in the present petition that on several occasions he had
the chance to purchase the subject property back, but he refused to do so. In fact, he claims that after the
Bank acquired the disputed lot, it offered to re-sell the same to him but he ignored such offer. How then can
petitioner now claim that it was also his intention to purchase the subject property from the Bank, when he
admitted that he refused the Bank's offer to re-sell the subject property to him?
In addition, it appears from the recitals in the Extrajudicial Settlement that, at the time of the execution
thereof, the parties were not yet aware that the subject property was already exclusively owned by the Bank.
Nonetheless, the lack of knowledge on the part of petitioner and respondents that the mortgage was already
foreclosed and title to the property was already transferred to the Bank does not give them the right or the
authority to unilaterally declare themselves as co-owners of the disputed property; otherwise, the disposition
of the case would be made to depend on the belief and conviction of the party-litigants and not on the
evidence adduced and the law and jurisprudence applicable thereto.

447
 THIRD DIVISION
G.R. No. 161746 September 1, 2010
EUGENIO FELICIANO, substituted by his wife CEFERINA DE PALMA- FELICIANO, ANGELINA DE
LEON, representing the heirs of ESTEBAN FELICIANO, TRINIDAD VALIENTE, AND BASILIA
TRINIDAD, represented by her son DOMINADOR T. FELICIANO, Petitioners,
vs.
PEDRO CANOZA, DELIA FELICIANO, ROSAURO FELICIANO, ELSA FELICIANO AND
PONCIANO FELICIANO, Respondents.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, seeking to annul and set aside the Decision1 dated June 26, 2003 and Resolution2 dated January
15, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 61888. The CA had reversed the Decision 3 dated
August 3, 1998 of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 11, in Civil Case No. 819-
M-93 and dismissed petitioners’ complaint on the ground of prescription.
The facts are as follows:
When Antonio Feliciano passed away on May 20, 1930, he left behind his only property, a parcel of land
located at Bunga4 Mayor, Bustos, Bulacan. The land had an area of 1,125 square meters and was evidenced
by Tax Declaration No. 14025 in his name. On March 28, 1972, Leona, Maria, Pedro and Salina, all
surnamed Feliciano, declared themselves to be the only surviving heirs of Antonio Feliciano, with the
exception of Salina. They executed an extrajudicial settlement of Antonio Feliciano’s estate 6 and
appropriated among themselves the said parcel of land, to the exclusion of the heirs of Esteban Feliciano and
Doroteo Feliciano, deceased children of Antonio Feliciano. On even date, Leona, Maria, Pedro and Salina
executed a deed of absolute sale or Kasulatan sa Ganap Na Bilihan over the property in favor of the late
Jacinto Feliciano (Pedro’s portion), Felisa Feliciano (Salina’s portion) and Pedro Canoza (Leona and
Maria’s portions).7
During his lifetime, Jacinto Feliciano applied for a free patent over the portion of land he bought, declaring
that the same was a public land, first occupied and cultivated by Pedro Feliciano.8 Jacinto was issued Free
Patent No. (IV-4) 012293 on November 28, 19779 and the same was forwarded to the Register of Deeds of
Malolos, Bulacan, but unfortunately, it was burned on March 7, 1987. Pedro Canoza, for his part, also
applied for a free patent over the portion of land which he bought, claiming that the same was public land,
first occupied and cultivated by Leona and Maria Feliciano.10 He was issued Free Patent No. (IV-4) 012292,
now covered by Original Certificate of Title (OCT) No. P-364,11 on February 23, 1979.
On October 18, 1993, Eugenio Feliciano and Angelina Feliciano-de Leon, surviving heirs of the late Esteban
Feliciano, and Trinidad Feliciano-Valiente and Basilia Feliciano-Trinidad, surviving children of the late
Doroteo Feliciano, filed a complaint12 against Salina Feliciano, Felisa Feliciano, Pedro Canoza and the heirs
of the late Jacinto Feliciano, namely Delia, Rosauro, Elsa, Nardo and Ponciano, all surnamed Feliciano, for
the Declaration of Nullity of Documents and Title, Recovery of Real Property and Damages. They alleged
that the settlement of the estate and sale were done without their participation and consent as heirs of
Esteban and Doroteo. Likewise, they averred that the ancestral home of the Felicianos is erected on the
subject property and that they have occupied the same since birth. Canoza and Jacinto falsely declared that
the property was not occupied, so their titles to the property should be declared null and void on the ground
that they have made false statements in their respective applications for free patent.
On November 4, 1993, before an Answer could be filed, the petitioners amended their complaint to include
the allegation that they sought to recover the shares of their fathers, Esteban and Doroteo, which they could
have acquired as heirs of Antonio Feliciano.13
In their Answer,14 respondent Pedro Canoza and his spouse, respondent Delia Feliciano, alleged that they
were buyers in good faith and for value. They likewise contended that assuming that there was preterition of
legal heirs, they never took part in it. As affirmative defenses, they alleged that the complaint failed to state
448
a cause of action; the lower court had no jurisdiction as the subject of the case were free patents and
therefore prior exhaustion of administrative remedies was required; the case was prematurely filed; no effort
was exerted towards a settlement; plaintiffs’ right has prescribed; Eugenio Feliciano was a mere squatter
who should be ordered to vacate; the deed of sale was validly, genuinely and duly executed; Eugenio and
Angelina were guilty of misleading the court because there were other heirs who were indispensable parties
but who were not included; and Presidential Decree No. 1508 or the Revised Katarungang Pambarangay
Law was not resorted to by plaintiffs.
Respondents Rosauro Feliciano, Elsa Feliciano and Ponciano Feliciano likewise filed an
Answer15 containing the same allegations and defenses as respondents Pedro Canoza and Delia Feliciano.
The other defendants, Salina Feliciano, Felisa Feliciano and Nardo Feliciano were declared in default.
On August 3, 1998, the trial court rendered a Decision, the dispositive portion of which reads as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, as follows:
1. Declaring the extra-judicial settlement of estate of Antonio Feliciano null and void;
2. Declaring the sale of the property in question to Pedro Canoza, Felisa Feliciano and Jacinto
Feliciano null and void;
3. Declaring the original certificate of Title No. 364 in the name of Pedro Canoza and the
certificates of titles in the name of defendants over Lot 1874-Cad-344, Bustos Cadastre (Tax
Declaration No. 1402) as null and void;
4. Ordering defendants to reconvey ownership and possession of said property to plaintiffs subject
to a just and equitable partition thereof by and between all interested parties.
No pronouncement as to cost.
SO ORDERED.16
The trial court explained that by operation of law, the plaintiffs (herein petitioners) have as much right as
Leona, Maria, Pedro and Salina Feliciano to inherit the property in question, and they cannot be deprived of
their right unless by disinheritance for causes set forth in the law. When Leona Feliciano, Pedro Feliciano,
Maria Feliciano and Salina Feliciano appropriated the disputed lot solely to themselves through the
extrajudicial settlement of estate, they committed a fraudulent act. To the extent that Doroteo and Esteban
were deprived of their rightful share, the said out-of-court settlement was annullable, said the trial court. The
trial court also declared that Pedro Canoza was not a buyer in good faith of Leona and Maria’s shares.
Records show that Pedro Canoza’s live-in partner, Delia Feliciano, was a relative of the petitioners and the
other defendants; thus, he could be reasonably charged with the knowledge of petitioners’ status vis-à-vis
the subject property. The acquisition by Canoza and Jacinto Feliciano of free patent titles over portions of
the contested lot also did not legitimize their ownership thereof, as they acquired no greater rights over the
property than their predecessors-in-interest, having merely stepped into their shoes.17
Aggrieved, respondents appealed to the CA with the following assignment of errors:
I. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN ADMITTING IN EVIDENCE THE
EXTRA-JUDICIAL SETTLEMENT OF ESTATE OF ANTONIO FELICIANO (EXHIBIT "B")[;]
II. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING AS NULL AND
VOID THE EXTRA-JUDICIAL SETTLEMENT OF ESTATE OF ANTONIO FELICIANO (EXHIBIT
"B")[;]
III. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING AS NULL AND
VOID THE DEED OF SALE (EXHIBIT "C") IN FAVOR OF JACINTO FELICIANO, FELISA
FELICIANO AND PEDRO CANOZA[;]
IV. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING O.C.T. NO. 364 IN
THE NAME OF PEDRO CANOZA AND CERTIFICATES OF TITLE OF DEFENDANTS AS NULL
AND VOID[; AND]
V. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN ORDERING DEFENDANTS TO
RECONVEY OWNERSHIP AND POSSESSION OF THE SUBJECT PROPERTY TO PLAINTIFFS
SUBJECT TO A JUST AND EQUITABLE PARTITION THEREOF BY AND BETWEEN ALL
INTERESTED PARTIES.18
On June 26, 2003, the appellate court rendered the assailed Decision reversing the trial court’s decision. The
CA held,
WHEREFORE, premises considered, the appeal is hereby GRANTED. Accordingly, the Decision dated
August 3, 1998 of the Regional Trial Court, Branch 11 (XI), Malolos, Bulacan in Civil Case No. 819-M-93
is hereby REVERSED AND SET ASIDE and plaintiffs-appellees’ complaint is ordered DISMISSED for
being time-barred.
SO ORDERED.19
The CA ruled that prescription had set in, citing the case of Pedrosa v. Court of Appeals,20 which held that
the applicable prescriptive period to annul a deed of extrajudicial settlement is four (4) years from the
discovery of the fraud. It reasoned that when petitioners filed the instant complaint for the annulment of the
extrajudicial settlement of Antonio Feliciano’s estate, more than four (4) years had elapsed from the
issuance of the free patents. As regards the portion claimed by the late Jacinto Feliciano, sixteen (16) years
had elapsed from the time the free patent was issued to him before petitioners filed the complaint, while in
the case of Canoza, fourteen (14) years had elapsed from the issuance of the free patent in Canoza’s favor.
Hence, according to the CA, the action for the annulment of the documents had prescribed.
Petitioners filed a motion for reconsideration of the aforesaid Decision but it was denied by the CA in the
Resolution dated January 15, 2004 for lack of merit.
Hence, this petition.
The grounds relied upon by the petitioners are the following:
A. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN GRANTING THE
APPEAL BY ORDERING THE DISMISSAL OF THE COMPLAINT ON GROUND OF
PRESCRIPTION OF ACTION, DESPITE THE FACT THAT THE ISSUE OF PRESCRIPTION
OF ACTION HAS NOT BEEN RAISED ON APPEAL AS AN ISSUE, NOR ASSIGNED AS AN
ERROR, NOR DEFINED IN THE PRE-TRIAL ORDER AS AMONG THE ISSUES TO BE
RESOLVED;
B. ASSUMING THAT PRESCRIPTION OF ACTION MAY BE TAKEN AS A GROUND FOR
DISMISSING THE COMPLAINT EVEN IF NOT RAISED ON APPEAL, NOR ASSIGNED AS
AMONG THE ERRORS COMMITTED, THE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN HOLDING THAT THE ACTION PRESCRIBES IN FOUR YEARS,
OR IN NOT HOLDING THAT THE ACTION IS IMPRESCRIPTIBLE;
C. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT AFFIRMING
THE DECISION OF THE TRIAL COURT.21
Essentially, the issue for our resolution is whether the CA erred in reversing the trial court’s decision.
Petitioners allege that the CA gravely erred in granting the appeal and in dismissing the complaint on the
ground of prescription of action because that issue was never raised on appeal, nor defined as one (1) of the
issues outlined and limited in the pre-trial order.
We do not agree.
While respondents have not assigned the defense of prescription in their appeal before the CA, they raised
such defense in their December 1, 1993 Answer as one (1) of their affirmative defenses.22 In their brief
before the CA, respondents specifically prayed for the reliefs mentioned in their respective answers before
the trial court. Thus, by reference, they are deemed to have adopted the defense of prescription, and could
not properly be said to have waived the defense of prescription.
Moreover, Rule 9, Section 1 of the 1997 Rules of Civil Procedure, as amended, provides that when it
appears from the pleadings or the evidence on record that the action is already barred by the statute of
limitations, the court shall dismiss the claim. Thus, in Gicano v. Gegato,23 we held:
We have ruled that trial courts have authority and discretion to dismiss an action on the ground of
prescription when the parties’ pleadings or other facts on record show it to be indeed time-barred x x x; and
449
it may do so on the basis of a motion to dismiss, or an answer which sets up such ground as an affirmative
defense; or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration; or
even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings, or
where a defendant has been declared in default. What is essential only, to repeat, is that the facts
demonstrating the lapse of the prescriptive period, be otherwise sufficiently and satisfactorily apparent on
the record: either in the averments of the plaintiffs complaint, or otherwise established by the
evidence. (Underscoring supplied.)
But did the CA nonetheless commit error when it held that the applicable prescriptive period is four (4)
years?
Petitioners argue that the CA erroneously treated the action they filed at the trial court as one (1) for
annulment of the extrajudicial settlement and applied the four (4)-year prescriptive period in dismissing the
same. They contend that the action they filed was one (1) for Declaration of Nullity of Documents and
Titles, Recovery of Real Property and Damages, and as such, their action was imprescriptible pursuant to
Article 141024 of the Civil Code.
Respondents, for their part, maintain that the CA did not err in holding that the deed of extrajudicial
partition executed without including some of the heirs, who had no knowledge of the partition and did not
consent thereto, is merely fraudulent and not void. They stress that the action to rescind the partition based
on fraud prescribes in four (4) years counted from the date of registration, which is constructive notice to the
whole world.
We affirm the ruling of the CA. As the records show, the heirs of Doroteo and Esteban did not participate in
the extrajudicial partition executed by Salina with the other compulsory heirs, Leona, Maria and Pedro.
Undeniably, the said deed was fraudulently obtained as it deprived the known heirs of Doroteo and Esteban
of their shares in the estate. A deed of extrajudicial partition executed without including some of the heirs,
who had no knowledge of and consent to the same, is fraudulent and vicious.25 Hence, an action to set it
aside on the ground of fraud could be instituted. Such action for the annulment of the said partition,
however, must be brought within four (4) years from the discovery of the fraud.1avvphi1
In Gerona v. De Guzman,26 respondents therein executed a deed of extrajudicial settlement declaring
themselves to be the sole heirs of the late Marcelo de Guzman. They secured new transfer certificates of title
in their own names, thereby excluding the petitioners therein from the estate of the deceased. The petitioners
brought an action for the annulment of the said deed upon the ground that the same is tainted with fraud. The
Court held,
Inasmuch as petitioners seek to annul the aforementioned deed of "extra-judicial settlement" upon the
ground of fraud in the execution thereof, the action therefor may be filed within four (4) years from the
discovery of the fraud (Mauricio v. Villanueva, L-11072, September 24, 1959). Such discovery is deemed to
have taken place, in the case at bar, on June 25, 1948, when said instrument was filed with the Register of
Deeds and new certificates of title were issued in the name of respondents exclusively, for the registration of
the deed of extra-judicial settlement constitute constructive notice to the whole world.27 (Emphasis and
underscoring supplied.)
Evidently, the applicable prescriptive period to institute the action to annul the deed of extrajudicial
settlement was four (4) years counted from the discovery of fraud as held in the case of Gerona v. De
Guzman.28 However, the records show that petitioners’ complaint was filed only on October 18, 1993, or
almost sixteen (16) years after Jacinto Feliciano was issued Free Patent No. (IV-4) 012293 on November 28,
1977, and almost fourteen (14) years from the time Pedro Canoza was issued OCT No. P-364 on November
28, 1979. As petitioners are deemed to have obtained constructive notice of the fraud upon the registration
of the Free Patent, they clearly failed to institute the present civil action within the allowable period. The
same result obtains even if their complaint is treated as one (1) essentially for reconveyance as more than ten
(10) years have passed since petitioners’ cause of action accrued. The CA committed no error in dismissing
their complaint.
WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated June 26, 2003 and
Resolution dated January 15, 2004, of the Court of Appeals in CA-G.R. CV No. 61888 are AFFIRMED.
With costs against petitioners.
SO ORDERED.

450
 SECOND DIVISION
G.R. No. 183852 October 20, 2010
CARMELA BROBIO MANGAHAS, Petitioner,
vs.
EUFROCINA A. BROBIO, Respondent.
RESOLUTION
NACHURA, J.:
This petition for review on certiorari seeks to set aside the Court of Appeals (CA) Decision 1 dated February
21, 2008, which dismissed petitioner’s action to enforce payment of a promissory note issued by respondent,
and Resolution2 dated July 9, 2008, which denied petitioner’s motion for reconsideration.
The case arose from the following facts:
On January 10, 2002, Pacifico S. Brobio (Pacifico) died intestate, leaving three parcels of land. He was
survived by his wife, respondent Eufrocina A. Brobio, and four legitimate and three illegitimate children;
petitioner Carmela Brobio Mangahas is one of the illegitimate children.
On May 12, 2002, the heirs of the deceased executed a Deed of Extrajudicial Settlement of Estate of the
Late Pacifico Brobio with Waiver. In the Deed, petitioner and Pacifico’s other children, in consideration of
their love and affection for respondent and the sum of ₱150,000.00, waived and ceded their respective
shares over the three parcels of land in favor of respondent. According to petitioner, respondent promised to
give her an additional amount for her share in her father’s estate. Thus, after the signing of the Deed,
petitioner demanded from respondent the promised additional amount, but respondent refused to pay,
claiming that she had no more money.3
A year later, while processing her tax obligations with the Bureau of Internal Revenue (BIR), respondent
was required to submit an original copy of the Deed. Left with no more original copy of the Deed,
respondent summoned petitioner to her office on May 31, 2003 and asked her to countersign a copy of the
Deed. Petitioner refused to countersign the document, demanding that respondent first give her the
additional amount that she promised. Considering the value of the three parcels of land (which she claimed
to be worth ₱20M), petitioner asked for ₱1M, but respondent begged her to lower the amount. Petitioner
agreed to lower it to ₱600,000.00. Because respondent did not have the money at that time and petitioner
refused to countersign the Deed without any assurance that the amount would be paid, respondent executed
a promissory note. Petitioner agreed to sign the Deed when respondent signed the promissory note which
read —
31 May 2003
This is to promise that I will give a Financial Assistance to CARMELA B. MANGAHAS the amount
of ₱600,000.00 Six Hundred Thousand only on June 15, 2003.
(SGD)
EUFROCINA A. BROBIO4
When the promissory note fell due, respondent failed and refused to pay despite demand. Petitioner made
several more demands upon respondent but the latter kept on insisting that she had no money.
On January 28, 2004, petitioner filed a Complaint for Specific Performance with Damages 5 against
respondent, alleging in part—
2. That plaintiff and defendant are legal heirs of the deceased, Pacifico S. Brobio[,] who died
intestate and leaving without a will, on January 10, 2002, but leaving several real and personal
properties (bank deposits), and some of which were the subject of the extra-judicial settlement
among them, compulsory heirs of the deceased, Pacifico Brobio. x x x.
3. That in consideration of the said waiver of the plaintiff over the listed properties in the extra-
judicial settlement, plaintiff received the sum of ₱150,000.00, and the defendant executed a
"Promissory Note" on June 15, 2003, further committing herself to give plaintiff a financial
assistance in the amount of ₱600,000.00. x x x.
451
4. That on its due date, June 15, 2003, defendant failed to make good of her promise of delivering
to the plaintiff the sum of ₱600,000.00 pursuant to her "Promissory Note" dated May 31, 2003, and
despite repeated demands, defendant had maliciously and capriciously refused to deliver to the
plaintiff the amount [of] ₱600,000.00, and the last of which demands was on October 29, 2003. x x
x.6
In her Answer with Compulsory Counterclaim, 7 respondent admitted that she signed the promissory note but
claimed that she was forced to do so. She also claimed that the undertaking was not supported by any
consideration. More specifically, she contended that —
10. Defendant was practically held "hostage" by the demand of the plaintiff. At that time,
defendant was so much pressured and was in [a] hurry to submit the documents to the Bureau of
Internal Revenue because of the deadline set and for fear of possible penalty if not complied with.
Defendant pleaded understanding but plaintiff was adamant. Her hand could only move in
exchange for 1 million pesos.
11. Defendant, out of pressure and confused disposition, was constrained to make a promissory
note in a reduced amount in favor of the plaintiff. The circumstances in the execution of the
promissory note were obviously attended by involuntariness and the same was issued without
consideration at all or for illegal consideration.8
On May 15, 2006, the Regional Trial Court (RTC) rendered a decision in favor of petitioner. The RTC
found that the alleged "pressure and confused disposition" experienced by respondent and the circumstances
that led to the execution of the promissory note do not constitute undue influence as would vitiate
respondent’s consent thereto. On the contrary, the RTC observed that —
It is clear from all the foregoing that it is the defendant who took improper advantage of the plaintiff’s trust
and confidence in her by resorting to a worthless written promise, which she was intent on reneging. On the
other hand, plaintiff did not perform an unlawful conduct when she insisted on a written commitment from
the defendant, as embodied in the promissory note in question, before affixing her signature that was asked
of her by the defendant because, as already mentioned, that was the only opportunity available to her or
which suddenly and unexpectedly presented itself to her in order to press her demand upon the defendant to
satisfy the correct amount of consideration due to her. In other words, as the defendant had repeatedly
rebuffed her plea for additional consideration by claiming lack of money, it is only natural for the plaintiff to
seize the unexpected opportunity that suddenly presented itself in order to compel the defendant to give to
her [what is] due [her]. And by executing the promissory note which the defendant had no intention of
honoring, as testified to by her, the defendant clearly acted in bad faith and took advantage of the trust and
confidence that plaintiff had reposed in her.9
The RTC also brushed aside respondent’s claim that the promissory note was not supported by valuable
consideration. The court maintained that the promissory note was an additional consideration for the waiver
of petitioner’s share in the three properties in favor of respondent. Its conclusion was bolstered by the fact
that the promissory note was executed after negotiation and haggling between the parties. The dispositive
portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered as follows:
1. Ordering the defendant to pay to plaintiff the sum of Six Hundred Thousand Pesos
(₱600,000.00) which she committed to pay to plaintiff under the promissory note in question, plus
interest thereon at the rate of 12% per annum computed from the date of the filing of the
complaint;
2. Ordering the defendant to pay to plaintiff the sum of ₱50,000.00 as attorney’s fees; and
3. Ordering the defendant to pay to plaintiff the costs of this suit.
SO ORDERED.10
On February 21, 2008, the CA reversed the RTC decision and dismissed the complaint. 11 The CA found that
there was a complete absence of consideration in the execution of the promissory note, which made it
inexistent and without any legal force and effect. The court noted that "financial assistance" was not the real
reason why respondent executed the promissory note, but only to secure petitioner’s signature. The CA held
that the waiver of petitioner’s share in the three properties, as expressed in the deed of extrajudicial
settlement, may not be considered as the consideration of the promissory note, considering that petitioner
signed the Deed way back in 2002 and she had already received the consideration of ₱150,000.00 for
signing the same. The CA went on to hold that if petitioner disagreed with the amount she received, then she
should have filed an action for partition.
Further, the CA found that intimidation attended the signing of the promissory note. Respondent needed the
Deed countersigned by petitioner in order to comply with a BIR requirement; and, with petitioner’s refusal
to sign the said document, respondent was forced to sign the promissory note to assure petitioner that the
money promised to her would be paid.
Petitioner moved for the reconsideration of the CA Decision. In a Resolution dated July 9, 2008, the CA
denied petitioner’s motion.12
In this petition for review, petitioner raises the following issues:
1. The Honorable Court of Appeals erred in the appreciation of the facts of this case when it found
that intimidation attended the execution of the promissory note subject of this case.
2. The Honorable Court of Appeals erred when it found that the promissory note was without
consideration.
3. The Honorable Court of Appeals erred when it stated that petitioner should have filed [an
action] for partition instead of a case for specific performance.13
The petition is meritorious.
Contracts are voidable where consent thereto is given through mistake, violence, intimidation, undue
influence, or fraud. In determining whether consent is vitiated by any of these circumstances, courts are
given a wide latitude in weighing the facts or circumstances in a given case and in deciding in favor of what
they believe actually occurred, considering the age, physical infirmity, intelligence, relationship, and
conduct of the parties at the time of the execution of the contract and subsequent thereto, irrespective of
whether the contract is in a public or private writing.14
Nowhere is it alleged that mistake, violence, fraud, or intimidation attended the execution of the promissory
note. Still, respondent insists that she was "forced" into signing the promissory note because petitioner
would not sign the document required by the BIR. In one case, the Court – in characterizing a similar
argument by respondents therein – held that such allegation is tantamount to saying that the other party
exerted undue influence upon them. However, the Court said that the fact that respondents were "forced" to
sign the documents does not amount to vitiated consent. 15
There is undue influence when a person takes improper advantage of his power over the will of another,
depriving the latter of a reasonable freedom of choice.16 For undue influence to be present, the influence
exerted must have so overpowered or subjugated the mind of a contracting party as to destroy his free
agency, making him express the will of another rather than his own. 17
Respondent may have desperately needed petitioner’s signature on the Deed, but there is no showing that
she was deprived of free agency when she signed the promissory note. Being forced into a situation does not
amount to vitiated consent where it is not shown that the party is deprived of free will and choice.
Respondent still had a choice: she could have refused to execute the promissory note and resorted to judicial
means to obtain petitioner’s signature. Instead, respondent chose to execute the promissory note to obtain
petitioner’s signature, thereby agreeing to pay the amount demanded by petitioner.
The fact that respondent may have felt compelled, under the circumstances, to execute the promissory note
will not negate the voluntariness of the act. As rightly observed by the trial court, the execution of the
promissory note in the amount of ₱600,000.00 was, in fact, the product of a negotiation between the parties.
Respondent herself testified that she bargained with petitioner to lower the amount:
ATTY. VILLEGAS:
Q And is it not that there was even a bargaining from ₱1-M to ₱600,000.00 before you prepare[d]
and [sign[ed] that promissory note marked as Exhibit "C"?
452
A Yes, sir.
Q And in fact, you were the one [who] personally wrote the amount of ₱600,000.00 only as
indicated in the said promissory note?
A Yes, sir.
COURT:
Q So, just to clarify. Carmela was asking an additional amount of ₱1-M for her to sign this
document but you negotiated with her and asked that it be lowered to ₱600,000.00 to which she
agreed, is that correct?
A Yes, Your Honor. Napilitan na po ako.
Q But you negotiated and asked for its reduction from ₱1-M to ₱600,000.00?
A Yes, Your Honor.18
Contrary to the CA’s findings, the situation did not amount to intimidation that vitiated
consent.1awphil There is intimidation when one of the contracting parties is compelled to give his consent
by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon
the person or property of his spouse, descendants, or ascendants. 19 Certainly, the payment of penalties for
delayed payment of taxes would not qualify as a "reasonable and well-grounded fear of an imminent and
grave evil."
We join the RTC in holding that courts will not set aside contracts merely because solicitation, importunity,
argument, persuasion, or appeal to affection was used to obtain the consent of the other party. Influence
obtained by persuasion or argument or by appeal to affection is not prohibited either in law or morals and is
not obnoxious even in courts of equity.20
On the issue that the promissory note is void for not being supported by a consideration, we likewise
disagree with the CA.
A contract is presumed to be supported by cause or consideration. 21 The presumption that a contract has
sufficient consideration cannot be overthrown by a mere assertion that it has no consideration. To overcome
the presumption, the alleged lack of consideration must be shown by preponderance of evidence. 22 The
burden to prove lack of consideration rests upon whoever alleges it, which, in the present case, is
respondent.
Respondent failed to prove that the promissory note was not supported by any consideration. From her
testimony and her assertions in the pleadings, it is clear that the promissory note was issued for a cause or
consideration, which, at the very least, was petitioner’s signature on the document.1avvphi1
It may very well be argued that if such was the consideration, it was inadequate. Nonetheless, even if the
consideration is inadequate, the contract would not be invalidated, unless there has been fraud, mistake, or
undue influence.23 As previously stated, none of these grounds had been proven present in this case.
The foregoing discussion renders the final issue insignificant. Be that as it may, we would like to state that
the remedy suggested by the CA is not the proper one under the circumstances. An action for partition
implies that the property is still owned in common. 24 Considering that the heirs had already executed a deed
of extrajudicial settlement and waived their shares in favor of respondent, the properties are no longer under
a state of co-ownership; there is nothing more to be partitioned, as ownership had already been merged in
one person.
WHEREFORE, premises considered, the CA Decision dated February 21, 2008 and its Resolution dated
July 9, 2008 are REVERSED and SET ASIDE. The RTC decision dated May 15, 2006 is REINSTATED.
SO ORDERED.
 FIRST DIVISION
March 12, 2014
G.R. No. 187944
VARMENCITA SUAREZ, Petitioner,
vs.
MR. and MRS. FELIX E. EMBOY, JR. and MARILOU P. EMBOY-DELANTAR, Respondents.
DECISION
REYES, J.:
For review in the instant Petition1 is the Decision2 rendered on March 19, 2009 and Resolution3 issued on
May 5, 2009 by the Court of Appeals (CA) in CA-G.R. SP No. 03489. The CA granted the Petition for
Review4 filed by Mr. and Mrs. Felix Emboy, Jr. (Felix) and Marilou Emboy-Delantar (Marilou)
(respondents), seeking to reverse the decisions of the Regional Trial Court (RTC), Branch 12, 5 and
Municipal Trial Court in Cities (MTCC), Branch 3,6 of Cebu City, rendered on February 26, 2008 in Civil
Case No. CEB-33328,7 and on September 25, 2006 in Civil Case No. R-49832, respectively. The RTC
affirmed the MTCC in upholding the claims of Carmencita Suarez (Carmencita) in her complaint for
unlawful detainer instituted against the respondents.
Antecedents
At the center of the dispute is a 222-square meter parcel of land, designated as Lot No. 1907-A-2 (subject
lot) of the subdivision plan Psd-165686, situated in Barangay Duljo, Cebu City, and covered by Transfer
Certificate of Title (TCT) No. T-174880 issued in the name of Carmencita on February 9, 2005. The subject
lot used to be a part of Lot No. 1907-A,8 which was partitioned in the following manner among the heirs of
Spouses Carlos Padilla (Carlos) and Asuncion Pacres (Asuncion): 9
Lot No. TCT No. Heirs
1907-A-1 T-543459 Spouses Rogelio and Praxedes Padilla
1907-A-2 T-543460 Heirs of Vicente Padilla (Vicente), namely: (1) Azucena Padilla, married to
Felly Carrera; (2) Remedios Padilla (Remedios), married to Oscar Dimay;
(3) Veronica Padilla (Veronica);10 and (4) Moreno Padilla (Moreno),
married to Teresita Curso (Teresita)
1907-A-3 T-543461 Cresencio Padilla
1907-A-4 T-543462 Fructousa Baricuatro
1907-A-5 T-543463 Claudia Padilla-Emboy (Claudia)
A house, which is occupied by respondents Felix and Marilou, stands in the subject lot. The respondents
claim that their mother, Claudia, had occupied the subject lot during her lifetime and it was earmarked to
become her share in Lot No. 1907-A. They had thereafter stayed in the subject lot for decades after
inheriting the same from Claudia, who had in turn succeeded her own parents, Carlos and Asuncion. 11
In 2004, respondents Felix and Marilou were asked by their cousins, who are the Heirs of Vicente, to vacate
the subject lot and to transfer to Lot No. 1907-A-5, a landlocked portion sans a right of way. They refused to
comply insisting that Claudia’s inheritance pertained to Lot No. 1907-A-2.12
Not long after, the respondents received from Carmencita’s counsel, Atty. Jufelenito R. Pareja (Atty.
Pareja), a demand letter, dated February 23, 2004, requiring them to vacate the subject lot. They were
informed that Carmencita had already purchased on February 12, 2004 the subject lot from the former’s
relatives. However, the respondents did not heed the demand. Instead, they examined the records pertaining
to the subject lot and uncovered possible anomalies, i.e., forged signatures and alterations, in the execution
of a series of deeds of partition relative to Lot No. 1907-A. On August 13, 2004, they filed before the RTC
453
of Cebu City a complaint13 for nullification of the partition and for the issuance of new TCTs covering the
heirs’ respective portions of Lot No. 1907-A.14
On December 8, 2004, Carmencita filed before the MTCC and against the respondents a complaint for
unlawful detainer, the origin of the instant petition.1âwphi1 She alleged that she bought the subject lot from
Remedios, Moreno, Veronica and Dionesia,15 the registered owners thereof and the persons who allowed the
respondents to occupy the same by mere tolerance. As their successor-in-interest, she claimed her
entitlement to possession of the subject lot and the right to demand from the respondents to vacate the
same.16
The MTCC upheld Carmencita’s claims in its decision rendered on September 25, 2006. The respondents
were ordered to vacate the subject lot and remove at their expense all the improvements they had built
thereon. They were likewise made solidarily liable to pay Carmencita Php 20,000.00 as attorney’s fees. 17
In the Decision dated February 26, 2008, the RTC affirmed in its entirety the MTCC ruling. 18
The respondents challenged the MTCC and RTC judgments through a Petition for Review19 filed before the
CA.
The respondents argued that they have been occupying the subject lot in the concept of owners for several
decades. Carmencita, on the other hand, was a buyer in bad faith for having purchased the property despite
the notice of lis pendens clearly annotated on the subject lot’s title. Even her complaint for unlawful detainer
was filed on December 8, 2004 subsequent to the respondents’ institution on August 13, 2004 of a petition
for nullification of the partition. Citing Sarmiento v. CA,20 the respondents emphasized that "even if one is
the owner of the property, the possession thereof cannot be wrested from another who had been in the
physical or material possession of the same for more than one year by resorting to a summary action of
ejectment."21 The respondents also invoked the doctrine enunciated in Amagan v. Marayag 22 that the
pendency of another action anchored on the issue of ownership justifies the suspension of an ejectment suit
involving the same real property. The foregoing is especially true in the case at bar where the issue of
possession is so interwoven with that of ownership. Besides, the resolution of the question of ownership
would necessarily result in the disposition of the issue of possession.
The respondents also stressed that the deed of sale dated April 1, 2004, which was attached to the complaint
for unlawful detainer, bore tell-tale signs of being spurious. First, Atty. Pareja’s demand letter sent to the
respondents instead referred to a deed of sale dated February 12, 2004. Secondly, Teresita, who now lives in
Luzon and has been estranged from Moreno since the 1980s, was a signatory in the deed of sale. Thirdly, a
certain Veronida Padilla, a fictitious person, also signed the deed of sale as among the vendors, but she, too,
was impleaded as a co-defendant in the ejectment suit. Fourthly, the deed was only registered the following
year after its supposed execution.
The respondents insisted that the Heirs of Vicente, who had allegedly sold the subject lot to Carmencita, had
never physically occupied the same. Hence, there was no basis at all for Carmencita’s claim that the
respondents’ possession of the subject lot was by mere tolerance of the alleged owners.
The respondents also presented before the CA a newly discovered evidence, which they found in an old
wooden chest in their ancestral home. A duly notarized document captioned as an "Agreement," 23 dated
February 23, 1957, showed that Vicente and his spouse, Dionesia, had waived their hereditary rights to Lot
No. 1907-A. The document stated that Vicente obtained a loan from the Philippine National Bank using Lot
No. 1907-A as a collateral. The loan was paid by Carlos and Asuncion and the waiver must have been
executed in order to be fair to Vicente’s siblings. Prescinding from the above, the Heirs of Vicente no longer
had ownership rights over the subject lot to convey to Carmencita.
The respondents also averred that Carmencita’s complaint lacked a cause of action. The certification to file
an action was issued by the officials of Barangay Duljo in the name of James Tan Suarez, Carmencita’s
brother, who had no real rights or interests over the subject lot. Further, while Carmencita based her claim
over the subject lot by virtue of a deed of sale executed on April 1, 2004, no demand to vacate was made
upon the respondents after that date. The absence of such demand rendered the complaint fatally defective,
as the date of its service should be the reckoning point of the one-year period within which the suit can be
filed.
In support of the respondents’ prayer for the issuance of injunctive reliefs, they argued that their loss would
be irreparable. Moreover, the resolution of the respondents’ petition for nullification of the partition of Lot
No. 1907-A, in which Carmencita was likewise impleaded as a defendant, would be rendered useless in the
event that the latter’s complaint for unlawful detainer would be granted and the former’s ancestral house
demolished.
The Ruling of the CA
On March 19, 2009, the CA rendered the herein assailed Decision reversing the disquisitions of the courts a
quo and dismissing Carmencita’s complaint for unlawful detainer. The CA explained:
Section 1, Rule 70 of the Rules of Court provides:
Section 1. Who may institute proceedings, and when.—Subject to the provisions of the next succeeding
section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy,
or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building
is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any
contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or
other person, may, at any time within one (1) year after such unlawful deprivation or withholding of
possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, or any person or persons claiming under them, for the restitution of
such possession, together with damages and costs.
The distinction between forcible entry and unlawful detainer was lucidly explained in Sarmiento vs. Court
of Appeals,:
Forcible entry and unlawful detainer cases are two distinct actions defined in Section 1, Rule 70 of the Rules
of Court. [In] forcible entry, one is deprived of physical possession of land or building by means of force,
intimidation, threat, strategy, or stealth. In unlawful detainer, one unlawfully withholds possession thereof
after the expiration or termination of his right to hold possession under any contract, express or implied. In
forcible entry, the possession is illegal from the beginning and the basic inquiry centers on who has the prior
possession de facto. In unlawful detainer, the possession was originally lawful but became unlawful by the
expiration or termination of the right to possess, hence the issue of rightful possession is decisive for, in
such action, the defendant is in actual possession and the plaintiffs cause of action is the termination of the
defendant’s right to continue in possession.
What determines the cause of action is the nature of defendant’s entry into the land. If the entry is illegal,
then the action which may be filed against the intruder within one (1) year therefrom is forcible entry. If, on
the other hand, the entry is legal but the possession thereafter became illegal, the case is one of unlawful
detainer which must be filed within one (1) year from the date of the last demand.
A close perusal of [Carmencita’s] complaint a quo reveals that the action was neither one of forcible entry
nor unlawful detainer but essentially involved an issue of ownership which must be resolved in an accion
reivindicatoria. It did not characterize [the respondents’] alleged entry into the land: whether the same was
legal or illegal. It did not state how [the respondents] entered the land and constructed a house thereon. It
was also silent on whether [the respondents’] possession became legal before [Carmencita] demanded from
them to vacate the land. The complaint merely averred that their relatives previously owned the lot [the
respondents] were occupying and that after [Carmencita] purchased it[,] she, as its new owner, demanded
[for the respondents] to vacate the land. Moreover, it is undisputed that [the respondents] and their ancestors
have been occupying the land for several decades already. There was no averment as to how or when
[Carmencita’s] predecessors tolerated [the respondents’] possession of the land. Consequently, there was no
contract to speak of, whether express or implied, between [the respondents], on one hand, and [Carmencita]
or her predecessors, on the other, as would qualify [the respondents’] possession of the land as a case of
unlawful detainer. Neither was it alleged that [the respondents] took possession of the land through force,
intimidation, threat, strategy or stealth to make out a case of forcible entry. In any event, [Carmencita]
454
cannot legally assert that [the respondents’] possession of the land was by mere tolerance. This is because
[Carmencita’s] predecessors-in-interest did not yet own the property when [Claudia] took possession
thereof. Take note that [Carmencita’s] predecessors-in-interest merely stepped into the shoes of their parents
who were also co-heirs of [Claudia]. Finally, to categorize a cause of action as one constitutive of unlawful
detainer, plaintiff’s supposed acts of tolerance must have been present from the start of the possession which
he later seek[s] to recover. This is clearly wanting in the case at bar.
Indeed, when the complaint fails to aver facts constitutive of forcible entry or unlawful detainer, as where it
does not state how entry was effected or how and when dispossession started, as in the case at bar, the
remedy should either be an accion publiciana or an accion reivindicatoria in the proper RTC. If [Carmencita]
is truly the owner of the subject property and she was unlawfully deprived of the real right of possession or
ownership thereof, she should present her claim before the RTC in an accion publiciana or an accion
reivindicatoria, and not before the municipal trial court in a summary proceeding of unlawful detainer or
forcible entry.
Munoz vs. Court of Appeals enunciated:
For even if he is the owner, possession of the property cannot be wrested from another who had been in
possession thereof for more than twelve (12) years through a summary action for ejectment. Although
admittedly[,] petitioner may validly claim ownership based on the muniments of title it presented, such
evidence does not responsibly address the issue of prior actual possession raised in a forcible entry case. It
must be stated that regardless of actual condition of the title to the property, the party in peaceable quiet
possession shall not be turned out by a strong hand, violence or terror. Thus, a party who can prove prior
possession can recover such possession even against the owner himself. Whatever may be the character of
his prior possession, if he has in his favor priority in time, he has the security that entitles him to remain on
the property until he is lawfully ejected by a person having a better right by accion publiciana or accion
reivindicatoria.24 (Citations omitted and underscoring supplied)
In Carmencita’s Motion for Reconsideration25 filed before the CA, she alleged that the case of Sarmiento
cited by the respondents is not applicable to the present controversy since it involves a boundary dispute,
which is properly the subject of an accion reivindicatoria and over which the MTCC has no jurisdiction. She
claimed that Rivera v. Rivera26 finds more relevance in the case at bar. In Rivera, the contending parties
were each other’s relatives and the Court ruled that in an unlawful detainer case, prior physical possession
by the complainant is not necessary.27Instead, what is required is a better right of possession. Further, the
MTCC cannot be divested of jurisdiction just because the defendants assert ownership over the disputed
property.
In the herein assailed Resolution dated May 5, 2009, the CA denied Carmencita’s Motion for
Reconsideration.
In essence, the instant petition presents the following issues:
I
Whether or not Carmencita’s complaint against the respondents had sufficiently alleged and proven a cause
of action for unlawful detainer.
II
Whether or not the pendency of the respondents’ petition for nullification of partition of Lot No. 1907-A and
for the issuance of new certificates of title can abate Carmencita’s ejectment suit.
Carmencita’s Allegations
In support of the petition, Carmencita reiterates that she purchased the subject lot from the Heirs of Vicente,
who were then the registered owners thereof. At the time of the sale, respondents Felix and Marilou were
occupying the subject lot. Thus, Atty. Pareja, in Carmencita’s behalf, demanded that they vacate the
property. The respondents’ refusal to comply with the demand turned them into deforciants unlawfully
withholding the possession of the subject lot from Carmencita, the new owner, whose recourse was to file a
complaint for unlawful detainer.
Further, Carmencita insists that a certificate of title shall not be subject to a collateral attack28 and the issue
of ownership cannot be resolved in an action for unlawful detainer. A pending suit involving the question of
ownership of a piece of real property will not abate an ejectment complaint as the two are not based on the
same cause of action and are seeking different reliefs.29
Additionally, Carmencita invokes the doctrine in Eastern Shipping Lines, Inc. v. CA 30 that the registered
owner of a property is entitled to its possession. In Arcal v. CA, 31 the Court also explained that the
occupation of a property not by its registered owner but by others depends on the former’s tolerance, and the
occupants are bound by an implied promise to vacate upon demand, failing at which, a suit for ejectment
would be proper.32
The Respondents’Arguments
In their Comment33 to the instant petition, the respondents stress that Carmencita’s complaint for unlawful
detainer was fundamentally inadequate. There was practically no specific averment as to when and how
possession by tolerance of the respondents began. In the complaint, Carmencita made a general claim that
the respondents possessed "the property by mere tolerance ‘with the understanding that they would
voluntarily vacate the premises and remove their house(s) thereon upon demand by the owners’." 34 In
Spouses Valdez, Jr. v. CA,35 the Court ruled that the failure of the complainants to allege key jurisdictional
facts constitutive of unlawful detainer is fatal and deprives the MTCC of jurisdiction over the action.
In their rejoinder,36 the respondents likewise argue that the issues of possession and ownership are
inseparably linked in the case at bar. Carmencita’s complaint for ejectment was based solely on her spurious
title, which is already the subject of the respondents’ petition for nullification of partition of Lot No. 1907-
A.
Our Disquisition
The instant petition lacks merit.
Carmencita had not amply alleged and proven that all the requisites for unlawful detainer are present in the
case at bar.
"Without a doubt, the registered owner of real property is entitled to its possession. However, the owner
cannot simply wrest possession thereof from whoever is in actual occupation of the property. To recover
possession, he must resort to the proper judicial remedy and, once he chooses what action to file, he is
required to satisfy the conditions necessary for such action to prosper."37
In Spouses Valdez, Jr.,38 the Court is instructive anent the three kinds of actions available to recover
possession of real property, viz:
(a) accion interdictal; (b) accion publiciana; and (c) accion reivindicatoria.
Accion interdictal comprises two distinct causes of action, namely, forcible entry (detentacion) and unlawful
detainer (desahuico) [sic]. In forcible entry, one is deprived of physical possession of real property by means
of force, intimidation, strategy, threats, or stealth whereas in unlawful detainer, one illegally withholds
possession after the expiration or termination of his right to hold possession under any contract, express or
implied. The two are distinguished from each other in that in forcible entry, the possession of the defendant
is illegal from the beginning, and that the issue is which party has prior de facto possession while in
unlawful detainer, possession of the defendant is originally legal but became illegal due to the expiration or
termination of the right to possess.
The jurisdiction of these two actions, which are summary in nature, lies in the proper municipal trial court or
metropolitan trial court. Both actions must be brought within one year from the date of actual entry on the
land, in case of forcible entry, and from the date of last demand, in case of unlawful detainer. The issue in
said cases is the right to physical possession.
Accion publiciana is the plenary action to recover the right of possession which should be brought in the
proper regional trial court when dispossession has lasted for more than one year. It is an ordinary civil
proceeding to determine the better right of possession of realty independently of title. In other words, if at
the time of the filing of the complaint more than one year had elapsed since defendant had turned plaintiff
out of possession or defendant’s possession had become illegal, the action will be, not one of the forcible
455
entry or illegal detainer, but an accion publiciana. On the other hand, accion reivindicatoria is an action to
recover ownership also brought in the proper regional trial court in an ordinary civil proceeding. 39 (Citations
omitted)
In a complaint for unlawful detainer, the following key jurisdictional facts must be alleged and sufficiently
established:
(1)initially, possession of property by the defendant was by contract with or by tolerance of the
plaintiff;
(2)eventually, such possession became illegal upon notice by plaintiff to defendant of the
termination of the latter’s right of possession;
(3)thereafter, the defendant remained in possession of the property and deprived the plaintiff of the
enjoyment thereof; and
(4)within one year from the last demand on defendant to vacate the property, the plaintiff instituted
the complaint for ejectment.40
In the case at bar, the first requisite mentioned above is markedly absent. Carmencita failed to clearly allege
and prove how and when the respondents entered the subject lot and constructed a house upon
it.41 Carmencita was likewise conspicuously silent about the details on who specifically permitted the
respondents to occupy the lot, and how and when such tolerance came about. 42 Instead, Carmencita
cavalierly formulated a legal conclusion, sans factual substantiation, that (a) the respondents’ initial
occupation of the subject lot was lawful by virtue of tolerance by the registered owners, and (b) the
respondents became deforciants unlawfully withholding the subject lot’s possession after Carmencita, as
purchaser and new registered owner, had demanded for the former to vacate the property. 43 It is worth
noting that the absence of the first requisite assumes even more importance in the light of the respondents’
claim that for decades, they have been occupying the subject lot as owners thereof.
Again, this Court stresses that to give the court jurisdiction to effect the ejectment of an occupant or
deforciant on the land, it is necessary that the complaint must sufficiently show such a statement of facts as
to bring the party clearly within the class of cases for which the statutes provide a remedy, without resort to
parol testimony, as these proceedings are summary in nature. In short, the jurisdictional facts must appear on
the face of the complaint. When the complaint fails to aver facts constitutive of forcible entry or unlawful
detainer, as where it does not state how entry was effected or how and when dispossession started, the
remedy should either be an accion publiciana or accion reivindicatoria. 44
As an exception to the general rule, the respondents’ petition for nullification of the partition of Lot No.
1907-A can abate Carmencita’s suit for unlawful detainer.
In Amagan, the Court is emphatic that:
As a general rule, therefore, a pending civil action involving ownership of the same property does not justify
the suspension of ejectment proceedings. "The underlying reasons for the above ruling were that the actions
in the Regional Trial Court did not involve physical or de facto possession, and, on not a few occasions, that
the case in the Regional Trial Court was merely a ploy to delay disposition of the ejectment proceeding, or
that the issues presented in the former could quite as easily be set up as defenses in the ejectment action and
there resolved."
Only in rare instances is suspension allowed to await the outcome of the pending civil action. One such
exception is Vda. de Legaspi v. Avendaño, wherein the Court declared:
"x x x. Where the action, therefore, is one of illegal detainer, as distinguished from one of forcible entry, and
the right of the plaintiff to recover the premises is seriously placed in issue in a proper judicial proceeding, it
is more equitable and just and less productive of confusion and disturbance of physical possession, with all
its concomitant inconvenience and expenses. For the Court in which the issue of legal possession, whether
involving ownership or not, is brought to restrain, should a petition for preliminary injunction be filed with
it, the effects of any order or decision in the unlawful detainer case in order to await the final judgment in
the more substantive case involving legal possession or ownership. It is only where there has been forcible
entry that as a matter of public policy the right to physical possession should be immediately set at rest in
favor of the prior possession regardless of the fact that the other party might ultimately be found to have purpose. The respondents, on other hand, need not be exposed to the risk of having their house demolished
superior claim to the premises involved, thereby to discourage any attempt to recover possession thru force, pending the resolution of their petition for nullification of the partition of Lot No. 1907-A, where ownership
strategy or stealth and without resorting to the courts." over the subject lot is likewise presented as an issue.
xxxx IN VIEW OF THE FOREGOING, the instant petition is DENIED.
Indisputably, the execution of the MCTC Decision would have resulted in the demolition of the house The Decision rendered on March 19, 2009 and Resolution issued on May 5, 2009 by the Court of Appeals in
subject of the ejectment suit; thus, by parity of reasoning, considerations of equity require the suspension of CA-G.R. SP No. 03489 are AFFIRMED.
the ejectment proceedings. We note that, like Vda. de Legaspi, the respondent’s suit is one of unlawful SO ORDERED.
detainer and not of forcible entry. And most certainly, the ejectment of petitioners would mean a demolition
of their house, a matter that is likely to create the "confusion, disturbance, inconveniences and expenses"
mentioned in the said exceptional case.
Necessarily, the affirmance of the MCTC Decision would cause the respondent to go through the whole
gamut of enforcing it by physically removing the petitioners from the premises they claim to have been
occupying since 1937. (Respondent is claiming ownership only of the land, not of the house.) Needlessly,
the litigants as well as the courts will be wasting much time and effort by proceeding at a stage wherein the
outcome is at best temporary, but the result of enforcement is permanent, unjust and probably irreparable.
We should stress that respondent’s claim to physical possession is based not on an expired or a violated
contract of lease, but allegedly on "mere tolerance." Without in any way prejudging the proceedings for the
quieting of title, we deem it judicious under the present exceptional circumstances to suspend the ejectment
case.45 (Citations omitted)
The Court then quoted with favor the following portion of the Decision dated July 8, 1997, penned by
Associate Justice Artemio G. Tuquero in CA-G.R. No. 43611-SP, from which the Amagan case sprang:
"ONE. Private respondent Teodorico T. Marayag anchors his action for unlawful detainer on the theory that
petitioners’ possession of the property in question was by mere tolerance. However, in answer to his demand
letter dated April 13, 1996 x x x, petitioners categorically denied having any agreement with him, verbal or
written, asserting that they are ‘owners of the premises we are occupying at 108 J.P. Rizal Street, San
Vicente, Silang, Cavite.’ In other words, it is not merely physical possession but ownership as well that is
involved in this case.["]
"TWO. In fact, to protect their rights to the premises in question, petitioners filed an action for
reconveyance, quieting of title and damages against private respondents, docketed as Civil Case No. TG-
1682 of the Regional Trial Court, Branch 18, Tagaytay City. The issue of ownership is squarely raised in
this action. Undoubtedly, the resolution of this issue will be determinative of who is entitled to the
possession of the premises in question.["]
"THREE. The immediate execution of the judgment in the unlawful detainer case will include the removal
of the petitioners’ house [from] the lot in question.["]
"To the mind of the Court it is injudicious, nay inequitable, to allow demolition of petitioners’ house prior to
the determination of the question of ownership [of] the lot on which it stands." 46 (Citation omitted)
We find the doctrines enunciated in Amagan squarely applicable to the instant petition for reasons discussed
hereunder.
Carmencita’s complaint for unlawful detainer is anchored upon the proposition that the respondents have
been in possession of the subject lot by mere tolerance of the owners. The respondents, on the other hand,
raise the defense of ownership of the subject lot and point to the pendency of Civil Case No. CEB-30548, a
petition for nullification of the partition of Lot No. 1907-A, in which Carmencita and the Heirs of Vicente
were impleaded as parties. Further, should Carmencita’s complaint be granted, the respondents’ house,
which has been standing in the subject lot for decades, would be subject to demolition. The foregoing
circumstances, thus, justify the exclusion of the instant petition from the purview of the general rule.
All told, we find no reversible error committed by the CA in dismissing Carmencita's complaint for
unlawful detainer. As discussed above, the jurisdictional requirement of possession by mere tolerance of the
owners had not been amply alleged and proven. Moreover, circumstances exist which justify the abatement
of the ejectment proceedings. Carmencita can ventilate her ownership claims in an action more suited for the

456
 THIRD DIVISION
A.M. No. P-12-3069 January 20, 2014
ATTY. VIRGILIO P. ALCONERA, Complainant,
vs.
ALFREDO T. PALLANAN, Respondent.
DECISION
VELASCO, JR., J.:
Before Us is an administrative complaint for Grave Misconduct and Making Untruthful Statements filed by
Atty. Virgilio P. Alconera against Alfredo Pallanan, Sheriff IV, assigned at the Regional Trial Court (RTC),
Branch 36 in General Santos City.
The antecedent facts are as follows:
Complainant was the counsel for Morito Rafols, the defendant in Civil Case No. 5967-2, an unlawful
detainer case entitled Cua Beng a.k.a. Manuel Sy and Ka Kieng v. Morita Rafols, et al., filed before the
Municipal Trial Court in Cities (MTCC), Branch 2 in General Santos City, South Cotabato. After trial, the
MTCC ruled against Rafols and his co-defendants in a Judgment1dated March 12, 2009, disposing as
follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant MORITO
RAFOLS, his privies, assigns, heirs, transferee, sublessee. co-Jessee or agents if any to vacate from the
subject lots and deliver possession thereof to the plaintiffs and for defendant to pay back rentals of
₱5,000.00 per month from June 2008 and every succeeding months thereafter until he vacate the premises
and to jointly and severally, together with all other defendants, pay attorney's fees in the amount of
₱20,000.00 with the other defendants and costs of litigation.
SO ORDERED.
Therefrom, Rafols, through complainant Alconera, appealed the case to the RTC, Branch 36, docketed as
Civil Case No. 675. Pending appeal, the court issued an Order dated February 18, 2011 granting Cua Beng’s
motion for execution she filed in Civil Case No. 5967-2, the unlawful detainer case. Alconera sought
reconsideration but the motion was denied through another Order2 dated March 14, 2011.
On March 17, 2011, a troubled Evelyn Rafols, Rafols’ daughter-in-law, called up Alconera, who at that time
was in Manila, to report that the sheriff, respondent Pallanan, was about to implement the adverted writ of
execution. Evelyn Rafols informed Alconera that respondent sheriff arrived along with the lawyer of the
opposing party and 30 other men to enforce the writ. Respondent sheriff then allegedly demanded payment
of PhP 720,000 to settle Rafols’ obligation to which the latter protested on the ground that the amount is too
exorbitant when they have been religiously depositing monthly rentals in court to satisfy the judgment.
After explaining the matter to Alconera, Evelyn Rafols passed her phone to respondent sheriff. Over the
phone, a verbal disagreement between the two ensued. Alconera claims that he has a pending motion for
reconsideration on the issuance of the writ of execution, but the respondent said that the motion has already
been denied. And since no Temporary Restraining Order (TRO) has been issued enjoining the
implementation, respondent claimed that he is legally mandated to perform his ministerial duty of enforcing
the writ. Complainant countered that he has not yet received a copy of the denial of the motion, rendering
the execution premature and, at the same time, preventing him from securing a TRO from the higher courts.
Nevertheless, respondent still pushed through with the execution of the judgment.
On March 18, 2011, complainant returned to General Santos City and, at his law office, found a copy of the
Order denying his Motion for Reconsideration, which was only served that very same day. The RTC ruled
that there was no pending Motion to Approve Supersedeas Bond filed with it. Instead, what was filed not
with the RTC but with the MTCC was a "NOTICE OF APPEAL – and – MOTION TO APPROVE
PROPERTY SUPERSEDEAS BOND," which was not granted.
That afternoon, Alconera went to RTC Br. 36 with his daughter to confront respondent sheriff. The face-off
escalated into a heated argument caught on video. It was complainant’s daughter, Shyla Mae Zapanta, who
457
is coincidentally his office clerk, who filmed the incident and transcribed the dialogue during the altercation.
As hereunder translated in English, the exchanges went:
ATTY. ALCONERA: Pag hatod nimo didto sa demolition order, kabalo ka na wala pa ko kadawat ug
denial? (When you served the demolition order, you know that I did not yet receive a copy of the denial
order?)
SHERIFF PALLANAN: Denial sa unsa, motion? (Denial of what, motion?)
ATTY. ALCONERA: Oo. (Yes.)
SHERIFF PALLANAN: Attorney, ang motion inyoha nang kuan diri sa korte, and akoa sa writ ko. As long
as the sheriff did not receive a TRO or any order from the court restraining him to implement the writ, I
have to go. So in case, just in case, na may resolution si judge na ireconsider and iyang order after they
declare, ideliver na sa area kung asa gi-execute so the sheriff will move out. (Attorney, the motion, that is
your… what do you call this, here in court. Mine is the writ. As long as the sheriff did not receive a TRO or
any order from the court restraining him to implement the writ, I have to go. So in case, just in case, the
judge reconsiders his order, they will declare, deliver it to the area where the writ if executed so the sheriff
will move out.)
ATTY. ALCONERA: Mo execute diay ka? Dili diay ka mangutana kung duna pa bay motion for recon ani?
(So you will execute? You will not inquire whether a motion for reconsideration has been filed?)
SHERIFF PALLANAN: Bisag may motion for recon na, Attorney, I have to go gyud. (Even if there is a
motion for reconsideration, I really have to go.)
ATTY. ALCONERA: Uy, di man na ingon ana, uy! Ana imong natun-an as sheriff?
SHERIFF PALLANAN: Oo mao na sya. Mao na sya – sa akoa ha, mao na sya. (Yes, that is it. That is it – to
me ha, that is it.)
ATTY. ALCONERA: Kita ra ta sa Supreme Court ani. (Let us see each other in the Supreme Court.)
SHERIFF PALLANAN: …(unintelligible) Ang imoha ana…imong motion ana… and imong motion ana,
delaying tactic. (Your motion is a delaying tactic.)
ATTY. ALCONERA: Ah, sige lang, atubang lang ta sa Supreme Court. (Ok, let’s just see each other in the
Supreme Court.)
SHERIFF PALLANAN: Oo, atubangon nako ko na siya, pero mag-review pud ka.
ATTY. ALCONERA: Unsay mag-review? (What review?)
SHERIFF PALLANAN: Motion nang imoha, Dong. (Yours is motion, Dong.) ("Dong" is equivalent to the
Filipino term "Totoy"; if used by one to address someone older than him, it is an insult.)
ATTY. ALCONERA: Naunsa man ka, Dong. (What happened to you, Dong?)
SHERIFF PALLANAN: Motion na imoha… Dapat diri ka mag file, dili ka didto mag-file. Ayaw ko awaya.
(Yours is motion. You should file it here, you do not file it there. Don’t quarrel with me.)
ATTY. ALCONERA: Lahi imong tono sa akoa sa telepono Dong ba. (You were rude in the telephone,
Dong.)
SHERIFF PALLANAN: Oo, kay lain man pud ka mag sulti. Ang imong venue kay diri, dili sa area. (Yes,
because you also talked bad, your venue is here in court, not in the area.)
ATTY. ALCONERA: Ingon nako sa imo nakadawat ka ba.. nakadawat ba ug… (I was just asking you
whether you received…)
SHERIFF PALLANAN: Dili nako na concern. (That is not my concern.)
ATTY. ALCONERA: O, ngano nag ingon man ka nga "Ayaw ko diktahe, Attorney?" (Why did you say,
"Don’t dictate on me, Attorney?")
SHERIFF PALLANAN: Yes, do not dictate me. Kay abogado ka, sheriff ko. Lahi tag venue. Trabaho akoa,
magtrabaho pud ka. (Yes, do not dictate me. Because you are a lawyer, and I am a sheriff. I do my job, you
do yours.)
ATTY. ALCONERA: Bastos kaayo ka manulti ba. (You are very rude!)
SHERIFF PALLANAN: Ikaw ang bastos! (You are the one who is rude!)
ATTY. ALCONERA: Magkita ta sa Supreme Court. (I will see you in the Supreme Court.)
SHERIFF PALLANAN: Magkita ta, eh! Ikaw lang akong hadlukan nga wala man ka sa area. (As you wish,
I am not afraid of you, you were not in the area.)
ATTY. ALCONERA: Unsa nang inyong style diri, Kempeta? (What is your style here, Kempetai?)
SHERIFF PALLANAN: Dili man! Na may order. Why can’t you accept? (No! There is an order. Why can’t
you accept?)
ATTY. ALCONERA: Naay proseso, Dong. Mao ning proseso: ang MR, proseso ang MR. (There is a
process, Dong. This is the process: MR.)
SHERIFF PALLANAN: Oo, proseso pud na ang akong pagimplement. Naa’y writ. (Yes, my implementing
the writ is also a process. There is a writ.)
ATTY. ALCONERA: Nabuang, ka Dong? (What is going on with you, Dong?)
SHERIFF PALLANAN: Ka dugay na nimo nga abogado, wala ka kabalo! (You have been a lawyer for a
long time now, yet you do not know!)
ATTY. ALCONERA: Dugay na bitaw. Ikaw bago ka lang na sheriff. (Yes, I have been a lawyer for a long
time now, you, you are new in your job as sheriff).
SHERIFF PALLANAN: Pero kabalo ko. (But I know.)
ATTY. ALCONERA: Susmaryosep!
SHERIFF PALLANAN: O, di ba? Wala sa padugayay. Naa sa kahibalo. (Isn’t that true? It is not the length
of time one has spent on his job. It is the knowledge that one possesses.)
ATTY. ALCONERA: Tanawa imong pagka sheriff, Dong. (Know you job as a sheriff, Dong.)
SHERIFF PALLANAN: Tanawa pud imong pagka abogado kung sakto. Pilde! Sige mo pangulekta didto
ibayad sa imo! (Know your job also as a lawyer, see if you are correct. Loser! You [and the Rafols] are
always collecting [from the other defendants] so your fees can be paid!)
ATTY. ALCONERA: Ngano wala man lagi nimo kuhaa ang mga butang didto, Dong? (Why did you not
bring with you the things that you had gathered, Dong.)
SHERIFF PALLANAN: Oo, kay hulaton ta ka pag demotion. (Yes, because I will wait for you on demotion
day.)
ATTY. ALCONERA: Nahadlok ka, Dong. (You were afraid, Dong.)
SHERIFF PALLANAN: Wala ko nahadlok, Doy. Sa demotion adto didto, Attorney. Sulayi ko! Sulayan
nato imong pagkaabogado! (I’m not afraid of you, Doy. On demotion day, you go there, Attorney. You try
me! Let us see how good a lawyer you are.) ("Doy" is the same as "Dong.")
ATTY. ALCONERA: March 22 pa ang hearing sa imong abogado, Dong. (The hearing of the motion of
your lawyer, is on March 22 yet, Dong.)
SHERIFF PALLANAN: Asus, Pinobre na imong style, Attorney. Bulok! (Your style is that of an
impoverished lawyer, Attorney. Dullard!)
It is against the foregoing backdrop of events that Alconera filed a Complaint-Affidavit3 against the
respondent sheriff for grave misconduct before this Court on April 6, 2011. The case was referred to the
Office of the Court Administrator (OCA) and was docketed as AM No. 11-3634-P. As directed by the OCA,
respondent filed his comment.4 In it, he averred that the duty of a court sheriff in enforcing a writ of
execution is ministerial, and without a TRO enjoining it, a sheriff is duty bound to implement it.
On July 14, 2011, respondent filed his own Affidavit of Complaint5 against herein complainant for Grave
Misconduct and for violating the Code of Ethics. Respondent alleged that during the enforcement of the
writ, a second phone conversation took place. Complainant allegedly called up Evelyn Rafols who put him
on loudspeaker for the respondent to hear his words. Alconera then allegedly made a threat that there will be
bloodshed if respondent’s party pushes through with the implementation of the writ. Respondent likewise
claimed that complainant berated him at his office on March 18, 2011 and that the incident was orchestrated
by the complainant. His (respondent sheriff’s) complaint affidavit avers:
6. GRAVE MISCONDUCT OF ATTY. VIRGILIO ALCONERA – The planned attack happened in our
office on March 18, 2011 in the afternoon, after lunch, in the presence of his lady companion (believed to
[be] his daughter), who is so delighted in taking videos. He is so angry and at rage as if he is the boss in our
458
office, yelling and nagging at me with NO RESPECT as a nomad. THE ONLY PERSON AROUND WAS
ME, THE GIRL HE BROUGHT THERE (who is taking videos), AND THE NAGGING ATTY. VIRGILIO
ALCONERA (JUST THREE OF US), while pointing his finger into his MOTION for Reconsideration that
he is holding [sic] almost an inch to my face. Saying "KITA NIMO NI, KITA NIMO NI?" NA INSULTO
KO NIMO NGANO WALA KA NI PATOO NAKO PAYLAN TAKA UG KASO HULATA SA
SUPREME COURT! (DO YOU SEE THIS? DO YOU SEE THIS? YOU INSULTED ME WHY DID YOU
NOT FOLLOW MY ORDER I WILL FILE CHARGES AGAINST YOU WAIT FOR IT IN THE
SUPREME COURT!) HE wants me to shiver in scare and expect me to beg. No, GO I said. I ALWAYS
REPEATED THE WORDS "WHERE IS YOUR T.R.O. Just present it." Because he is too loud, Mrs. Nenita
Paredes, our stenographer, ARRIVED and middle on us our arguments. On the mid part of the arguments,
he recorded the events; he and his companion, cohort in designing the plan of the attack, orchestrated it.
IT’S AN ASSAULT TO THE OFFICER OF THE LAW. He told me – SHERIFF KA LANG WALA KAY
NABAL AN. NGANON NADAWAT MAN KA DIRI BOGO KA. (YOU ARE JUST A SHERIFF. WHAT
DO YOU KNOW? WHY ARE YOU ADMITTED HERE YOU DUMB, WHO TAUGHT YOU THAT?)
Ana mo diri IPINATAY! KINSA NAG TUDLO SA IMOHA ANA. While he almost struck his motion
papers into my face, I was caught unaware.
In view of respondent’s counter-charge, Alconera supplemented his affidavit-complaint6 to include a charge
against the former for False Testimony. Complainant belied the claims of respondent sheriff, and showed
that the respondent’s allegations can nowhere be seen in the transcript of the altercation.
On March 2, 2012, this Court, upon the OCA’s recommendation, resolved to re-docket Alconera’s
complaint as a regular administrative case with docket No. A.M. No. P-12-3069 and referred the same to the
Executive Judge of the Regional Trial Court, General Santos City, South Cotabato, for investigation, report,
and recommendation.
After due proceedings, the investigating judge submitted a report, styled as Order 7 dated August 6, 2013,
with the following recommendation:
Based on the findings and evaluation, the herein Executive Judge hereby recommends the respondent Sheriff
be ADMONISHED. The respondent must be reminded that as a Court Employee, he must exercise utmost
patience and humility in the performance of his duties amidst all the pressures and personal attacks against
his person because he carried with him the image of the entire judiciary.
SO ORDERED.
The Executive Judge adopted the transcript of the altercation as appearing in the affidavit of Shyla Mae
Zapanta and based his recommendation mainly thereon.
The Issues
The main issue in this case is whether or not respondent can be held administratively liable for grave
misconduct and false testimony. In fine, the controversy stems from the propriety of the implementation of
the writ of execution, and the altercation between complainant and respondent. While the investigating
judge made a recommendation based on how respondent conducted himself as an officer of the court in the
afternoon of March 18, 2013, there was no discussion regarding the propriety of the implementation of the
writ, which is the main issue in the case for grave misconduct. It then behooves this Court to sift through the
arguments and records to rule on this point.
The Court’s Ruling
Grave Misconduct
Misconduct has been defined as "a transgression of some established and definite rule of action, more
particularly, unlawful behavior or gross negligence by a public officer." The misconduct is grave if it
involves any of the additional elements of corruption, willful intent to violate the law, or to disregard
established rules, all of which must be established by substantial evidence, and must necessarily be manifest
in a charge of grave misconduct.8 In this case, complainant imputes grave misconduct on the respondent for
the following acts:
 1. For enforcing the writ despite the fact that complainant has yet to receive the copy of the order
denying his motion for reconsideration on the issuance of the writ of execution;
2. For allegedly leaking to the opposing counsel the issuance of the order denying the motion for
reconsideration;
3. For allegedly demanding ₱720,000 from Rafols for a ₱165,000.00 obligation; and
4. For allegedly being arrogant and disrespectful.
Complainant admits that there is no TRO enjoining the enforcement of the writ, nor allegation in his
pleadings that a motion to quash the writ of execution was ever filed. However, complainant asserts that
respondent committed grave misconduct when the latter implemented the writ prior to serving the
complainant a copy of the order denying the motion for reconsideration. According to complainant, said
motion stayed the execution, and the writ could not have been validly executed without first informing the
parties concerned of the motion’s denial.
We rule against complainant on this point.
It must be borne in mind that the case at bar traces its roots to an unlawful detainer case wherein the MTCC
ruled against Rafols, complainant’s client. In ejectment cases, the rulings of the courts are immediately
executory and can only be stayed via compliance with Section 19, Rule 70 of the Rules of Court, to wit:
Section 19. Immediate execution of judgment; how to stay same. — If judgment is rendered against the
defendant, execution shall issue immediately upon motion, unless an appeal has been perfected and the
defendant to stay execution files a sufficient supersedeas bond, approved by the Municipal Trial Court and
executed in favor of the plaintiff to pay the rents, damages, and costs accruing down to the time of the
judgment appealed from, and unless, during the pendency of the appeal, he deposits with the appellate court
the amount of rent due from time to time under the contract, if any, as determined by the judgment of the
Municipal Trial Court. In the absence of a contract, he shall deposit with the Regional Trial Court the
reasonable value of the use and occupation of the premises for the preceding month or period at the rate
determined by the judgment of the lower court on or before the tenth day of each succeeding month or
period. The supersedeas bond shall be transmitted by the Municipal Trial Court, with the other papers, to the
clerk of the Regional Trial Court to which the action is appealed.
Clearly then under said Sec. 19, Rule 70, a judgment on a forcible entry and detainer action is made
immediately executory to avoid further injustice to a lawful possessor. The defendant in such a case may
have such judgment stayed only by (a) perfecting an appeal; (b) filing a supersedeas bond; and (c) making a
periodic deposit of the rental or reasonable compensation for the use and occupancy of the property during
the pendency of the appeal.9The failure of the defendant to comply with any of these conditions is a ground
for the outright execution of the judgment, the duty of the court in this respect being ministerial and
imperative. Hence, if the defendant-appellant has perfected the appeal but failed to file a supersedeas bond,
the immediate execution of the judgment would automatically follow. Conversely, the filing of a
supersedeas bond will not stay the execution of the judgment if the appeal is not perfected. Necessarily then,
the supersedeas bond should be filed within the period for the perfection of the appeal. 10
In the case at bar, complainant lost his client’s case and appealed to the RTC. His client has also been
periodically depositing rental with the court for the use of the property pending appeal. However, as ruled by
the RTC, the bond filed did not meet the legal requirements because first and foremost, the bond posted was
a property bond, not cash nor surety. Furthermore, Rafols did not own the property he posted as bond and
besides, it was also not issued in favour of the plaintiff in the ejectment case. Because of the non-compliance
with the requirements under the above-quoted rule, the execution of the judgment was not effectively stayed.
The only exceptions to non-compliance are the existence of fraud, accident, mistake or excusable negligence
which prevented the defendant from posting the supersedeas bond or making the monthly deposit, or the
occurrence of supervening events which brought about a material change in the situation of the parties and
which would make the execution inequitable.11 But whether or not these obtain in the case at bar is an issue
best left to the court that issued the writ of execution.
459
Given the above circumstances, there was no legal impediment preventing respondent sheriff from
performing his responsibility of enforcing the writ of execution. Since Rafols failed to comply with the
requirements under the Rules, Cua Beng who prevailed in the unlawful detainer case is entitled as a matter
of right to the immediate execution of the court’s judgment both as to the restoration of possession and the
payment of the accrued rentals or compensation for the use and occupation of the premises. 12
Well-settled is that the sheriff’s duty in the execution of a writ is purely ministerial; he is to execute the
order of the court strictly to the letter. He has no discretion whether to execute the judgment or not. When
the writ is placed in his hands, it is his duty, in the absence of any instructions to the contrary, to proceed
with reasonable celerity and promptness to implement it in accordance with its mandate. It is only by doing
so could he ensure that the order is executed without undue delay. 13 This holds especially true herein where
the nature of the case requires immediate execution. Absent a TRO, an order of quashal, or compliance with
Sec. 19, Rule 70 of the Rules of Court, respondent sheriff has no alternative but to enforce the writ.
Immediacy of the execution, however, does not mean instant execution. The sheriff must comply with the
Rules of Court in executing a writ. Any act deviating from the procedure laid down in the Rules of Court is
a misconduct and warrants disciplinary action. In this case, Sec. 10(c), Rule 39 of the Rules prescribes the
procedure in the implementation of the writ. It provides:
Section 10. Execution of judgments for specific act. —
xxxx
(c) Delivery or restitution of real property. — The officer shall demand of the person against whom the
judgment for the delivery or restitution of real property is rendered and all persons claiming rights under him
to peaceably vacate the property within three (3) working days, and restore possession thereof to the
judgment obligee, otherwise, the officer shall oust all such persons therefrom with the assistance, if
necessary, of appropriate peace officers, and employing such means as may be reasonably necessary to
retake possession, and place the judgment obligee in possession of such property. Any costs, damages, rents
or profits awarded by the judgment shall be satisfied in the same manner as a judgment for money.
Based on this provision, enforcement in ejectment cases requires the sheriff to give notice of such writ and
to demand from defendant to vacate the property within three days. Only after such period can the sheriff
enforce the writ by the bodily removal of the defendant in the ejectment case and his personal
belongings.14 Even in cases wherein decisions are immediately executory, the required three-day notice
cannot be dispensed with. A sheriff who enforces the writ without the required notice or before the expiry of
the three-day period is running afoul with the Rules. 15
In the present controversy, the Order denying the motion for reconsideration was allegedly served,
according to the respondent, on the same day the writ was executed on March 17, 2011. Complainant,
however, avers that his office was only able to receive the denial the day after the execution or on March 18,
2011. At first blush, one might hastily conclude that the three-day notice rule was apparently not observed.
This Court, however, is not prepared to make such a finding. We are mindful of the possibility that a
demand to vacate has already been given when complainant and Rafols were first served the Order granting
the issuance of a writ of execution, before the motion for reconsideration was filed. More importantly,
complainant failed to allege con-compliance with Sec. 10(c) of Rule 39.
Thus far, no deviation from the Rules has been properly ascribed to respondent.1âwphi1 As an officer of the
court, he is accorded the presumption of regularity in the performance of his duties. The burden was on
complainant to adduce evidence that would prove the respondent’s culpability, if any. Without evidence of
any departure from well established rules, any unlawful behaviour, or any gross negligence on his part, the
presumption remains applicable and respondent cannot be held administratively liable for the offense of
grave misconduct.
Discourtesy in the Performance of Official Duties
The foregoing notwithstanding, the Court adopts in part the recommendation of the investigating judge that
respondent should nonetheless be penalized for discourtesy in the performance of his official duties.
As a public officer and a trustee for the public, it is the ever existing responsibility of respondent to
demonstrate courtesy and civility in his official actuations with the public.16 In Court Personnel of the Office
of the Clerk of Court of the Regional Trial Court – San Carlos City v. Llamas,17 this Court has held that:
Public service requires integrity and discipline. For this reason, public servants must exhibit at all times the
highest sense of honesty and dedication to duty. By the very nature of their duties and responsibilities, they
must faithfully adhere to, hold sacred and render inviolate the constitutional principle that a public office is a
public trust; that all public officers and employees must at all times be accountable to the people, serve them
with utmost responsibility, integrity, loyalty and efficiency.
xxxx
At all times, employees of the judiciary are expected to accord respect to the person and the rights of
another, even a co-employee. Their every act and word should be characterized by prudence, restraint,
courtesy and dignity. Government service is people-oriented; high-strung and belligerent behavior has no
place therein.
Rude and hostile behavior often translates a personal conflict into a potent pollutant of an otherwise peaceful
work environment; ultimately, it affects the quality of service that the office renders to the public. Letting
personal hatred affect public performance is a violation of the principle enshrined in the Code of Conduct
and Ethical Standards for Public Officials and Employees, a principle that demands that public interest be
upheld over personal ones.
Improper behavior especially during office hours exhibits not only a paucity of professionalism at the
workplace, but also great disrespect for the court itself. Such demeanor is a failure of circumspection
demanded of every public official and employee. Thus, the Court looks "with great disfavor upon any
display of animosity by any court employee" and exhorts every court personnel to act with strict propriety
and proper decorum to earn public trust for the judiciary. Colleagues in the judiciary, including those
occupying the lowliest position, are entitled to basic courtesy and respect.
In discharging its constitutional duty of supervising lower courts and their personnel, this Court cannot
ignore the fact that the judiciary is composed essentially of human beings who have differing personalities,
outlooks and attitudes; and who are naturally vulnerable to human weaknesses. Nevertheless, the Code of
Judicial Ethics mandates that court personnel must not only be, but also be perceived to be, free from any
impropriety -- with respect not only to their duties in the judicial branch, but also to their behavior anywhere
else.
Based on the transcript of the altercation, it is readily apparent that respondent has indeed been remiss in this
duty of observing courtesy in serving the public. He should have exercised restraint in dealing with the
complainant instead of allowing the quarrel to escalate into a hostile encounter. The balm of a clean
conscience should have been sufficient to relieve any hurt or harm respondent felt from complainant's
criticisms in the performance of his duties. On the contrary, respondent's demeanour tarnished the image not
only of his office but that of the judiciary as a whole, exposing him to disciplinary measure.
Making Untruthful Statements
Lastly, the charge of making untruthful statements must also fail. While the statements mentioned in
respondent's complaint-affidavit were not reflected in the transcript submitted by the complainant, this
actuality is not conclusive evidence that such event did not take place. As claimed by respondent,
complainant's clerk was only able to record a part of the argument. We cannot then discount the probability
that there is more to the argument than what was caught on video and there remains the possibility that what
respondent narrated and what complainant recorded both actually transpired.
WHEREFORE, respondent Alfredo T. Pallanan is ADMONISHED and WARNED to be always courteous
in dealing with the public in the performance of official duties. A repetition of the same or similar acts will
be dealt with more severely.
SO ORDERED.

460
 SECOND DIVISION
G.R. No. 189248 February 5, 2014
TEODORO S. TEODORO (Deceased), Substituted by his heirs/sons NELSON TEODORO and
ROLANDO TEODORO, Petitioners,
vs.
DANILO ESPINO, ROSARIO SANTIAGO, JULIANA CASTILLO, PAULINA LITAO, RAQUEL
RODRIGUEZ, RUFINA DELA CRUZ, and LEONILA CRUZ, Respondents.
DECISION
PEREZ, J.:
We here have what appears to be a cut and dried case for ejectment which has, nonetheless, resulted in three
conflicting and varying decisions of the lower courts. We exercise judicial restraint: we simply delineate the
possessory rights of the warring parties and refrain from ruling on these squabbling heirs' respective claims
of ownership.
This petition for review on certiorari under Rule 45 of the Rules of Court assails the Decision 1 of the Court
of Appeals in CA-G.R. SP No. 99805 which reversed and set aside the Decision 2 of the Regional Trial Court
(RTC) Branch 81, Malolos, Bulacan in Civil Case No. 634-M-06 which, in turn, vacated and set aside the
Decision3 of the Municipal Trial Court (MTC), Bulacan, Bulacan in Civil Case No. 1240. The case is for
Forcible Entry filed by the predecessor-in-interest of petitioners Nelson and Rolando Teodoro, heirs of
Teodoro S. Teodoro (Teodoro Teodoro), against respondents Danilo Espino, Rosario Santiago, Juliana
Castillo, Paulina Litao, Raquel Rodriguez, Rufina dela Cruz and Leonila Cruz, a squabble for physical
possession of a portion of a real property, the ownership of which is traceable to Genaro Teodoro (Genaro).
The subject property is a portion within Cadastral Lot No. 2476 with a total area of 248 square meters,
covered by Tax Declaration No. 99-05003-0246, registered in the name of Genaro, long deceased ascendant
of all the parties. The subject property pertains to the vacant lot where the old ancestral house of Genaro
stood until its demolition in June 2004, at the instance of Teodoro Teodoro.
Genaro had five children: Santiago; Maria, from whom respondents descended and trace their claim of
ownership and right of possession; Petra, Mariano, Teodoro Teodoro’s father; and Ana. Genaro and his
children are all deceased.
Respondents’ respective parents are first cousins of Teodoro Teodoro. All parties are collateral relatives of
Petra Teodoro: Teodoro Teodoro is her nephew while respondents are her grandnephews and grandnieces,
descendants of Petra’s sister, Maria Teodoro.
Of all Genaro’s children, only Petra occupied the subject property, living at the ancestral house. Genaro’s
other children, specifically Santiago, Maria and Mariano were bequeathed, and stayed at, a different
property within the same locality, still from the estate of their father.
After Petra’s death, her purported will, a holographic will, was probated in Special Proceedings No. 1615-M
before RTC, Branch 8, Malolos, Bulacan, which Decision on the will’s extrinsic validity has become final
and executory.4 In the will, Petra, asserting ownership, devised the subject property to Teodoro Teodoro.
Teodoro Teodoro effected the demolition of the ancestral house, intending to use the subject property for
other purposes.
Soon thereafter, respondents, who resided at portions of Lot No. 2476 that surround the subject property on
which the ancestral house previously stood, erected a fence on the surrounding portion, barricaded its
frontage, and put up a sign thereat, effectively dispossessing Teodoro Teodoro of the property bequeathed to
him by Petra.
After Teodoro Teodoro’s demand for respondents to vacate the subject property went unheeded, he filed the
complaint for forcible entry against respondents, alleging the following in pertinent part:
3. [Teodoro Teodoro] is a nephew of the deceased Petra Teodoro vda. De Salonga x x x who executed a
holographic will designating him therein as administrator of her estate and likewise devised in his favor a
parcel of land located in Purok 2, Bambang, Bulacan, Bulacan and the ancestral house built therein. Other
properties of Petra Teodoro were bequeathed in favor of other named heirs. x x x.
461
4. Aforementioned parcel of land with the ancestral house was in turn inherited by the decedent Petra
Teodoro from her father Genaro Teodoro who also gave separate properties to his four other children, who
are all dead, namely, Santiago who has eight (8) children, Maria who has six (6) children, Ana who has no
child and Mariano who has eight (8) children including herein [Teodoro Teodoro] as the eldest;
5. It is of common knowledge in the locality that the subject property where the ancestral house stood was
given by Genaro Teodoro to [his] daughter Petra Teodoro to the exclusion of all others. Petra Teodoro lived
in that property all her life. x x x.
xxxx
7. This subject property is declared for taxation purposes in the name of [Teodoro Teodoro’s] grandfather,
Genaro Teodoro as shown by the hereto attached photocopy of Tax Declaration of Real Property No. 99-
05003-0246 for the year 2000 which is marked as Annex "F";
xxxx
10. [Subject property] having been given to [Teodoro Teodoro] as a devisee in the approved will of Petra
Teodoro, it became his absolute property to the exclusion of all others;
11. Sometime in July 2004, [Teodoro Teodoro] as the absolute owner and possessor thereof, decided to
demolish the already dilapidated ancestral house in the subject property to clear the same for other available
uses/purposes. x x x.
12. By means of force and intimidation, [Teodoro Teodoro] was ousted likewise prevented by [respondents]
from entering the subject property. [Respondents] have also onverted/appropriated for themselves the
exclusive use of the subject property into their own parking lot and other personal use, to the exclusion and
damage of [Teodoro Teodoro];5 (Emphasis supplied).
In their Answer, respondents asserted their own ownership and possession of the subject property,
countering that:
5. It is worth to mention that [respondents] Danilo Espino and Rosario Santiago are residing thereat for more
than fifty (50) years, while [respondents] Paulina Litao and Rufina dela Cruz are resident of the subject
place for more than sixty (60) years, most of them residing thereat since birth, at the time that their
grandmother Maria Teodoro is still living and residing thereat.
6. Thus, when siblings Maria Teodoro (grandmother of [respondents]), Petra (to whom the subject property
was inherited) and Mariano (father of [Teodoro Teodoro]) died, the heirs, who include [respondents] and
[Teodoro Teodoro] extrajudicially, among themselves, partitioned the property left by their ascendants,
which are still in the name of the siblings’ father Genaro Teodoro. [Respondents], since they are already
residing in the subject property and had built their respective houses therein, had with them the said subject
[property]. x x x.
7. [Respondents], through their authorized representative, [respondent] Rosario Santiago, in the exercise of
their act of ownership of the subject lot paid for its real property taxes. x x x.
8. x x x [Teodoro Teodoro] deliberately failed to consider and mention in his complaint that there was
already a decision rendered by court, declaring the subject property as part of the property left by Petra
Teodoro to her legitimate heirs, which include among others [respondents].
9. That however, due to [respondents’] failure as substituted heirs to execute the order, dated May 18, 1994,
a Motion for the Revival of Judgment was filed and heard before Branch 10 of the Regional Trial Court of
Bulacan. The Honorable Court x x x resolved x x x the extent of the allowance and admission to probate the
holographic will of the late Petra Teodoro, where a Certificate of Allowance dated February 14, 1990 was
subsequently issued, as its Decision dated June 29, 1989 became final and executory, affect the revival of
judgment.
xxxx
13. While it is true that the dilapidated ancestral house in the subject property was demolished; however, the
said act, as suggested by [Teodoro Teodoro] was allowed by [respondents] (who had their respective houses
built in the same lot where the same is constructed) in order to have the same be partitioned among
themselves. As [Teodoro Teodoro] was constantly complaining that the property left to him and his siblings
is less than the subject property given to the [respondents] in area, they agreed verbally that if the ancestral
house will be demolished, a surveyor would be at ease in surveying the same and determine if indeed the
area is more than that allotted to [Teodoro Teodoro], which in that case, as per agreement, the excess, if any
will suffice the lack in area of [Teodoro Teodoro]. It was however found out that the area of the subject
property was less than the area that should be allocated and apportioned as shares of [respondents], hence
they [intimated] the same to [Teodoro Teodoro], who got mad and threaten[ed] to get the subject property
from them.
14. The putting of signs "No Trespassing" posted at the frontage of the subject property is an allowable act
by owners, residing thereat to protect their property against intruders, hence there is nothing wrong for
[respondents] to put the same. x x x.
15. There is no truth, as what [Teodoro Teodoro] claimed in paragraph 12 of his complaint that he was
ousted and prevented from entering the subject property by [respondents], because in the first place he could
not be ousted thereat, as he is not in possession of the said property. 6 (Emphasis theirs).
After trial, the MTC dismissed the complaint, ruling on the issue of ownership and ultimately resolving the
issue of who between Teodoro Teodoro and respondents had a better right to possess the subject property:
x x x [Teodoro Teodoro’s] claim of ownership over the subject lot stemmed from the approved and duly
probated Holographic Will of Petra Teodoro. Although it its undisputed that Petra Teodoro was in actual
possession of the subject lot prior to her demise and that she left a Holographic Will wherein the subject lot
was bequeathed to [Teodoro Teodoro], the probate of her last will has not finally settled the question of
ownership over the subject lot. Clearly, the subject lot still forms part of the estate of the late Genaro
Teodoro. In the absence of an actual and approved partition plan among his heirs, the subject lot remains
part of the Genaro Teodoro’s estate. Since his children Santiago, Maria, Petra, Maraino and Ana are all
deceased, their children or grandchildren by right of representation have the right to inherit from their
ancestor.
xxxx
A person who claims that he has a better right to real property must prove his ownership of the same x x x.
Clearly, [Teodoro Teodoro] has failed to prove his ownership over the property or that of his devisee Petra
Teodoro. Thus, the court is convinced that the possession of [respondents] over the subject lot should not be
disturbed, until and unless the question of ownership over the same shall have been finally resolved before
the appropriate court.
xxxx
WHEREFORE, judgment is hereby rendered dismissing the complaint and the counterclaim interposed in
relation thereto, without pronouncement as to costs.7
The RTC, in its appellate jurisdiction over forcible entry cases, acting on Teodoro Teodoro’s appeal,
adopted the factual findings of the MTC, but reversed the ruling, ruled in favor of Teodoro Teodoro and
ordered the ejectment of respondents from the subject property. It pithily ruled, thus:
But the bottom line for resolution in this case is who has the prior physical possession of the subject parcel.
x x x.
The late Petra Teodoro’s share to the inheritance of his father Genaro is admittedly the old ancestral house
and the lot over which it stands. x x x.
[Teodoro Teodoro] claims right to possession only over said portion (now the vacant space x x x not the
entire lot 2476 until he was displaced therefrom by the [respondents] through force). [Teodoro Teodoro]
does not contest the perimeter area of Lot 2476 where [respondents] are residing. He has acknowledged in
clear terms that the rest of the area of Lot 2476 is occupied by [respondents]. The assailed decision
recognized that Petra Teodoro was in actual possession of the lot prior to her death. It is [Teodoro
Teodoro’s] argument that Petra Teodoro, tacked [from by Teodoro Teodoro], has had prior physical
possession of the controverted portion of lot 2476. He went on arguing that regardless of whether or not the
duly probated will completely settled the issue of partition of the remaining estate of Genaro Teodoro, he
has the prior actual and physical possession of the vacant space where the old ancestral house formerly
462
stands, passed on to him by the late Petra Teodoro, a fact [respondents] deny. [Respondents] even belied that
they have ousted and restrained [Teodoro Teodoro] from entering the subject property.
Said pretension is however negated by evidence showing the barricaded vacant space or disputed area
consisting of 120 square meters, more or less (approximate width of lot is 7.55 meters, approximate length is
17.9 meters with indented portion measuring 1.5 meters deep x x x), where the cemented portion of the
flooring of the bakery near the national road lease by [respondents] is still existing x x x and over which he
exercised control and constructive possession. x x x.
xxxx
[Teodoro Teodoro] anchors on the other hand his claim on the Holographic Will of Petra Teodoro dated
May 1, 1973 x x x duly probated and approved in a Decision x x x dated June 19, 1989 of Branch 8 of this
Court in SP Proceeding No. 1615-M, which Decision has become final and executory as of February 14,
1990 x x x bequeathing the disputed portion of Lot 2476 and the old ancestral house thereon to him, the
letters of administration issued to him by Branch 8 of this Court x x x, the Project of Partition submitted to
the said court x x x plus his possession of the vacant area or disputed portion of [L]ot 2476. [Respondents]
has stressed that he is not contesting the rest of [L]ot 2476 occupied by the houses of [respondents].
Analyzing the facts of the case, the lower [court] concluded that the subject parcel is a part of the estate of
the late Genaro Teodoro and in the absence of an approved partition among the heirs, remains a community
property over which the legal heirs of Genaro Teodoro have the right to inherit. All therefore are entitled to
exercise the right of dominion including the right of possession.
This Court disagrees with the said ruling applying the plethora of cases decisive of the issue and consistent
with the established jurisprudence that the lower court cannot dispose with finality the issue of ownership-
such issue being inutile in an ejectment suit except to throw light on the question of possession.
Given the foregoing, [Teodoro Teodoro] has established a valid claim to institute the eviction suit against
[respondents] over the disputed area or vacant portion of Lot 2476 and for him to be restored therein.
xxxx
WHEREFORE, premises considered, finding reversible error on the appealed judgment, the same is hereby
VACATED and SET ASIDE and a new one is entered as follows:
1. Ordering that [Teodoro Teodoro] be restored in the lawful possession of the disputed area of Lot
2476 and for the eviction therefore of [respondents] on said portion; and
2. [Respondents] to pay the costs of the suit. 8
With the reversal of the MTC’s ruling, respondents then appealed the RTC’s decision to the Court of
Appeals. The appellate court reversed the RTC, likewise dismissed the complaint as the MTC had done, but
did not reach the same result as that of the inferior court. It specifically ruled that Teodoro Teodoro:
(1) never had physical possession of the subject property, not having lived there at anytime,
whether while Petra was alive nor after her death;
(2) did not adduce evidence before the lower courts on proof of payment of any real property tax
on the disputed vacant lot, portion of Lot No. 2476, or to the whole of Lot No. 2476;
(3) did not solely or unilaterally cause the demolition of the ancestral house such a fact equating to
his exclusive ownership of the subject property and complete control and dominion over it; and
(4) cannot tack his alleged possession of the subject property to that of Petra Teodoro simply by
virtue of the latter’s holographic will, leading to the issue of ownership which is insignificant in
forcible entry cases.
In all, the appellate court found that Teodoro Teodoro (substituted by his heirs Nelson and Rolando Teodoro
at that juncture) "failed to discharge the burden of proof that he had prior actual physical possession of the
subject [property] before it was barricaded by [respondents] to warrant the institution of the forcible entry
suit." The appellate court disposed of the case, thus:
WHEREFORE, premises considered, the assailed Decision [dated] 28 February 2007 and Resolution dated
26 June 2007 of the Regional Trial Court of Malolos, Bulacan, Branch 81 are hereby REVERSED and SET
ASIDE, and the instant case is DISMISSED for lack of merit. 9
Hence, this appeal by certiorari filed by the heirs of Teodoro Teodoro raising the following errors in the
appellate court’s dismissal of the complaint:
1. The Honorable Court of Appeals failed to take notice of relevant facts such as petitioner
Teodoro’s exercise of possessory rights over the subject property, among others, which if properly
considered, will justify a different conclusion.
2. The Honorable Court of Appeals misappreciated undisputed facts such as the respondents’
fencing of the vacant area cleared by petitioner Teodoro and their barricading of the frontage
thereof, among others, that deprived petitioner Teodoro his possessory rights over the vacant area.
3. The findings of the Honorable Court of Appeals are grounded entirely on speculation, surmises
or conjectures.
4. There is grave abuse of discretion in the appreciation of facts in the assailed Decision.10
The assigned errors define the issue for our resolution which is whether or not the act of respondents in
barricading the frontage of the portion of Lot No. 2476 on which stood the ancestral house occupied by
Petra amounted to Teodoro Teodoro’s unlawful dispossession thereof through the forcible entry of
respondents.
The ground rules in forcible entry cases:11
(1) One employs force, intimidation, threat, strategy or stealth to deprive another of physical
possession of real property.
(2) Plaintiff (Teodoro Teodoro) must allege and prove prior physical possession of the property in
litigation until deprived thereof by the defendant (herein respondents). This requirement implies
that the possession of the disputed land by the latter was unlawful from the beginning.
(3) The sole question for resolution hinges on the physical or material possession (possession de
facto) of the property. Neither a claim of juridical possession (possession de jure) nor an averment
of ownership by the defendant can, at the outset, preclude the court from taking cognizance of the
case.
(4) Ejectment cases proceed independently of any claim of ownership, and the plaintiff needs
merely to prove prior possession de facto and undue deprivation thereof. In this case, both parties
assert prior and exclusive physical possession in the concept of owner12 acquired through
succession13 from the same decedent, their aunt and grand aunt, respectively, Petra. In turn, Petra
inherited the property from her father Genaro, in whose name the subject property is still
registered.
Teodoro Teodoro’s assertion of physical possession comprises mainly of his claimed ownership of the
subject property acquired through testate succession, or via the holographic will of Petra. 14 Teodoro Teodoro
then points, as an exercise of his ownership and incident of his physical possession of the subject property,
to his act of demolition of the ancestral house.
On the other hand, respondents assert possession likewise by virtue of ownership manifested in their
residence at Lot No. 2476 spanning more than five (5) decades, reckoned even from the time Maria,
respondents’ grandmother and sister of Petra, was alive and resided thereat. 15
Respondents trace their possession from the extrajudicial partition of the commingled properties of the
siblings Maria, respondents’ direct ascendant, Petra and Mariano, father of Teodoro Teodoro, progeny and
heirs of Genaro.16 According to respondents, from the partition, the heirs of all three Genaro children
possessed and occupied their respective shares: respondents received Lot No. 2476 which encompasses
herein subject property, while Teodoro Teodoro and his siblings received a different property, "a 667
residential lot at Bambang, Bulacan, Bulacan."
Also, respondents aver that, through respondent Rosario Santiago, they paid for Lot No. 2476’s realty taxes.
Respondents counter that the subject property was not solely bequeathed to Teodoro Teodoro as it is part of
Petra’s estate for disposition to her legitimate heirs, including herein respondents. Lastly, on Teodoro
Teodoro’s claim that he had solely effected the demolition of the ancestral house, respondents contend that
463
they had allowed the demolition upon the understanding that the parties would then completely partition the
subject property, as that portion is centrally located in Lot No. 2476 where the respondents actually reside.
Given both parties respective claims of ownership over the subject property via succession from their
ascendants Maria, Petra and Mariano Teodoro, who are all compulsory heirs of Genaro in whose name the
subject property is still registered, the MTC ruled that respondents cannot be disturbed in their possession of
the subject property "until and unless the question of ownership over the same [is] finally resolved before
the appropriate court."
In contrast, the RTC, without categorically resolving the issue of ownership of Lot No. 2476, ruled that on
the portion of Lot No. 2476 where the ancestral house used to stand, Teodoro did establish his prior physical
possession over the subject property resulting in his right to institute the ejectment suit against respondents.
Significantly, the RTC confirmed respondents’ physical possession of, and residency at, Lot No. 2476.
There would yet be another turn of events. The appellate court, albeit refusing to touch and rule on the issue
of ownership, declared that there lacked conclusive evidence of Teodoro Teodoro’s prior actual physical
possession over the subject property. Thus, the appellate court dismissed
Teodoro Teodoro’s complaint for lack of merit.
We are now asked for a final ruling.
We grant the petition. We reverse the decision of the Court of Appeals and restore the decision of the RTC
on the appeal reversing the MTC.
We affirm the finding of fact by the RTC which is decisive of the issue that has remained unresolved inspite
of a summary procedure and two appellate reviews of the forcible entry case filed by Teodoro Teodoro. The
RTC said:
Analyzing the facts of the case, the lower [court] concluded that the subject parcel is a part of the estate of
the late Genaro Teodoro and in the absence of an approved partition among the heirs, remains a community
property over which the legal heirs of Genaro Teodoro have the right to inherit. All therefore are entitled to
exercise the right of dominion including the right of possession.17 (Emphasis supplied).
The RTC’s comment that it "disagrees with the said ruling" only meant that "the lower court cannot dispose
with finality the issue of ownership" since such ownership issue is "inutile in an ejectment suit except to
throw light on the question of possession."18 And so the RTC ruled that Teodoro Teodoro should be restored
in the lawful possession of the disputed area of Lot No. 2476 in light of the finding of the MTC that the
subject lot still forms part of the estate of the late Genaro Teodoro. It is from this same fact that the MTC
reached the contrary conclusion that Teodoro Teodoro’s complaint should be dismissed because he has
"failed to prove his ownership."19
In the sense that Teodoro Teodoro has not proven exclusive ownership, the MTC was right.1âwphi1 But
exclusive ownership of Lot No. 2476 or a portion thereof is not in this case required of Teodoro Teodoro for
him to be entitled to possession. Co-ownership, the finding of both the MTC at first instance and by the RTC
on appeal, is sufficient. The pertinent provisions of the Civil Code state:
Art. 484. There is co-ownership whenever the ownership of an undivided thing or right belongs to different
persons.
Art. 1078. When there are two or more heirs, the whole estate of the decedent is, before its partition, owned
in common by such heirs, subject to the payment of debts of the deceased.
Certainly, and as found by the trial courts, the whole of Lot No. 2476 including the portion now litigated is,
owing to the fact that it has remained registered in the name of Genaro who is the common ancestor of both
parties herein, co-owned property. All, or both Teodoro Teodoro and respondents are entitled to exercise the
right of possession as co-owners.
Neither party can exclude the other from possession. Although the property remains unpartitioned, the
respondents in fact possess specific areas. Teodoro Teodoro can likewise point to a specific area, which is
that which was possessed by Petra. Teodoro Teodoro cannot be dispossessed of such area, not only by virtue
of Petra's bequeathal in his favor but also because of his own right of possession that comes from his co-
ownership of the property. As the RTC concluded, petitioners, as heirs substituting Teodoro
Teodoro in this suit, should be restored in the lawful possession of the disputed area.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 99805
is REVERSED and SET ASIDE and the Decision of the Regional Trial Court in Civil Case No. 634-M-06 is
REINSTATED. No pronouncement as to costs.
SO ORDERED.

464
 THIRD DIVISION
A.M. No. MTJ-05-1580 October 6, 2010
[Formerly OCA IPI No. 04-1608-MTJ]
LOURDES B. FERRER and PROSPERIDAD M. ARANDEZ, Complainants,
vs.
JUDGE ROMEO A. RABACA, Metropolitan Trial Court, Branch 25, Manila, Respondent.
DECISION
BERSAMIN, J.:
This administrative case charges Hon. Romeo A. Rabaca, then the Presiding Judge of Branch 25 of the
Metropolitan Trial Court of Manila (MeTC), with ignorance of the law, disregard of the law, dereliction of
duty, knowingly rendering an unjust interlocutory order, and violation of the Code of Conduct for
Government Officials.
The complainants were the President and the Executive Director of the plaintiff in Civil Case No. 176394-
CV of the MeTC, an ejectment suit entitled Young Women’s Christian Association, Inc. v. Conrado Cano.
After trial, Civil Case No. 176394-CV was decided on June 22, 2004 by respondent Judge, 1 who disposed as
follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the
defendant ordering the latter as follows:
(a) to vacate the premises located at Ground Floor, YMCA, 1144 Gen. Luna St., Ermita, Manila;
and surrender possession thereof to plaintiff;
(b) to pay plaintiff the sum of Php45,211.80 representing his arrears in rentals from February 2003
to July 2003 at Php7,535.30 a month plus the further sum of Php7,535.30 a month as reasonable
value for the continued use and occupation of the premises starting August 2003 until the same is
finally vacated and possession thereof is turn-over to plaintiff;
(c) to pay the plaintiff the sum of Php20,000 as attorney’s fees; and
(d) to pay the costs of suit.
SO ORDERED.
On July 12, 2004, the plaintiff’s counsel filed a motion for immediate execution, praying that a writ of
execution be issued "for the immediate execution of the aforesaid Judgment." The plaintiff cited Section 19,
Rule 70 of the Rules of Court as basis for its motion. 2
In his order dated July 14, 2004, however, respondent Judge denied the motion for immediate
execution,3 stating:
A Notice of Appeal dated July 9, 2004, having been seasonably filed by counsel for the defendant, let the
records of the above-captioned case be, as it is hereby ordered, elevated to the Regional Trial Court of
Manila for appropriate proceedings and disposition.
In view thereof, no more action shall be taken on the Motion for Execution dated July 8, 2004 filed by the
plaintiff thru counsel.
SO ORDERED.
According to the complainants, their counsel talked with respondent Judge about the matter. Allegedly,
respondent Judge told their counsel that "if you think the court is wrong, file a motion for reconsideration."
With that, the plaintiff filed a motion for reconsideration, which respondent Judge nonetheless denied in his
order dated July 28, 2004,4thuswise:
Considering that the Court has already given due course to the appeal of the defendant which was perfected
within the reglementary period, no more action will be taken on the Motion for Reconsideration dated July
19, 2004 filed by the plaintiff thru counsel.
The Branch Clerk of Court is hereby directed to immediately forward the records of this case to the
Regional Trial Court, Manila.
SO ORDERED.
465
The complainants averred that respondent Judge’s denial of their motions had rendered their victory inutile,
and had unfairly deprived the plaintiff of the possession of the premises. They further averred that
respondent Judge’s refusal to perform an act mandated by the Rules of Court had given undue advantage to
the defendant to the plaintiff’s damage and prejudice.
The Court required respondent Judge to comment on the administrative complaint against him.
In his comment dated September 16, 2004,5 respondent Judge denied the charges. He explained that he had
honestly thought that his court had lost jurisdiction over the case pursuant to the provision of Section 9, Rule
41 of the Rules of Court (which provides that "in appeals by notice of appeal, the court loses jurisdiction
over the case upon the perfection of the appeals filed in due time and the expiration of the time to appeal of
the other parties") once he had given due course to the defendant’s notice of appeal. He claimed that he had
issued the orders in good faith and with no malice after a fair and impartial evaluation of the facts,
applicable rules, and jurisprudence; and that if he had thereby committed lapses in the issuance of the orders,
his doing so should be considered as error of judgment on his part.
He lastly insisted that he did not know personally the parties in Civil Case No. 176394-CV, and had
absolutely no reason to give undue favor or advantage to the defendant; that the complainants did not submit
evidence to show that the orders had been issued for a consideration, material or otherwise, or that his
issuance of the orders had been motivated by ill-will or bad faith.
In their reply dated September 22, 2004,6 the complainants contended that respondent Judge exhibited his
ignorance of the law and procedure in relying on Section 9, Rule 41 of the Rules of Court which referred to
appeals from the Regional Trial Court; that Rule 40, which contained provisions on appeal from the
Municipal Trial Courts to the Regional Trial Courts, and which provided in its Section 4 that the perfection
of the appeal and the effect of such perfection should be governed by the provisions of Section 9 of Rule 41,
concerned appeals by notice of appeal in general; and that instead, the applicable rule should be Section 19,
Rule 70 of the Rules of Court.
The complainants pointed out that respondent Judge apparently did not know that appeal in forcible entry
and detainer cases was not perfected by the mere filing of a notice of appeal (as in ordinary actions) but by
filing of a notice of appeal and a sufficient supersedeas bond approved by the trial judge executed to the
plaintiff to pay the rents, damages and costs accruing down to the time of the judgment appealed from. They
asserted that respondent Judge’s invocation of good faith and error of judgment did not absolve him of
liability, because he had grossly neglected his duties mandated by law by failing and refusing to act on their
motion for immediate execution and motion for reconsideration and by giving due course to the appeal
despite no supersedeas bond having been filed and approved by the trial court.
In his memorandum dated January 13, 2005, 7 then Court Administrator Presbitero J. Velasco, Jr., now
Associate Justice of the Court, recommended that the administrative complaint against respondent Judge be
re-docketed as a regular administrative matter; and that respondent Judge be fined in the amount of
₱5,000.00 with warning that a repetition of the same or similar act would be dealt with more severely, based
on an evaluation of the charges, as follows:
EVALUATION: We agree with the complainants that respondent erred when he did not act on
complainants’ motion for immediate execution.
Section 19, Rule 70 of the 1997 Revised Rules on Civil Procedure provides:
"SEC. 19. If judgment is rendered against the defendant, execution shall issue immediately upon
motion, unless an appeal has been perfected and the defendant to stay execution files a supersedeas bond,
approved by the Municipal Trial Court and executed in favor of the plaintiff to pay the rents, damages, and
costs accruing down to the time of the judgment appealed from, and unless, during the pendency of the
appeal, he deposits with the appellate court the amount of rent due from time to time under the contract, if
any, as determined by the judgment of the Municipal Trial Court. XXXX XXXX XXXX."
It is clear from the foregoing that the perfection of an appeal by itself is not sufficient to stay the execution
of the judgment in an ejectment case. The losing party should likewise file a supersedeas bond executed in
favor of the plaintiff to answer for rents, damages and costs, and, if the judgment of the court requires it, he
should likewise deposit the amount of the rent before the appellate court from the time during the pendency
of the appeal. Otherwise, execution becomes ministerial and imperative. (Philippine Holding Corporation
vs. Valenzuela, 104 SCRA 401 as cited in Hualam Construction and Development Corporation vs. Court of
Appeals, 214 SCRA 612, 626).
In the case at bar, defendant seasonably filed his Notice of Appeal dated 9 July 2004 on 13 July 2004; he
however failed to file any supersedeas bond. Prior to the filing of such notice of appeal, more specifically
on 12 July 2004, complainants have already filed their Motion for Execution dated 8 July 2004. Instead of
acting on the Motion for Execution, respondent Judge Rabaca gave due course to the appeal in an Order
dated 14 July 2004 and directed his Branch Clerk of Court to elevate the records of the case to the Regional
Trial Court (RTC). The Branch Clerk of Court however failed to forward the records to the RTC. This fact is
clear from Judge Rabaca’s Order dated 28 July 2004 wherein he directed the Branch Clerk of Court to
forward the records of the case to the Manila Regional Trial Court immediately.
From the foregoing, it is clear that when the complainant moved for the immediate execution of Judge
Rabaca’s decision, the latter still had jurisdiction over the case. He therefore clearly erred when he refused
to act on the Motion for Execution. The relevant question that we should resolve however is whether such
error is an error of judgment or an error amounting to incompetence that calls for administrative discipline.
Judge Rabaca claims that he refused to act on the complainant’s Motion for execution because he honestly
thought that when he gave due course to the defendant’s appeal which was seasonably filed, and ordered the
elevation of the records to the appellate court, his court already lost jurisdiction over the case.. In making his
ruling, respondent asserts he relied on the provisions of Section 9, Rule 41 of the Rules of Court. This
provision reads as follows:
In appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the appeals
filed in due time and the expiration of the time to appeal of the other parties.
He likewise allegedly relied on the ruling of the Court in Administrative Matter OCA IPI No. 03-1513-MTJ:
Susana Joaquin Vda. De Agregado vs. Judge Thelma Bunyi-Medina, MeTJ wherein the Court said that-
Respondent Judge is correct in saying that she had lost jurisdiction to entertain the motion for execution
after the perfection of the appeal and after she issued an order to transmit the records of the case to the
appellate court for review.
The facts of the case against Judge Bunyi-Medina are however different from those prevailing in the instant
case. In the Medina case, the fifteen (15) day period within which to perfect the appeal had already lapsed
before the complainant therein moved for the execution of the execution judgment. Clearly therefore, appeal
had already been perfected. In the instant case, although the defendant had filed his appeal, the period to
appeal had not yet lapsed since the plaintiff still had his own period to appeal from the judgment and such
period had not yet lapsed. The provision relied upon by judge Rabaca, more specifically, Section 9, Rule 41
of the Rules of Court, clearly states that, "In appeals by notice of appeal, the court loses jurisdiction over the
case upon perfection of the appeals filed on due time and the expiration of the time to appeal of the other
parties." Moreover and more importantly, the herein complainants filed their Motion for Execution even
before the defendant had filed his Notice of Appeal. Such motion was therefore still well within the
jurisdiction of the lower court.
It is basic rule in ejectment cases that the execution of judgment in favor of the plaintiff is a matter of right
and mandatory. This has been the consistent ruling of the Court in a number of cases involving the same
issue posed before the respondent judge. Respondent Judge is expected to know this and his justification of
erroneous application of the law, although mitigating, could not exculpate him from liability.
We agree with and adopt the evaluation of the Court Administrator.
Indeed, respondent Judge should have granted the plaintiff’s motion for immediate execution considering
that the defendant did not file the sufficient supersedeas bond despite having appealed. Granting the
plaintiff’s motion for immediate execution became his ministerial duty upon the defendant’s failure to file
the sufficient supersedeas bond. Section 19, Rule 70, of the Rules of Court clearly imposes such duty, viz:
466
Section 19. Immediate execution of judgment; how to stay same. — If judgment is rendered against the
defendant, execution shall issue immediately upon motion, unless an appeal has been perfected and the
defendant to stay execution files a sufficient supersedeas bond, approved by the Municipal Trial Court and
executed in favor of the plaintiff to pay the rents, damages, and costs accruing down to the time of the
judgment appealed from, and unless, during the pendency of the appeal, he deposits with the appellate court
the amount of rent due from time to time under the contract, if any, as determined by the judgment of the
Municipal Trial Court. In the absence of a contract, he shall deposit with the Regional Trial Court the
reasonable value of the use and occupation of the premises for the preceding month or period at the rate
determined by the judgment of the lower court on or before the tenth day of each succeeding month or
period. The supersedeas bond shall be transmitted by the Municipal Trial Court, with the other papers, to the
clerk of the Regional Trial Court to which the action is appealed.
xxx
Respondent Judge’s excuse, that he had lost jurisdiction over the case by virtue of the defendant’s appeal,
was unacceptable in light of the clear and explicit text of the aforequoted rule. To begin with, the perfection
of the appeal by the defendant did not forbid the favorable action on the plaintiff’s motion for immediate
execution. The execution of the decision could not be stayed by the mere taking of the appeal. Only the
filing of the sufficient supersedeas bond and the deposit with the appellate court of the amount of rent due
from time to time, coupled with the perfection of the appeal, could stay the execution. Secondly, he could
not also credibly justify his omission to act according to the provision by claiming good faith or honest
belief, or by asserting lack of malice or bad faith.1avvphil A rule as clear and explicit as Section 19 could
not be misread or misapplied, but should be implemented without evasion or hesitation. To us, good faith, or
honest belief, or lack of malice, or lack of bad faith justifies a non-compliance only when there is an as-yet
unsettled doubt on the meaning or applicability of a rule or legal provision. It was not so herein. And,
thirdly, given that his court, being vested with original exclusive jurisdiction over cases similar to Civil Case
No. 176394-CV, had been assigned many such cases, he was not a trial judge bereft of the pertinent prior
experience to act on the issue of immediate execution, a fact that further exposed the abject inanity of his
excuses.
We agree with the complainants’ insistence, therefore, that respondent Judge’s omission to apply Section 19
was inexcusable. He had ignored the urging to follow the clear and explicit provision of the rule made in the
plaintiff’s motion for immediate execution. Had he any genuine doubt about his authority to grant the
motion for immediate execution, as he would have us believe, he could have easily and correctly resolved
the doubt by a resort to the Rules of Court, which he well knew was the repository of the guidelines he was
seeking for his judicial action. Neither was it relevant that he did not know any of the parties, or that he did
not corruptly favor the defendant by his omission. His mere failure to perform a duty enjoined by the Rules
of Court sufficed to render him administratively accountable.
This case is an opportune occasion to remind judges of the first level courts to adhere always to the mandate
under Section 19, Rule 70, of the Rules of Court to issue writs of execution upon motion of the plaintiffs in
actions for forcible entry or unlawful detainer when the defendant has appealed but has not filed a sufficient
supersedeas bond. The summary nature of the special civil action under Rule 70 and the purpose underlying
the mandate for an immediate execution, which is to prevent the plaintiffs from being further deprived of
their rightful possession, should always be borne in mind.
The recommended penalty of ₱5,000.00 with warning that a repetition of the same or similar act would be
dealt with more severely is also correct. The Court Administrator rationalized the recommendation of the
penalty thuswise:
Under A.M. No. 01-8-10-SC, ‘Gross Ignorance of the Law or Procedure’ is classified as serious offense for
which the imposable penalty ranges from a fine to dismissal. However, we find respondent’s acts not
ingrained with malice or bad faith. It is a matter of public policy that in the absence of fraud, dishonesty or
corrupt motive, the acts of a judge in his judicial capacity are not subject to disciplinary action even though
such acts are erroneous. In Domingo vs. Judge Pagayatan, A.M. No. RTJ-03-1751, 10 June 2003, the
penalty of fine in the amount of five thousand pesos was deemed sufficient where it was held that
respondent’s lack of malice or bad faith frees him from administrative liability but not for gross ignorance of
the law.
We concur with the rationalization of the Court Administrator. Verily, even if respondent Judge’s omission
would have easily amounted to gross
ignorance of the law and procedure, a serious offense under Section 8, 8 Rule 140, of the Rules of Court, as
amended, the fact that the complainants did not establish that malice or bad faith impelled his omission to
act, or that fraud, dishonesty, or a corrupt motive attended his omission to act demands a downgrading of the
liability. In the absence of any showing that he had been held guilty of any other administrative
offense,9 and without our attention being called to other circumstances that might demonstrate respondent
Judge’s dark motives for his inaction, we should find and consider the recommended penalty of ₱5,000.00
with warning that a repetition of the same or similar act would be dealt with more severely to be
commensurate to the offense.10
WHEREFORE, we find respondent JUDGE ROMEO A. RABACA, Presiding Judge of Branch 25,
Metropolitan Trial Court, in Manila guilty of ignorance of the law and procedure, and, accordingly, impose
upon him a fine of ₱5,000.00 with warning that a repetition of the same or similar act would be dealt with
more severely.
SO ORDERED.

467
 SECOND DIVISION
G.R. No. 170916 April 27, 2007
CGR CORPORATION herein represented by its President ALBERTO RAMOS, III, HERMAN M.
BENEDICTO and ALBERTO R. BENEDICTO, Petitioners,
vs.
ERNESTO L. TREYES, JR., Respondent
DECISION
CARPIO MORALES, J.:
Assailed via petition for review are issuances of the Regional Trial Court (RTC), Branch 43, Bacolod City,
in Civil Case No. 04-12284, to wit: Order1 dated August 26, 2005 which dismissed petitioners’ complaint
for damages on the ground of prematurity, and Order2 dated January 2, 2006 which denied petitioners’
motion for reconsideration.
In issue is one of law – whether a complainant in a forcible entry case can file an independent action for
damages arising after the act of dispossession had occurred.
CGR Corporation, Herman M. Benedicto and Alberto R. Benedicto (petitioners) claimed to have occupied
37.3033 hectares of public land in Barangay Bulanon, Sagay City, Negros Occidental even before the
notarized separate Fishpond Lease Agreement Nos. 5674, 3 56944 and 56955 in their respective favor were
approved in October 2000 by the Secretary of Agriculture for a period of twenty-five (25) years or until
December 31, 2024.
On November 18, 2000, Ernesto L. Treyes, Jr. (respondent) allegedly forcibly and unlawfully entered the
leased properties and once inside barricaded the entrance to the fishponds, set up a barbed wire fence along
the road going to petitioners’ fishponds, and harvested several tons of milkfish, fry and fingerlings owned by
petitioners.
On November 22, 2000, petitioners promptly filed with the Municipal Trial Court (MTC) in Sagay
City separate complaints for Forcible Entry With Temporary Restraining Order And/Or Preliminary
Injunction And Damages, docketed as Civil Case Nos. 1331,6 13327 and 1333,8 against Ernesto M. Treyes,
Sr. and respondent.
In a separate move, petitioners filed in March 2004 with the Bacolod RTC a complaint for damages against
respondent, docketed as Civil Case No, 04-12284, alleging, inter alia,
xxxx
V can independently institute and maintain an action for damages which they claim arose from incidents
That prior to the issuance of the fishpond lease agreement in favor of the plaintiffs, they had
already been in open and continuous possession of the same parcel of land;
VI
As lessee and in possession of the above[-]described fishpond, plaintiffs have continuously
occupied, cultivated and developed the said fishpond and since then, had been regularly harvesting
milkfish, shrimps, mud crabs and other produce of the fishponds;1a\^/phi1.net
VII
That the yearly income of the fishpond of the plaintiff corporation is at least ₱300,000.00 more or
less, while the yearly income of the fishpond of plaintiff Herman Benedicto, Sr. is at least
₱100,000.00 more or less, and the yearly income of the fishpond of plaintiff Alberto Benedicto
is at least ₱100,000.00 more or less;
VIII
That sometime last November 18, 2000 or thereabout, defendant Ernesto L. Treyes, Jr. and his
armed men and with the help of the blue guards from the Negros Veterans Security Agency
forcibly and unlawfully entered the fishponds of the plaintiffs and once inside barricaded the
entrance of the fishpond and set up barb wire fence along the road going to plaintiffs fishpond
and harvested the milkfish and carted away several tons of milkfish owned by the plaintiffs;
IX
468
That on succeeding days, defendant’s men continued their forage on the fishponds of the plaintiffs
by carting and taking away the remaining full grown milkfish, fry and fingerlings and other marine
products in the fishponds. NOT ONLY THAT, even the chapel built by plaintiff CGR Corporation
was ransacked and destroyed and the materials taken away by defendant’s men. Religious icons
were also stolen and as an extreme act of sacrilege, even decapitated the heads of some of these
icons;
xxxx
XIII
That the unlawful, forcible and illegal intrusion/destruction of defendant Ernesto Treyes, Jr. and
his men on the fishpond leased and possessed by the plaintiffs is without any authority of law and
in violation of Article 539 of the New Civil Code which states:
"Art. 539. Every possessor has a right to be respected in his possession; and should he be disturbed therein
he shall be protected in or restored to said possession by the means established by the laws and rules of the
Court."9(Underscoring supplied) and praying for the following reliefs:
1) Ordering the defendant to pay plaintiff CGR Corporation the sum of at least ₱900,000.00 and to
plaintiffs Herman and Alberto Benedicto, the sum of at least ₱300,000.00 each by way
of actual damages and such other amounts as proved during the trial;
2) Ordering the defendant to pay the plaintiffs the sum of ₱100,000.00 each as moral damages;
3) Ordering the defendant to pay the plaintiffs the sum of ₱100,000.00 each
as exemplary damages;
4) Ordering the defendant to pay the plaintiffs the sum of ₱200,000.00 as attorney’s fees, and to
reimburse plaintiffs with all such sums paid to their counsel by way of appearance
fees.10 (Underscoring supplied)
Respondent filed a Motion to Dismiss11 petitioners’ complaint for damages on three grounds – litis
pendentia, res judicata and forum shopping.
By the assailed Order12 of August 26, 2005, Branch 43 of the Bacolod RTC dismissed petitioners’ complaint
on the ground of prematurity, it holding that a complaint for damages may only be maintained "after a final
determination on the forcible entry cases has been made."
Hence, the present petition for review.
The only issue is whether, during the pendency of their separate complaints for forcible entry, petitioners
occurring after the dispossession by respondent of the premises.
Petitioners meet the issue in the affirmative. Respondents assert otherwise.
The petition is impressed with merit.
Section 17, Rule 70 of the Rules of Court provides:
SEC. 17. Judgment. – If after trial the court finds that the allegations of the complaint are true, it shall render
judgment in favor of the plaintiff for the restitution of the premises, the sum justly due as arrears of rent or
as reasonable compensation for the use and occupation of the premises, attorney’s fees and costs. If it finds
that said allegations are not true, it shall render judgment for the defendant to recover his costs. If a
counterclaim is established, the court shall render judgment for the sum found in arrears from either party
and award costs as justice requires. (Emphasis supplied)
The recoverable damages in forcible entry and detainer cases thus refer to "rents" or "the reasonable
compensation for the use and occupation of the premises" or "fair rental value of the property" and
attorney’s fees and costs.13
The 2006 case of Dumo v. Espinas14 reiterates the long-established rule that the only form of damages that
may be recovered in an action for forcible entry is the fair rental value or the reasonable compensation for
the use and occupation of the property:
Lastly, we agree with the CA and the RTC that there is no basis for the MTC to award actual, moral, and
exemplary damages in view of the settled rule that in ejectment cases, the only damage that can be recovered
is the fair rental value or the reasonable compensation for the use and occupation of the property.
Considering that the only issue raised in ejectment is that of rightful possession, damages which could be
recovered are those which the plaintiff could have sustained as a mere possessor, or those caused by the loss
of the use and occupation of the property, and not the damages which he may have suffered but which have
no direct relation to his loss of material possession. x x x15 (Emphasis, underscoring and italics supplied;
citations omitted)
Other damages must thus be claimed in an ordinary action. 16
In asserting the negative of the issue, respondent cites the 1999 case of Progressive Development
Corporation, Inc. v. Court of Appeals.17 In this case, Progressive Development Corporation, Inc.
(Progressive), as lessor, repossessed the leased premises from the lessee allegedly pursuant to their contract
of lease whereby it was authorized to do so if the lessee failed to pay monthly rentals. The lessee filed a case
for forcible entry with damages against Progressive before the Metropolitan Trial Court (MeTC) of Quezon
City. During the pendency of the case, the lessee filed an action for damages before the RTC, drawing
Progressive to file a motion to dismiss based on litis pendentia. The RTC denied the motion.
On appeal by Progressive, the Court of Appeals sustained the RTC order denying the motion to dismiss.
Progressive brought the case to this Court. Citing Section 1, Rule 70 of the Rules of Court, this Court
reversed the lower courts’ ruling, it holding that "all cases for forcible entry or unlawful detainer shall be
filed before the Municipal Trial Court which shall include not only the plea for restoration of possession but
also all claims for damages and costs therefrom." In other words, this Court held that "no claim for damages
arising out of forcible entry or unlawful detainer may be filed separately and independently of the claim for
restoration of possession."18 (Underscoring supplied)
In thus ruling, this Court in Progressive made a comparative study of the therein two complaints, thus:
A comparative study of the two (2) complaints filed by private respondent against petitioner before the two
(2) trial courts shows that not only are the elements of res adjudicata present, at least insofar as the claim for
actual and compensatory damages is concerned, but also that the claim for damages–moral and exemplary in
addition to actual and compensatory–constitutes splitting a single cause of action. Since this runs counter to
the rule against multiplicity of suits, the dismissal of the second action becomes imperative.
The complaint for forcible entry contains the following pertinent allegations –
2.01 On 02 January 1989, plaintiff entered into a contract of lease with defendant PDC over a property
designated as Ground Floor, Seafood Market (hereinafter "Subject Premises") situated at the corner of
EDSA corner MacArthur Street, Araneta Center, Cubao, Quezon City, for a period of ten (10) years from 02
January 1989 to 30 April 1998.
2.02 Immediately after having acquired actual physical possession of the Subject Premises, plaintiff
established and now operates thereon the now famous Seafood Market Restaurant. Since then, plaintiff had
been in actual, continuous, and peaceful physical possession of the Subject Premises until 31 October 1992.
xxxx
3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the peaceful occupation and enjoyment
of the Subject Premises to the exclusion of all others, including defendants herein.
3.03 Defendants’ resort to strong arms tactics to forcibly wrest possession of the Subject Premises from
plaintiff and maintain possession thereof through the use of force, threat, strategy and intimidation by the
use of superior number of men and arms amounts to the taking of the law into their own hands.
3.04 Thus, defendants’ act of unlawfully evicting out plaintiff from the Subject Premises it is leasing from
defendant PDC and depriving it of possession thereof through the use of force, threat, strategy and
intimidation should be condemned and declared illegal for being contrary to public order and policy.
3.05 Consequently, defendants should be enjoined from continuing with their illegal acts and be ordered to
vacate the Subject Premises and restore possession thereof, together with its contents to plaintiff.
xxxx
469
4.07 Considering that defendants’ act of forcibly grabbing possession of the Subject Premises from plaintiff
is illegal and null and void, defendant should be adjudged liable to plaintiff for all the aforedescribed
damages which plaintiff incurred as a result thereof.
The amended complaint for damages filed by private respondent alleges basically the same factual
circumstances and issues as bases for the relief prayed for, to wit:
4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract of Lease for a period of ten years
or from January 2, 1989 up to April 30, 1998 over a property designated as Ground Floor, Seafood Market
(hereinafter referred to as Subject Premises) situated at the corner of EDSA corner McArthur Street, Araneta
Center, Cubao, Quezon City. A copy of the lease contract is attached hereto as Annex "A."
5. Immediately thereafter, plaintiff took over actual physical possession of Subject Premises, and established
thereon the now famous "Seafood Market Restaurant."
xxxx
7. On October 31, 1992 at around 8:30 p.m., defendant PDC, without the benefit of any writ of possession or
any lawful court order and with the aid of approximately forty (40) armed security guards and policemen
under the supervision of defendant Tejam, forcibly entered the subject premises through force, intimidation,
threats and stealth and relying on brute force and in a thunderboltish manner and against plaintiff’s will,
unceremoniously drew away all of plaintiffs men out of the subject premises, thereby depriving herein
plaintiff of its actual, physical and natural possession of the subject premises. The illegal high-handed
manner of gestapo like take-over by defendants of subject premises is more particularly described as
follows: x x x x
8. To date, defendants continue to illegally possess and hold the Subject Premises, including all the multi-
million improvements, fixtures and equipment therein owned by plaintiff, all to the damage and prejudice of
plaintiff. The actuations of defendants constitute an unlawful appropriation, seizure and taking of property
against the will and consent of plaintiff. Worse, defendants are threatening to sell at public auction and
without the consent, of plaintiff and without lawful authority, the multi-million fixtures and equipment of
plaintiff and at prices way below the market value thereof. Plaintiff hereby attaches as Annex "B" the letter
from defendants dated August 6, 1993 addressed to plaintiff, informing the latter that the former intends to
sell at an auction on August 19, 1993 at 2:00 p.m. properties of the plaintiff presently in defendants’
possession.
xxxx
12. Defendant’s unlawful takeover of the premises constitutes a violation of its obligation under Art. 1654 of
the New Civil Code requiring the lessor to maintain the lessee in peaceful and adequate enjoyment of the
lease for the entire duration of the contract. Hence, plaintiff has filed the present suit for the recovery of
damages under Art. 1659 of the New Civil Code x x x x19 (Emphasis in the original; underscoring supplied)
Analyzing the two complaints, this Court, still in Progressive, observed:
Restated in its bare essentials, the forcible entry case has one cause of action, namely, the alleged unlawful
entry by petitioner into the leased premises out of which three (3) reliefs (denominated by private
respondent as its causes of action) arose: (a) the restoration by the lessor (petitioner herein) of the possession
of the leased premises to the lessee, (b) the claim for actual damages due to the losses suffered by private
respondent such as the deterioration of perishable foodstuffs stored inside the premises and the deprivation
of the use of the premises causing loss of expected profits; and, (c) the claim for attorney’s fees and costs of
suit.
On the other hand, the complaint for damages prays for a monetary award consisting of (a) moral damages
of P500,000.00 and exemplary damages of another P500,000.00; (b) actual damages of P20,000.00 and
compensatory damages of P1,000,000.00 representing unrealized profits; and, (c) P200,000.00 for attorney’s
fees and costs, all based on the alleged forcible takeover of the leased premises by petitioner. Since actual
and compensatory damages were already prayed for in the forcible entry case before the MeTC, it is obvious
that this cannot be relitigated in the damage suit before the RTC by reason of res adjudicata.
The other claims for moral and exemplary damages cannot also succeed considering that these sprung from
the main incident being heard before the MeTC. x x x20 (Italics in the original; Emphasis and underscoring
supplied)
It bears noting, however, that as reflected in the earlier-quoted allegations in the complaint for damages of
herein petitioners, their claim for damages have no direct relation to their loss of possession of the premises.
It had to do with respondent’s alleged harvesting and carting away several tons of milkfish and other marine
products in their fishponds, ransacking and destroying of a chapel built by petitioner CGR Corporation,
and stealing religious icons and even decapitating the heads of some of them, after the act of dispossession
had occurred.
Surely, one of the elements of litis pendentia - that the identity between the pending actions, with respect to
the parties, rights asserted and reliefs prayed for, is such that any judgment rendered on one action will,
regardless of which is successful, amount to res judicata in the action under consideration - is not present,
hence, it may not be invoked to dismiss petitioners’ complaint for damages. 21
Res judicata may not apply because the court in a forcible entry case has no jurisdiction over claims for
damages other than the use and occupation of the premises and attorney’s fees.22
Neither may forum-shopping justify a dismissal of the complaint for damages, the elements of litis
pendentia not being present, or where a final judgment in the forcible entry case will not amount to res
judicata in the former.23
Petitioners’ filing of an independent action for damages other than those sustained as a result of their
dispossession or those caused by the loss of their use and occupation of their properties could not thus be
considered as splitting of a cause of action.
WHEREFORE, the Orders dated August 26, 2005 and January 2, 2006 issued by the Regional Trial Court,
Branch 43, Bacolod City, in Civil Case No. 04-12284 are REVERSED and SET ASIDE.
The Regional Trial Court, Branch 43, Bacolod City, is directed to REINSTATE Civil Case No. 04-12284 to
its docket and to conduct proceedings thereon with dispatch.
SO ORDERED.

470

THIRD DIVISION
G.R. No. 202354, September 24, 2014
AMADA C. ZACARIAS, Petitioner, v. VICTORIA ANACAY, EDNA ANACAY, CYNTHIA
ANACAY-GUISIC, ANGELITO ANACAY, JERMIL ISRAEL, JIMMY ROY ISRAEL AND ALL
OTHER PERSONS CLAIMING AUTHORITY UNDER THEM, Respondents.
DECISION
VILLARAMA, JR., J.:
Assailed in this petition for review under Rule 45 is the Decision1 dated June 20, 2012 of the Court of
Appeals (CA) in CA-G.R. SP No. 123195 which reversed the Decision2 dated August 22, 2011 of the
Regional Trial Court (RTC) of Cavite, Branch 18, Tagaytay City and affirmed the Decision 3 dated October
8, 2010 of the Municipal Circuit Trial Court (MCTC) of Amadeo-Silang, Cavite, Branch 17 in Civil Case
No. 862.
The present controversy stemmed from a complaint4 for Ejectment with Damages/Unlawful Detainer filed
on December 24, 2008 by petitioner Amada Zacarias thru her son and attorney-in-fact, Cesar C. Zacarias,
against the above-named respondents, Victoria Anacay and members of her household. Said respondents
are the occupants of a parcel of land with an area of seven hundred sixty-nine (769) square meters, situated
at Barangay Lalaan 1st, Silang, Cavite and covered by Tax Declaration No. 18-026-01182 in the name of
petitioner and issued by Municipal Assessor Reynaldo L. Bayot on August 31, 2007.
The parties were ordered to proceed to the Philippine Mediation Center pursuant to Section 2(a), Rule 18 of
the 1997 Rules of Civil Procedure, as amended. Mediation was unsuccessful and thus the case was returned
to the court.5cralawlawlibrary
After due proceedings, the MCTC rendered a Decision dismissing the complaint, the dispositive portion of
which reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, judgment is, hereby, rendered in favor of defendants Victoria
Anacay, Edna Anacay, Santiago Amerna, Raymond and Cynthia Guisic, Angelito Anacay and Myrlinda
Yalo, and all persons acting under them, and against plaintiff Amada C. Zacarias, represented by her
attorney-in-fact, Cesar C. Zacarias, the instant Complaint for ejectment with damages, Unlawful Detainer is,
hereby, DISMISSED.
SO ORDERED.6
The MCTC held that the allegations of the complaint failed to state the essential elements of an action for
unlawful detainer as the claim that petitioner had permitted or tolerated respondents’ occupation of the
subject property was unsubstantiated. It noted that the averments in the demand letter sent by petitioner’s
counsel that respondents entered the property through stealth and strategy, and in petitioner’s own
“Sinumpaang Salaysay”, are more consistent with an action for forcible entry which should have been filed
within one year from the discovery of the alleged entry. Since petitioner was deprived of the physical
possession of her property through illegal means and the complaint was filed after the lapse of one year from
her discovery thereof, the MCTC ruled that it has no jurisdiction over the case.
471
On appeal to the RTC, petitioner argued that unlawful detainer was the proper remedy considering that she
merely tolerated respondents’ stay in the premises after demand to vacate was made upon them, and they
had in fact entered into an agreement and she was only forced to take legal action when respondents reneged
on their promise to vacate the property after the lapse of the period agreed upon.
In reversing the MCTC, the RTC pointed out that in her complaint, petitioner did not state that respondents
entered her property through stealth and strategy but that petitioner was in lawful possession and acceded to
the request of respondents to stay in the premises until May 2008 but respondents’ reneged on their promise
to vacate the property by that time. It held that the suit is one for unlawful detainer because the respondents
unlawfully withheld the property from petitioner after she allowed them to stay there for one year.
With the subsequent oral agreement between the parties, the RTC ruled that respondents’ occupation of the
property without petitioner’s consent can be converted to a contract, such agreement not being prohibited by
law nor contrary to morals or good customs. Having satisfied the requisites for an unlawful detainer action,
the RTC found that petitioner’s complaint was filed within the prescribed one-year period counted from the
time the final demand to vacate was received by the respondents on July 24, 2008.
The fallo of the Decision of the RTC states:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the Decision of the Municipal Circuit Trial Court of Silang-Amadeo
dated October 8, 2010 is hereby REVERSED AND SET ASIDE and a new one is entered ordering the
defendants and all claiming under their rights to: (1) vacate the subject property and surrender possession
and control over the same to the plaintiff; Pay the sum of Two Thousand (P2,000.00) Pesos each as rentals
or compensation for the use thereof starting from July 2008 until the same is paid in full, with interests
thereon at twelve (12%) percent per annum; (2) pay the sum of Fifty Thousand (P50,000.00) Pesos, as
moral damages; (3) pay the sum of Ten Thousand (P10,000.00) Pesos, as exemplary damages; and (4) pay
the sum of Twenty Thousand (P20,000.00) Pesos, as attorney’s fees.
SO ORDERED.7
With the failure of respondents to file a notice of appeal within the reglementary period, the above decision
became final and executory.8cralawlawlibrary
On November 28, 2011, petitioner filed a motion for issuance of a writ of execution. At the hearing held on
January 4, 2012, respondents were given a period of ten days within which to file their comment. At the
next scheduled hearing on February 6, 2012, respondents’ counsel appeared and submitted a Formal Entry
of Appearance with Manifestation informing the court that on the same day they had filed a petition
for certiorari with prayer for injunction before the CA, copies of which were served to petitioner thru her
counsel and to the RTC. Nonetheless, in its Order dated February 6, 2012, the RTC stated that said
manifestation was “tantamount to [a] comment to the pending motion” and thus gave petitioner’s counsel a
period of ten (10) days within which to file her Reply and thereafter the incident will be submitted for
resolution.9cralawlawlibrary
On June 20, 2012, the CA rendered its Decision, the dispositive portion of which
reads:chanRoblesvirtualLawlibrary
WHEREFORE, the petition is GRANTED. Accordingly, the assailed Order dated August 22, 2011
rendered by the Regional Trial Court of Cavite, 4th Judicial Region, Branch 18, Tagaytay City
is REVERSED and SET ASIDE. The Decision dated October 8, 2010 rendered by the Municipal Circuit
Trial Court, Branch 17 is AFFIRMED.

SO ORDERED.10
The CA held that the MCTC clearly had no jurisdiction over the case as the complaint did not satisfy the
jurisdictional requirement of a valid cause for unlawful detainer. Since the prescriptive period for filing an
action for forcible entry has lapsed, petitioner could not convert her action into one for unlawful detainer,
reckoning the one-year period to file her action from the time of her demand for respondents to vacate the
property.
Further, the CA said that while petitioner has shown that she is the lawful possessor of the subject property,
she availed of the wrong remedy to recover possession but nevertheless may still file an accion
publiciana or accion reivindicatoria with the proper regional trial court.
Petitioner contends that the CA erred and committed grave abuse of discretion amounting to lack and/or
excess of jurisdiction in nullifying the judgment of the RTC which has long become final and executory.
She argues that the suspension of the strict adherence to procedural rules cannot be justified by unsupported
allegations of the respondents as to supposed non-receipt of documents concerning this case.
On their part, respondents maintain that they were not aware of the proceedings before the RTC and were
not furnished a copy of the said court’s adverse decision. They also stress that resort to certiorariwas proper
and the suspension of procedural rules was justified by compelling circumstances such as the imminent
destruction of the only property possessed by respondents who are indigent, respondents’ lack of awareness
of unfavorable judgment rendered on appeal by the RTC, substantive merits of the case insofar as the
jurisdictional requirements in a suit for unlawful detainer, lack of showing that resort to certiorari petition
was frivolous and dilatory, and there being no prejudice caused to the other party.
After a thorough review of the records and the parties’ submissions, we find neither reversible error nor
grave abuse of discretion committed by the CA.
The invariable rule is that what determines the nature of the action, as well as the court which has
jurisdiction over the case, are the allegations in the complaint.11 In ejectment cases, the complaint should
embody such statement of facts as to bring the party clearly within the class of cases for which Section 1 12 of
Rule 70 provides a summary remedy, and must show enough on its face to give the court jurisdiction
without resort to parol evidence.13 Such remedy is either forcible entry or unlawful detainer. In forcible
entry, the plaintiff is deprived of physical possession of his land or building by means of force, intimidation,
threat, strategy or stealth. In illegal detainer, the defendant unlawfully withholds possession after the
expiration or termination of his right thereto under any contract, express or implied. 14cralawlawlibrary
The MCTC and CA both ruled that the allegations in petitioner’s complaint make out a case for forcible
entry but not for unlawful detainer.
15
In Cabrera v. Getaruela, the Court held that a complaint sufficiently alleges a cause of action for unlawful
detainer if it recites the following:chanRoblesvirtualLawlibrary
(1) initially, possession of property by the defendant was by contract with or by tolerance of the plaintiff;
(2) eventually, such possession became illegal upon notice by plaintiff to defendant of the termination of the
latter’s right of possession;
(3) thereafter, the defendant remained in possession of the property and deprived the plaintiff of the
472
enjoyment thereof; and
(4) within one year from the last demand on defendant to vacate the property, the plaintiff instituted the
complaint for ejectment.16cralawlawlibrary
In this case, the Complaint alleged the following:chanroblesvirtuallawlibrary
3. Plaintiff is the owner of that parcel of land situated at Barangay Lalaan 1 st , Silang, Cavite with an area of
SEVEN HUNDRED SIXTY NINE (769) SQUARE METERS, and covered by Tax Declaration No. 18-026-
01182 issued by the Municipal Assessor of Silang, Cavite. Copy of said tax declaration is hereto attached
as Annex “B”;
4. Plaintiff was in lawful possession and control over the subject property. She had it planted to Bananas
and other fruit bearing trees. However, sometime in May, 2007, she discovered that the defendants have
entered the subject property and occupied the same;
5. Consequently, Plaintiff demanded that they leave the premises. The defendants requested for time to
leave and she acceded to said request. The defendants committed to vacate the subject property by the end
of May, 2008;
6. Inspite of several repeated demands, defendants unjustifiably refused to vacate the subject premises
prompting the Plaintiff to seek the assistance of a lawyer who wrote them a FORMAL and FINAL
DEMAND to vacate the premises and to pay reasonable compensation for their illegal use and occupancy of
the subject property. A copy of the DEMAND LETTER is hereto attached as Annex “C”;
7. Plaintiff also referred this matter to the Lupon Tagapamayapa of Barangay Lalaan 1st for possible
conciliation but to no avail as the defendants still refused to vacate the subject property. Thus, the said
Barangay issued a CERTIFICATION TO FILE ACTION, as evidenced by a copy thereto attached as Annex
“D”;
x x x x17chanrobleslaw
The above complaint failed to allege a cause of action for unlawful detainer as it does not describe
possession by the respondents being initially legal or tolerated by the petitioner and which became illegal
upon termination by the petitioner of such lawful possession. Petitioner’s insistence that she actually
tolerated respondents’ continued occupation after her discovery of their entry into the subject premises is
incorrect. As she had averred, she discovered respondents’ occupation in May 2007. Such possession could
not have been legal from the start as it was without her knowledge or consent, much less was it based on any
contract, express or implied. We stress that the possession of the defendant in unlawful detainer is originally
legal but became illegal due to the expiration or termination of the right to possess. 18cralawlawlibrary
In Valdez v. Court of Appeals,19 the Court ruled that where the complaint did not satisfy the jurisdictional
requirement of a valid cause for unlawful detainer, the municipal trial court had no jurisdiction over the
case. Thus:chanRoblesvirtualLawlibrary
To justify an action for unlawful detainer, it is essential that the plaintiff’s supposed acts of tolerance
must have been present right from the start of the possession which is later sought to be recovered.
Otherwise, if the possession was unlawful from the start, an action for unlawful detainer would be an
improper remedy. As explained in Sarona v. Villegas:chanroblesvirtuallawlibrary
But even where possession preceding the suit is by tolerance of the owner, still, distinction should be made.
If right at the incipiency defendant’s possession was with plaintiff’s tolerance, we do not doubt that the latter
may require him to vacate the premises and sue before the inferior court under Section 1 of Rule 70, within
one year from the date of the demand to vacate.
xxxx
A close assessment of the law and the concept of the word “tolerance” confirms our view heretofore
expressed that such tolerance must be present right from the start of possession sought to be recovered, to
categorize a cause of action as one of unlawful detainer - not of forcible entry. Indeed, to hold otherwise
would espouse a dangerous doctrine. And for two reasons: First. Forcible entry into the land is an open
challenge to the right of the possessor. Violation of that right authorizes the speedy redress – in the inferior
court - provided for in the rules. If one year from the forcible entry is allowed to lapse before suit is filed,
then the remedy ceases to be speedy; and the possessor is deemed to have waived his right to seek relief in
the inferior court. Second, if a forcible entry action in the inferior court is allowed after the lapse of a
number of years, then the result may well be that no action of forcible entry can really prescribe. No matter
how long such defendant is in physical possession, plaintiff will merely make a demand, bring suit in the
inferior court – upon a plea of tolerance to prevent prescription to set in - and summarily throw him out of
the land. Such a conclusion is unreasonable. Especially if we bear in mind the postulates that proceedings
of forcible entry and unlawful detainer are summary in nature, and that the one year time-bar to suit is but in
pursuance of the summary nature of the action. (Italics and underscoring supplied)
It is the nature of defendant’s entry into the land which determines the cause of action, whether it is forcible
entry or unlawful detainer. If the entry is illegal, then the action which may be filed against the intruder is
forcible entry. If, however, the entry is legal but the possession thereafter becomes illegal, the case is
unlawful detainer.
Indeed, to vest the court jurisdiction to effect the ejectment of an occupant, it is necessary that the complaint
should embody such a statement of facts as brings the party clearly within the class of cases for which the
statutes provide a remedy, as these proceedings are summary in nature. The complaint must show enough
on its face the court jurisdiction without resort to parol testimony.
The jurisdictional facts must appear on the face of the complaint. When the complaint fails to aver facts
constitutive of forcible entry or unlawful detainer, as where it does not state how entry was affected or how
and when dispossession started, the remedy should either be an accion publiciana or an accion
reivindicatoria in the proper regional trial court. Thus, in Go, Jr. v. Court of Appeals, petitioners filed an
unlawful detainer case against respondent alleging that they were the owners of the parcel of land through
intestate succession which was occupied by respondent by mere tolerance of petitioners as well as their
deceased mother. Resolving the issue on whether or not petitioners’ case for unlawful detainer will prosper,
the court ruled:chanroblesvirtuallawlibrary
Petitioners alleged in their complaint that they inherited the property registered under TCT No. C-32110
from their parents; that possession thereof by private respondent was by tolerance of their mother, and after
her death, by their own tolerance; and that they had served written demand on December, 1994, but that
private respondent refused to vacate the property. x x x
It is settled that one whose stay is merely tolerated becomes a deforciant illegally occupying the land the
moment he is required to leave. . The appellate court, in full agreement with the MTC made the conclusion
that the alleged tolerance by their mother and after her death, by them, was unsubstantiated. x x x
The evidence revealed that the possession of defendant was illegal at the inception and not merely
tolerated as alleged in the complaint, considering that defendant started to occupy the subject lot and
473
then built a house thereon without the permission and consent of petitioners and before them, their
mother. xxx Clearly, defendant’s entry into the land was effected clandestinely, without the
knowledge of the owners, consequently, it is categorized as possession by stealth which is forcible
entry. As explained in Sarona vs. Villegas, cited in Muñoz vs. Court of Appeals [224 SCRA 216 (1992)]
tolerance must be present right from the start of possession sought to be recovered, to categorize a cause of
action as one of unlawful detainer not of forcible entry x x x.
xxxx
In the instant case, the allegations in the complaint do not contain any averment of fact that would
substantiate petitioners’ claim that they permitted or tolerated the occupation of the property by
respondents. The complaint contains only bare allegations that “respondents without any color of title
whatsoever occupies the land in question by building their house in the said land thereby depriving
petitioners the possession thereof.” Nothing has been said on how respondents’ entry was effected or how
and when dispossession started. Admittedly, no express contract existed between the parties. This failure of
petitioners to allege the key jurisdictional facts constitutive of unlawful detainer is fatal. Since the complaint
did not satisfy the jurisdictional requirement of a valid cause for unlawful detainer, the municipal trial court
had no jurisdiction over the case. It is in this light that this Court finds that the Court of Appeals correctly
found that the municipal trial court had no jurisdiction over the complaint. (Emphasis supplied.)
The complaint in this case is similarly defective as it failed to allege how and when entry was effected. The
bare allegation of petitioner that “sometime in May, 2007, she discovered that the defendants have entered
the subject property and occupied the same”, as correctly found by the MCTC and CA, would show that
respondents entered the land and built their houses thereon clandestinely and without petitioner’s consent,
which facts are constitutive of forcible entry, not unlawful detainer. Consequently, the MCTC has no
jurisdiction over the case and the RTC clearly erred in reversing the lower court’s ruling and granting reliefs
prayed for by the petitioner.
Lastly, petitioner’s argument that the CA gravely erred in nullifying a final and executory judgment of the
RTC deserves scant consideration.
It is well-settled that a court’s jurisdiction may be raised at any stage of the proceedings, even on appeal.
The reason is that jurisdiction is conferred by law, and lack of it affects the very authority of the court to
take cognizance of and to render judgment on the action.20 Indeed, a void judgment for want of jurisdiction
is no judgment at all. It cannot be the source of any right nor the creator of any obligation. All acts
performed pursuant to it and all claims emanating from it have no legal effect. Hence, it can never become
final and any writ of execution based on it is void. 21cralawlawlibrary
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated June 20, 2012 of the Court
of Appeals in CA-G.R. SP No. 123195 is hereby AFFIRMED.
No pronouncement as to costs.
SO ORDERED.cralawred
 FIRST DIVISION
G.R. No. 156995, January 12, 2015
RUBEN MANALANG, CARLOS MANALANG, CONCEPCION GONZALES AND LUIS
MANALANG, Petitioners, v. BIENVENIDO AND MERCEDES BACANI, Respondents.
DECISION
BERSAMIN, J.:
In the exercise of its appellate jurisdiction, the Regional Trial Court (RTC) shall decide the appeal of the
judgment of the Municipal Trial Court (MTC) in unlawful detainer or forcible entry cases on the basis of the
entire record of the proceedings had in the court of origin and such memoranda and/or briefs as may be
required by the RTC. There is no trial de novo of the case.cralawred
The Case
The petitioners assail the decision promulgated on October 18, 2002 in CA-G.R. SP No. 68419,1 whereby
the Court of Appeals (CA) reversed and set aside the decision of the RTC, Branch 49, in Guagua,
Pampanga, and reinstated the judgment rendered on August 31, 2000 by the MTC of Guagua, Pampanga
dismissing their complaint for unlawful detainer and the respondents’ counterclaim. They also hereby assail
the resolution promulgated on January 24, 2003 denying their motion for
reconsideration.2chanRoblesvirtualLawlibrary
Antecedents
Petitioners Ruben Manalang, Amado Manalang, Carlos Manalang, Concepcion M. Gonzales, Ladislao
Manalang and Luis Manalang were the co-owners of Lot No 4236 with an area of 914 square meters of the
Guagua Cadastre, and declared for taxation purposes in the name of Tomasa B. Garcia. The land was
covered by approved survey plan Ap-03-004154. Adjacent to Lot 4236 was the respondents’ Lot No. 4235
covered by Original Certificate of Title (OCT) No. N-216701. In 1997, the petitioners caused the relocation
and verification survey of Lot 4236 and the adjoining lots, and the result showed that the respondents had
encroached on Lot No. 4236 to the extent of 405 square meters. A preliminary relocation survey conducted
by the Lands Management Section of the Department of Environment and Natural Resources (DENR)
confirmed the result on the encroachment. When the respondents refused to vacate the encroached portion
and to surrender peaceful possession thereof despite demands, the petitioners commenced this action for
unlawful detainer on April 21, 1997 in the MTC of Guagua (Civil Case No. 3309), and the case was
assigned to Branch 2 of that court.3chanRoblesvirtualLawlibrary
On September 17, 1998, the MTC (Branch 2) dismissed Civil Case No. 3309 for lack of jurisdiction based
on its finding that the action involved an essentially boundary dispute that should be properly resolved in
an accion reivindicatoria.4 It stated that the complaint did not aver any contract, whether express or implied,
between the petitioners and the respondents that qualified the case as one for unlawful detainer; and that
there was also no showing that the respondents were in possession of the disputed area by the mere tolerance
of the petitioners due to the latter having become aware of the encroachment only after the relocation survey
held in 1997.
On appeal, however, the RTC reversed the MTC (Branch 2), and remanded the case for further
proceedings,5 holding that because there was an apparent withholding of possession of the property and the
action was brought within one year from such withholding of possession the proper action was ejectment
474
which was within the jurisdiction of the MTC; and that the case was not a boundary dispute that could be
resolved in an accion reinvidicatoria, considering that it involved a sizeable area of property and not a mere
transferring of boundary.6chanRoblesvirtualLawlibrary
Upon remand, the MTC, Branch 1,7 ultimately dismissed the complaint and counterclaim for lack of merit
through the decision rendered on August 31, 2000, 8 ruling that the petitioners failed to adduce clear and
convincing evidence showing that the respondents had encroached on their property and had been occupying
and possessing property outside the metes and bounds described in Bienvenido Bacani’s OCT No. N-
216701; that the preponderance of evidence was in favor of the respondents’ right of possession; and that the
respondent’s counterclaim for damages should also be dismissed, there being no showing that the complaint
had been filed in gross and evident bad faith. 9chanRoblesvirtualLawlibrary
Once more, the petitioners appealed to the RTC.
At that point, the RTC ordered the petitioners to conduct a relocation survey to determine their allegation of
encroachment, and also heard the testimony of the surveyor, Engr. Emmanuel Limpin, then Acting Chief of
the Survey Section of the CENR- DENR.
On September 19, 2001,10 the RTC rendered its judgment whereby it reversed and set aside the MTC’s
decision of August 31, 2000, observing that the respondents had encroached on the petitioners’ property
based on the court-ordered relocation survey, the reports by Engr. Limpin, and his testimony; 11 that the
respondents could not rely on their OCT No. N-216701, considering that although their title covered only
481 square meters, the relocation survey revealed that they had occupied also 560 square meters of the
petitioners’ Lot No. 4236;12 that the petitioners did not substantiate their claims for reasonable
compensation, attorney’s fees and litigation expenses; and that, nevertheless, after it had been established
that the respondents had encroached upon and used a portion of the petitioners’ property, the latter were
entitled to P1,000.00/month as reasonable compensation from the filing of the complaint up to time that the
respondents actually vacated the encroached property, plus P20,000.00 attorney’s
fees.13chanRoblesvirtualLawlibrary
The respondents moved for reconsideration, but the RTC denied their motion for its lack of
merit.14chanRoblesvirtualLawlibrary
The respondents appealed.
On October 18, 2002, the CA promulgated its assailed decision,15viz:chanroblesvirtuallawlibrary
WHEREFORE, the appealed RTC decision is hereby REVERSED and SET ASIDE, and the decisions of the
MTC of Guagua, Pampanga, Branches 1 and 2, are REINSTATED.
No pronouncement as to costs.
SO ORDERED.
The CA concluded that the RTC, by ordering the relocation and verification survey “in aid of its appellate
jurisdiction” upon motion of the petitioners and over the objection of the respondents, and making a
determination of whether there was an encroachment based on such survey and testimony of the surveyor,
had acted as a trial court in complete disregard of the second paragraph of Section 18, Rule 70 of the Rules
of Court. It declared such action by the RTC as unwarranted because it amounted to the reopening of the
trial, which was not allowed under Section 13(3) Rule 70 of the Rules of Court. It observed that the
relocation and verification survey was inconclusive inasmuch as the surveyor had himself admitted that he
could not determine which of the three survey plans he had used was correct without a full-blown trial.
The CA held that considering that the petitioners’ complaint for unlawful detainer did not set forth when and
how the respondents had entered the land in question and constructed their houses thereon, jurisdiction did
not vest in the MTC to try and decide the case; that the complaint, if at all, made out a case for either accion
reivindicatoria or accion publiciana, either of which fell within the original jurisdiction of the RTC; and that
the RTC’s reliance on Benitez v. Court of Appeals16 and Calubayan v. Ferrer17 was misplaced, because the
controlling ruling was that in Sarmiento v. Court of Appeals,18 in which the complaint was markedly similar
to that filed in the case.
The petitioners sought reconsideration, but the CA denied their motion for its lack of merit in the resolution
of January 24, 2003.19chanRoblesvirtualLawlibrary
Issues
Hence, this appeal.
The petitioners contend that the RTC had authority to receive additional evidence on appeal in an ejectment
case because it was not absolutely confined to the records of the trial in resolving the appeal; that the
respondents were estopped from assailing the relocation and verification survey ordered by the RTC because
they had actively participated in the survey and had even cross-examined Engr. Limpin, the surveyor tasked
to conduct the survey;20 that Engr. Limpin’s testimony must be given credence, honoring the well-
entrenched principle of regularity in the performance of official functions; 21 that the RTC did not conduct a
trial de novo by ordering the relocation and verification survey and hearing the testimony of the surveyor;
that the desirability of the relocation and verification survey had always been part of the proceedings even
before the case was appealed to the RTC;22 that, in any case, the peculiar events that transpired justified the
RTC’s order to conduct a relocation and verification survey; 23 that the case, because it involved
encroachment into another’s property, qualified as an ejectment case that was within the jurisdiction of the
MTC; and that the respondents were barred by laches for never questioning the RTC’s February 11, 1999
ruling on the issue of jurisdiction.24chanRoblesvirtualLawlibrary
In contrast, the respondents assail the relocation and verification survey ordered by the RTC as immaterial,
because (a) it could not vest a right of possession or ownership; (b) the petitioners were mere claimants, not
the owners of the property; (c) the petitioner had never been in possession of the area in question; and (d)
cadastral surveys were not reliable. Hence, they maintain that whether or not the relocation and verification
survey was considered would not alter the outcome of the case.25chanRoblesvirtualLawlibrary
Ruling of the Court
The appeal has no merit.
To start with, the RTC, in an appeal of the judgment in an ejectment case, shall not conduct a rehearing or
trial de novo.26 In this connection, Section 18, Rule 70 of the Rules of Court clearly
provides:chanroblesvirtuallawlibrary
Sec. 18. Judgment conclusive only on possession; not conclusive in actions involving title or ownership. —
x x x.
xxxx
The judgment or final order shall be appealable to the appropriate Regional Trial Court which shall
475
decide the same on the basis of 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
Court. (7a)
Hence, the RTC violated the foregoing rule by ordering the conduct of the relocation and verification survey
“in aid of its appellate jurisdiction” and by hearing the testimony of the surveyor, for its doing so was
tantamount to its holding of a trial de novo. The violation was accented by the fact that the RTC ultimately
decided the appeal based on the survey and the surveyor’s testimony instead of the record of the proceedings
had in the court of origin.
Secondly, on whether or not Civil Case No. 3309 was an ejectment case within the original and exclusive
jurisdiction of the MTC, decisive are the allegations of the complaint. Accordingly, the pertinent allegations
of the petitioners’ complaint follow:chanroblesvirtuallawlibrary
2. Plaintiffs are co-owners of land known as Lot no. 4236 of the Guagua cadastre. Plaintiffs inherited the
said parcel of residential land from Tomasa B. Garcia-Manalang who is the absolute owner of the said
property and the same is declared for taxation purposes in her name under Tax Declaration No. 07014906, a
copy of which is hereto attached as Annex “A”;
3. Lot No. 4236 is covered by an approved plan, Plan Ap-03-004154 (a copy made Annex ‘B”) and it
consists of 914 square meters;
4. Adjacent to plaintiff’s [p]roperty is Lot No. 4235 of the Guagua Cadastre and covered by approved plan
As-03-00533 (copy made Annex “C”) which is being claimed by defendants and is the subject matter of
Cadastral Case No. N-229 of the Regional Trial Court of Guagua, Branch 53 where a decision (copy made
Annex “D”) was rendered by said court on August 28, 1996 confirming the title over said lot in favor of
defendant Bienvenido Bacani. The said decision is now final and executory …
5. On February 23, 1997, plaintiffs caused the relocation and verification survey of cadastral Not No. 4236
of the Guagua Cadastre belonging to plaintiff and the adjoining lots, particularly Lot No. 4235 being
claimed by defendants;
6. The relocation and verification survey conducted by Engr. Rufo R. Rivera, a duly licensed Geodetic
Engineer per plan (copy made Annex “F”) revealed that defendants had encroached an area of 405 square
meters of the parcel of land belonging to plaintiffs. In fact, the whole or part of the houses of the said
defendants have been erected in said encroached portion;
7. Sometime in June of 1997, plaintiffs through plaintiff Concepcion Gonzales lodged a complaint before
the Barangay Council of San Juan, Guagua, Pampanga against defendants regarding the encroached portion.
A preliminary relocation survey was conducted by the Lands Management Sector of the DENR and it was
found that indeed, defendants encroached into the parcel of land belonging to plaintiffs. This finding was
confirmed by the approved plan Ap-03-004154;
8. Since defendants refused to vacate the premises and surrender the peaceful possession thereof to plaintiff,
the Barangay Captain of San Juan, Guagua, Pampanga issued a certification to file action (copy made Annex
“G’) dated March 4, 1997 to enable the plaintiff to file the appropriate action in court;
9. On March 10, 1997, plaintiffs sent a formal demand letter (copy made Annex ‘H”) to defendants to vacate
the premises and to pay reasonable compensation for the use of the said encroached portion;
10. Despite receipt of said demand letter per registry return cards attached to the letter, defendants failed and
refused to vacate the encroached portion and surrender the peaceful possession thereof to plaintiffs;

11. Plaintiffs are entitled to a reasonable compensation in the amount of P 3,000.00 from defendants for the
illegal use and occupation of their property by defendants;

12. By reason of the unjust refusal of defendants to vacate the premises and pay reasonable compensation to
plaintiffs, the latter were constrained to engage the services of counsel for P30,00.00 plus P1,000.00 per
appearance and incur litigation expenses in the amount of P10,000.00. 27

Given the foregoing allegations, the case should be dismissed without prejudice to the filing of a non-
summary action like accion reivindicatoria. In our view, the CA correctly held that a boundary dispute must
be resolved in the context of accion reivindicatoria, not an ejectment case. The boundary dispute is not
about possession, but encroachment, that is, whether the property claimed by the defendant formed part of
the plaintiff’s property. A boundary dispute cannot be settled summarily under Rule 70 of the Rules of
Court, the proceedings under which are limited to unlawful detainer and forcible entry. In unlawful detainer,
the defendant unlawfully withholds the possession of the premises upon the expiration or termination of his
right to hold such possession under any contract, express or implied. The defendant’s possession was lawful
at the beginning, becoming unlawful only because of the expiration or termination of his right of possession.
In forcible entry, the possession of the defendant is illegal from the very beginning, and the issue centers on
which between the plaintiff and the defendant had the prior possession de facto.

Thirdly, the MTC dismissed the action because it did not have jurisdiction over the case. The dismissal was
correct. It is fundamental that the allegations of the complaint and the character of the relief sought by the
complaint determine the nature of the action and the court that has jurisdiction over the action. 28 To be clear,
unlawful detainer is an action filed by a lessor, vendor, vendee, or other person against whom the possession
of any land or building is unlawfully withheld after the expiration or termination of the right to hold
possession by virtue of any contract, express or implied.29 To vest in the MTC the jurisdiction to effect the
ejectment from the land of the respondents as the occupants in unlawful detainer, therefore, the complaint
should embody such a statement of facts clearly showing the attributes of unlawful detainer.30However, the
allegations of the petitioners’ complaint did not show that they had permitted or tolerated the occupation of
the portion of their property by the respondents; or how the respondents’ entry had been effected, or how
and when the dispossession by the respondents had started. All that the petitioners alleged was the
respondents’ “illegal use and occupation” of the property. As such, the action was not unlawful detainer.

Lastly, the conclusion by the MTC that the petitioners failed to show by clear and convincing evidence that
the respondents had encroached on the petitioners’ property was also warranted. In contrast, the only basis
for the RTC’s decision was the result of the relocation and verification survey as attested to by the surveyor,
but that basis should be disallowed for the reasons earlier mentioned. Under the circumstances, the
reinstatement of the ruling of the MTC by the CA was in accord with the evidence.chanrobleslaw

WHEREFORE, the Court AFFIRMS the decision promulgated on October 18, 2002; and ORDERS the
petitioners to pay the costs of suit.

SO ORDERED.

476
 SECOND DIVISION
G.R. No. 198356, April 20, 2015
ESPERANZA SUPAPO AND THE HEIRS OF ROMEO SUPAPO, NAMELY: ESPERANZA, REX
EDWARD, RONALD TROY, ROMEO, JR., SHEILA LORENCE, ALL SURNAMED SUPAPO,
AND SHERYL FORTUNE SUPAPO-SANDIGAN, Petitioners, v. SPOUSES ROBERTO AND SUSAN
DE JESUS, MACARIO BERNARDO, AND THOSE PERSONS CLAIMING RIGHTS UNDER
THEM, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 filed by petitioners Esperanza Supapo and Romeo
Supapo2 (Spouses Supapo) to assail the February 25, 2011 decision 3 and August 25, 2011 resolution4 of the
Court of Appeals (CA) in CA-G.R. SP No. 111674.
Factual Antecedents
The Spouses Supapo filed a complaint5 for accion publiciana against Roberto and Susan de Jesus (Spouses
de Jesus), Macario Bernardo (Macario), and persons claiming rights under them (collectively,
the respondents), with the Metropolitan Trial Court (MeTC) of Caloocan City.
The complaint sought to compel the respondents to vacate a piece of land located in Novaliches, Quezon
City, described as Lot 40, Block 5 (subject lot). The subject lot is covered by Transfer Certificate of Title
(TCT) No. C-284416 registered and titled under the Spouses Supapo's names. The land has an assessed value
of thirty-nine thousand nine hundred eighty pesos (39,980.00) as shown in the Declaration of Real Property
Value (tax declaration) issued by the Office of the City Assessor of Caloocan.7
The Spouses Supapo did not reside on the subject lot. They also did not employ an overseer but they made
sure to visit at least twice a year.8 During one of their visits in 1992, they saw two (2) houses built on the
subject lot. The houses were built without their knowledge and permission. They later learned that the
Spouses de Jesus occupied one house while Macario occupied the other one. 9
The Spouses Supapo demanded from the respondents the immediate surrender of the subject lot by bringing
the dispute before the appropriate Lupong Tagapamayapa. The Lupon issued a Katibayan Upang
Makadulog sa Hukuman (certificate to file action) for failure of the parties to settle amicably.10
The Spouses Supapo then filed a criminal case11 against the respondents for violation of Presidential Decree
No. 772 or the Anti-Squatting Law.12 The trial court convicted the respondents. The dispositive portion of
the decision reads:
WHEREFORE, in view of all the foregoing, this Court finds accused ROBERTO DE JESUS, SUSAN DE
JESUS and MACARIO BERNARDO, GUILTY beyond reasonable doubt for Violation of Presidential
Decree No. 772, and each accused is hereby ordered to pay a fine of ONE THOUSAND PESOS
(P1,000.00), and to vacate the subject premises.
13
SO ORDERED. (Emphasis supplied.)
477
The respondents appealed their conviction to the CA.14 While the appeal was pending, Congress enacted
Republic Act (RA) No. 8368, otherwise known as "An Act Repealing Presidential Decree No. 772," which
resulted to the dismissal of the criminal case.15
On April 30, 1999, the CA's dismissal of the criminal case became final. 16
Notwithstanding the dismissal, the Spouses Supapo moved for the execution of the respondents' civil
liability, praying that the latter vacate the subject lot. The Regional Trial Court (RTC) granted the motion
and issued the writ of execution. The respondents moved for the quashal of the writ but the RTC denied the
same. The RTC also denied the respondents' motion for reconsideration.
The respondents thus filed with the CA a petition for certiorari to challenge the RTC's orders denying the
quashal of the writ and the respondent's motion for reconsideration. 17 The CA granted the petition and held
that with the repeal of the Anti-Squatting Law, the respondents' criminal and civil liabilities were
extinguished.18 The dispositive portion of the decision reads:
WHEREFORE, premises considered, the petition for certiorari with prayer for injunction is GRANTED.
The orders dated June 5, 2003 and July 24, 2003 of Branch 131 of the Regional Trial Court of Caloocan
City in Criminal Case No. C-45610 are REVERSED and SET ASIDE. Said court is hereby
permanently ENJOINED from further executing or implementing its decision dated March 18, 1996.
SO ORDERED.
The CA, however, underscored that the repeal of the Anti-Squatting Law does not mean that people now
have unbridled license to illegally occupy lands they do not own, and that it was not intended to compromise
the property rights of legitimate landowners.19 In cases of violation of their property rights, the CA noted
that recourse may be had in court by filing the proper action for recovery of possession.
The Spouses Supapo thus filed the complaint for action publiciana.20
After filing their Answer,21 the respondents moved to set their affirmative defenses for preliminary
hearing22 and argued that: (1) there is another action pending between the same parties; (2) the complaint
for accion publiciana is barred by statute of limitations; and (3) the Spouses Supapo's cause of action is
barred by prior judgment.
The MeTC Ruling23
The MeTC denied the motion to set the affirmative defenses for preliminary hearing. It ruled that the
arguments advanced by the respondents are evidentiary in nature, which at best can be utilized in the course
of the trial. The MeTC likewise denied the respondents' motion for reconsideration.
From the MeTC's ruling, the respondents filed a petition for certiorari with the RTC.24
The RTC Ruling25
The RTC granted the petition for certiorari on two grounds, viz.: (i) the action has prescribed; and
(ii) accion publiciana falls within the exclusive jurisdiction of the RTC.
It held that in cases where the only issue involved is possession, the MeTC has jurisdiction if the action for
forcible entry or unlawful detainer is filed within one (1) year from the time to demand to vacate was made.
Otherwise, the complaint for recovery of possession should be filed before the RTC.
The dispositive portion of the RTC decision reads:
WHEREFORE, premises considered, the instant petition is hereby GRANTED.
The Orders dated October 24, 2008 and February 23, 2009 are hereby declared NULL and VOID.
The Public Respondent is hereby directed to DISMISS Civil Case No. 08-29245 for lack of jurisdiction.
SO ORDERED.26
In their motion for reconsideration,27 the Spouses Supapo emphasized that the court's jurisdiction over an
action involving title to or possession of land is determined by its assessed value; that the RTC does not
have an exclusive jurisdiction on all complaints for accion publiciana; and that the assessed value of the
subject lot falls within MeTC's jurisdiction.
The RTC denied the petitioners' motion for reconsideration.
It held that although the MeTC had jurisdiction based on the assessed value of the subject lot, the Spouses
Supapos' cause of action had already prescribed, the action having been filed beyond the ten (l0)-year
prescriptive period under Article 555 of the Civil Code.28 As it was not proven when the actual demand to
vacate was made, the RTC ruled that the reckoning period by which the ejectment suit should have been
filed is counted from the time the certificate to file action was issued. The certificate to file action was
issued on November 25, 1992, while the complaint for accion publiciana was filed only on March 7, 2008,
or more than ten (10) years thereafter.
Dissatisfied with the RTC ruling, the Spouses Supapo appealed to the CA. 29
The CA Ruling30
The CA dismissed the appeal and held that the complaint for accion publiciana should have been lodged
before the RTC and that the period to file the action had prescribed.
The dispositive portion of the CA decision reads:
WHEREFORE, the appeal is DENIED. The Decision dated June 30, 2009 and Order dated October 19,
2009 are AFFIRMED.
SO ORDERED
The Spouses Supapo moved31 but failed32 to secure a reconsideration of the CA decision; hence, they came
to us through the present petition.
The Petition
In seeking reversal of the CA's ruling, the Spouses Supapo essentially argue that:
(1) the MeTC exercises exclusive original jurisdiction over accion publiciana where the assessed
value of the property does not exceed P20,000.00, or P50,000.00 if the property is located in
Metro Manila; and that
(2) prescription had not yet set in because their cause of action is imprescriptible under the Torrens
system.
The Respondents' Case33
478
The respondents argue that the complaint for accion publiciana was (1) filed in the wrong court; (2) barred
by prescription; and (3) barred by res judicata.
Issues
The issues for resolution are:
I. Whether the MeTC properly acquired jurisdiction;
II. Whether the cause of action has prescribed; and
III. Whether the complaint for accion publiciana is barred by res judicata.
Our Ruling
The petition is meritorious.
We hold that: (1) the MeTC properly acquired jurisdiction; (2) the cause of action has not prescribed; and
(3) the complaint is not barred by res judicata.
Accion Publiciana and
the Jurisdiction of the
MeTC
Accion publiciana is an ordinary civil proceeding to determine the better right of possession of realty
independent of title. It refers to an ejectment suit filed after the expiration of one year from the accrual of the
cause of action or from the unlawful withholding of possession of the realty. 34
In the present case, the Spouses Supapo filed an action for the recovery of possession of the subject lot but
they based their better right of possession on a claim of ownership.
This Court has held that the objective of the plaintiffs in accion publiciana is to recover possession only, not
ownership. However, where the parties raise the issue of ownership, the courts may pass upon the issue to
determine who between the parties has the right to possess the property. 35
This adjudication is not a final determination of the issue of ownership; it is only for the purpose of
resolving the issue of possession, where the issue of ownership is inseparably linked to the issue of
possession. The adjudication of the issue of ownership, being provisional, is not a bar to an action between
the same parties involving title to the property. The adjudication, in short, is not conclusive on the issue of
ownership.36
Thus, while we will dissect the Spouses Supapo's claim of ownership over the subject property, we will only
do so to determine if they or the respondents should have the right of possession.
Having thus determined that the dispute involves possession over a real property, we now resolve which
court has the jurisdiction to hear the case.
Under Batas Pambansa Bilang 129,37 the jurisdiction of the RTC over actions involving title to or
possession of real property is plenary.38
RA No. 7691,39 however, divested the RTC of a portion of its jurisdiction and granted the Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts the exclusive and original jurisdiction to
hear actions where the assessed value of the property does not exceed Twenty Thousand Pesos
(P20,000.00), or Fifty Thousand Pesos (P50,000.00), if the property is located in Metro Manila.
Section 1 of RA No. 7691 states:
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of
1980," is hereby amended to read as follows:
Section. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original
jurisdiction:
(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein,
where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for
civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) x x x.
(Emphasis supplied.)
Section 3 of the same law provides:
Section. 3. Section 33 of the same law is hereby amended to read as follows:
Section. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in Civil Cases. - Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property,
or any interest therein where the assessed value of the property or interest therein does not exceed
Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses and costs x x x. (Emphasis supplied.)
In view of these amendments, jurisdiction over actions involving title to or possession of real property is
now determined by its assessed value.40 The assessed value of real property is its fair market value
multiplied by the assessment level. It is synonymous to taxable value. 41
In Quinagoran v. Court of Appeals,42 we explained:
[D]oes the RTC have jurisdiction over all cases of recovery of possession regardless of the value of the
property involved?
The answer is no. The doctrine on which the RTC anchored its denial of petitioner's Motion to Dismiss, as
affirmed by the CA — that all cases of recovery of possession or accion publiciana lies with the regional
trial courts regardless of the value of the property — no longer holds true. As tilings now stand, a
distinction must be made between those properties the assessed value of which is below P20,000.00, if
outside Metro Manila; and P50,000.00, if within.43 (Emphasis supplied.)
In this regard, the complaint must allege the assessed value of the real property subject of the complaint or
the interest thereon to determine which court has jurisdiction over the action. This is required because the
nature of the action and the court with original and exclusive jurisdiction over the same is determined by the
material allegations of the complaint, the type of relief prayed for by the plaintiff, and the law in effect when
the action is filed, irrespective of whether the plaintiffs are entitled to some or all of the claims asserted
therein.44
479
In the present case, the Spouses Supapo alleged that the assessed value of the subject lot, located in Metro
Manila, is P39,980.00. This is proven by the tax declaration 45 issued by the Office of the City Assessor of
Caloocan. The respondents do not deny the genuineness and authenticity of this tax declaration.
Given that the Spouses Supapo duly complied with the jurisdictional requirements, we hold that the MeTC
of Caloocan properly acquired jurisdiction over the complaint for accion publiciana.
The cause of action
has not prescribed
The respondents argue that the complaint for accion publiciana is dismissible for being filed out of time.
They invoke Article 555 of the Civil Code, which states: Art. 555. A possessor may lose his possession:
xxxx
(4) By the possession of another, subject to the provisions of Article 537, if the new possession has lasted
longer than one year. But the real right of possession is not lost till after the lapse of ten years.
(Emphasis supplied.)
The respondents point out that the Spouses Supapo filed the complaint for accion publiciana on March 7,
2008 or more than ten (10) years after the certificate to file action was issued on November 25, 1992. The
respondents contend that the Spouses Supapo may no longer recover possession of the subject property, the
complaint having been filed beyond the period provided by law.
Further, while the respondents concede that the Spouses Supapo hold a TCT over the subject property, and
assuming a Torrens title is imprescriptible and indefeasible, they posit that the latter have lost their right to
recover possession because of laches.
On their part, the Spouses Supapo admit that they filed the complaint for accion publiciana more than ten
(10) years after the certificate to file action was issued. Nonetheless, they argue that their cause of action is
imprescriptible since the subject property is registered and titled under the Torrens system.
We rule that the Spouses Supapo's position is legally correct.
At the core of this controversy is a parcel of land registered under the Torrens system. The Spouses Supapo
acquired the TCT on the subject lot in 1979.46 Interestingly, the respondents do not challenge the existence,
authenticity and genuineness of the Supapo's TCT.47
In defense, the respondents rest their entire case on the fact that they have allegedly been in actual, public,
peaceful and uninterrupted possession of the subject property in the concept of an owner since 1992. The
respondents contend that they built their houses on the subject lot in good faith. Having possessed the
subject lot for more than ten (10) years, they claim that they can no longer be disturbed in their possession. 48
Under the undisputed facts of this case, we find that the respondents' contentions have no legal basis.
In a long line of cases, we have consistently ruled that lands covered by a title cannot be acquired by
prescription or adverse possession. We have also held that a claim of acquisitive prescription is baseless
when the land involved is a registered land because of Article 1126 49 of the Civil Code in relation to Act 496
[now, Section 47 of Presidential Decree (PD) No. 152950].51
The Spouses Supapo (as holders of the TCT) enjoy a panoply of benefits under the Torrens system. The
most essential insofar as the present case is concerned is Section 47 of PD No. 1529 which states:
Section 47. Registered land not subject to prescriptions. No title to registered land in derogation of the title
of the registered owner shall be acquired by prescription or adverse possession.
In addition to the imprescriptibility, the person who holds a Torrens Title over a land is also entitled to the
possession thereof.52 The right to possess and occupy the land is an attribute and a logical consequence of
ownership.53 Corollary to this rule is the right of the holder of the Torrens Title to eject any person illegally
occupying their property. Again, this right is imprescriptible. 54
In Bishop v. CA,55 we held that even if it be supposed that the holders of the Torrens Title were aware of the
other persons' occupation of the property, regardless of the length of that possession, the lawful owners
have a right to demand the return of their property at any time as long as the possession was unauthorized or
merely tolerated, if at all.56
Even if the defendant attacks the Torrens Title because of a purported sale or transfer of the property, we
still rule in favor of the holder of the Torrens Title if the defendant cannot adduce, in addition to the deed of
sale, a duly-registered certificate of title proving the alleged transfer or sale.
A case in point is Umpoc v. Mercado57 in which we gave greater probative weight to the plaintiffs TCT vis-
a-vis the contested unregistered deed of sale of the defendants. Unlike the defendants in Umpoc, however,
the respondents did not adduce a single evidence to refute the Spouses Supapo's TCT. With more reason
therefore that we uphold the indefeasibility and imprescriptibility of the Spouses Supapo's title.
By respecting the imprescriptibility and indefeasibility of the Spouses Supapo's TCT, this Court merely
recognizes the value of the Torrens System in ensuring the stability of real estate transactions and integrity
of land registration.
We reiterate for the record the policy behind the Torrens System, viz.:
The Government has adopted the Torrens system due to its being the most effective measure to guarantee
the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and
recognized. If a person purchases a piece of land on the assurance that the seller's title thereto is valid, he
should not run the risk of being told later that his acquisition was ineffectual after all, which will not only be
unfair to him as the purchaser, but will also erode public confidence in the system and will force land
transactions to be attended by complicated and not necessarily conclusive investigations and proof of
ownership. The further consequence will be that land conflicts can be even more abrasive, if not even
violent.58
With respect to the respondents' defense59 of laches, suffice it to say that the same is evidentiary in nature
and cannot be established by mere allegations in the pleadings.60 In other words, the party alleging laches
must adduce in court evidence proving such allegation. This Court not being a trier of facts cannot rule on
this issue; especially so since the lower courts did not pass upon the same.
Thus, without solid evidentiary basis, laches cannot be a valid ground to deny the Spouses Supapo's
petition.61 On the contrary, the facts as culled from the records show the clear intent of the Spouses Supapo
to exercise their right over and recover possession of the subject lot, viz.: (1) they brought the dispute to the
appropriate Lupon; (2) they initiated the criminal complaint for squatting; and (3) finally, they filed
the action publiciana. To our mind, these acts negate the allegation of laches.
480
With these as premises, we cannot but rule that the Spouses Supapo's right to recover possession of the
subject lot is not barred by prescription.
The action is not barred
by prior judgment
As a last-ditch effort to save their case, the respondents invoke res judicata. They contend that the decision
of the CA in CA-G.R. SP No. 78649 barred the filing of the action publiciana.
To recall, CA-G.R. SP No. 78649 is the petition for certiorari filed by the respondents to challenge the
RTC's issuance of the writ enforcing their civil liability (i.e., to vacate the subject property) arising from
their conviction under the Anti-Squatting Law. The CA granted the petition and permanently enjoined the
execution of the respondents' conviction because their criminal liability had been extinguished by the repeal
of the law under which they were tried and convicted. It follows that their civil liability arising from the
crime had also been erased.
The respondents' reliance on the principle of res judicata is misplaced.
Res judicata embraces two concepts: (1) bar by prior judgment as enunciated in Rule 39, Section 47(b) of
the Rules of Civil Procedure; and (2) conclusiveness of judgment in Rule 39, Section 47(c).62
"Bar by prior judgment" means that when a right or fact had already been judicially tried on the merits and
determined by a court of competent jurisdiction, the final judgment or order shall be conclusive upon the
parties and those in privity with them and constitutes an absolute bar to subsequent actions involving the
same claim, demand or cause of action.63
The requisites64 for res judicata under the concept of bar by prior judgment are:
(1) The former judgment or order must be final;
(2) It must be a judgment on the merits;
(3) It must have been rendered by a court having jurisdiction over the subject matter and the parties; and
(4) There must be between the first and second actions, identity of parties, subject matter, and cause
of action.
Res judicata is not present in this case.
While requisites one to three may be present, it is obvious that the there is no identity of subject matter,
parties and causes of action between the criminal case prosecuted under the Anti-Squatting Law and
the civil action for the recovery of the subject property.
First, there is no identity of parties. The criminal complaint, although initiated by the Spouses Supapo, was
prosecuted in the name of the people of the Philippines. The accion publiciana, on the other hand, was filed
by and in the name of the Spouses Supapo.
Second, there is no identity of subject matter. The criminal case involves the prosecution of a crime under
the Anti-Squatting Law while the accion publiciana is an action to recover possession of the subject
property.
And third, there is no identity of causes of action. The people of the Philippines filed the criminal case to
protect and preserve governmental interests by prosecuting persons who violated the statute. The Spouses
Supapo filed the accion publiciana to protect their proprietary interests over the subject property and recover
its possession.

Even casting aside the requirement of identity of causes of action, the defense of res judicata has still no
basis.

The concept of "conclusiveness of judgment" does not require that there is identity of causes of action
provided that there is identity of issue and identity of parties. 65

Under this particular concept of res judicata, any right, fact, or matter in issue directly adjudicated or
necessarily involved in the determination of an action before a competent court in which judgment is
rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between
the parties and their privies, whether or not the claim, demand, purpose, or subject matter of the two actions
is the same.66

As already explained, there is no identity of parties between the criminal complaint under the Anti-Squatting
law and the civil action for accion publiciana. For this reason alone, "collusiveness of judgment" does not
apply.

Even if we assume, for the sake of argument, that there is identity of parties, "conclusiveness of judgment"
still does not apply because there is no identity of issues. The issue in the criminal case is whether the
respondents (accused therein) committed the crime alleged in the information, while the only issue in accion
publiciana is whether the Spouses Supapo have a better right than the respondents to possess and occupy the
subject property.

For all these reasons, the defense of res judicata is baseless.

Final Note

As a final note, we stress that our ruling in this case is limited only to the issue of determining who between
the parties has a better right to possession. This adjudication is not a final and binding determination of the
issue of ownership. As such, this is not a bar for the parties or even third persons to file an action for the
determination of the issue of ownership.

WHEREFORE, premises considered, we GRANT the petition, and consequently REVERSE and SET
ASIDE the February 25, 2011 decision and August 25, 2011 resolution of the Court of Appeals in CA-G.R.
SP No. 111674.

SO ORDERED.

481
 FIRST DIVISION
G.R. No. 160914, March 25, 2015
MARCELA M. DELA CRUZ, Petitioner, v. ANTONIO Q. HERMANO AND HIS WIFE REMEDIOS
HERMANO, Respondent.
DECISION
SERENO, C.J.:
1
This is an appeal by way of a Petition for Review on Certiorari assailing the Decision and Resolution of 2
the Court of Appeals (CA) in CA-G.R. SP No. 76446, which reversed the Decision3 of the Regional Trial
Court (RTC), Branch 18, Tagaytay City, in Civil Case No. TG-2320. The RTC affirmed the Decision4 of the
Municipal Trial Court in Cities (MTCC), Branch 1, Tagaytay City in Civil Case No. 471-2002, dismissing
respondents’ Complaint for Ejectment with Damages against petitioner.
ANTECEDENT FACTS
Respondents Antonio and Remedios Hermano are the registered owners of a house and lot situated in P.B.
Constantino Subdivision, Tagaytay City, covered by Transfer Certificate of Title (TCT) No. T-24503. On 13
June 2002, Antonio sued petitioner before the MTCC of Tagaytay City, Branch 1, for ejectment and
damages. The material allegations of the Complaint5 are as follows:
4. Plaintiff is the registered and lawful owner of a house and lot situated at Lot 2, Block 2, P.B. Constantino
Subd., Tagaytay City, as evidenced by Transfer Certificate of Title No. T-24503 issued by the Registry of
Deeds for Tagaytay City.
5. Defendant occupied and possessed the aforesaid house and lot sometime on September 1, 2001 pursuant
to the alleged Memorandum of Agreement between her and a certain Don Mario Enciso Benitez, without the
authority and consent of the plaintiff;
6. The subject property is used by the plaintiff and his family as their rest house/vacation place after a hard
days [sic] work in Metro Manila;
7. On September 27, 2001, plaintiff through counsel sent a formal demand letter to the defendant for the
latter to vacate and turn over the possession of the property and to pay the rental in the amount of
Ps20,000.00 a month starting September 1, 2001. 6
In her Answer with Counterclaim,7 petitioner admitted the existence of TCT No. T-24503, but she
contended that the true and actual owner of the property was Don Enciso Benitez (Benitez). Allegedly,
Antonio and his wife, respondent Remedios Hermano, had already sold the property to Benitez; the latter, in
turn, sold it to petitioner by virtue of a Deed of Absolute Sale, 8 which they executed on 1 March 2001.
Petitioner claimed that Antonio knew about the sale and her immediate occupation of the premises. She also
claimed that the place was actually uninhabited when she occupied it and that it was Benitez who had
provided the keys thereto. Moreover, Antonio allegedly knew that her caretakers had been managing the
property since March 2001, and that he never questioned their presence there. Thus, petitioner contended
that estoppel had set in, as he had made her believe that she had the right to occupy and possess the
property.9
482
After submission of the parties’ Position Papers,10 the MTCC rendered a Decision11 dated 21 November
2002 dismissing the case for lack of jurisdiction over the subject matter of the Complaint.
The MTCC found that Antonio had, indeed, executed a Deed of Absolute Sale over the subject property in
favor of Benitez. The transfer of title, however, was subject to a condition, i.e., Benitez was supposed to
broker Antonio’s purchase of a property situated in Caloocan City. That condition had not yet been satisfied
when Benitez executed the Deed of Sale in favor of petitioner in March 2001. In other words, Antonio still
owned the property when Benitez delivered it to petitioner. Even so, Antonio’s proper remedy was an action
for recovery, instead of the summary proceeding of ejectment, because there was no showing of forcible
entry or unlawful detainer.
The MTCC ruled thus:
Culled from the facts obtaining in this case, it appeared that Mr. Antonio O. Hermano had indeed executed a
Deed of Absolute Sale of the subject house and lot in favor of Mr. Don Enciso Benitez, but, to the mind of
the court, the obligation to deliver the subject property to Don Enciso Benitez depends upon the happening
of a condition, that is, when the transaction involving the sale of the said Caloocan City property would have
been cleared and consummated; hence, the title to the subject property shall only be transferred to Mr.
Benitez if he has complied with such condition, which may be the reason, why the document has remained
unnotarized.
While it may be true that the agreement to sell the Hermano property to Mr. Benitez is binding as between
the parties, yet, the obligation to deliver the title to the property has not arisen, because Mr. Benitez has yet
to perform the condition; thus, title to the property has not been transferred to Mr. Benitez. Thus, when Mr.
Benitez sold the same property to defendant, the title to the property shall pass to Mrs. Dela Cruz only upon
the happening of condition, that is the delivery of the title to Mr. Benitez by the plaintiff, but, this time it is a
mixed condition, the happening of which depends upon the will of third party, Mr. Antonio Hermano, who
has yet to await and see the fulfilment of the condition by Mr. Benitez, which as it now appears from the
defendant’s evidence, is already marred by serious trouble (Annex “6”).
True that the defendant is now in possession of the subject property, but she has not yet become the true
owner thereof; hence, the plaintiff may yet recover the same from the defendant, but not in an action for
forcible entry or unlawful detainer, as there exists none, but in an action for recovery. 12
Aggrieved, respondents appealed13 to the RTC, which rendered a Decision14 dated 18 March 2003
affirming en toto the Decision of the MTCC.
The RTC opined that respondents’ Complaint did not clearly show whether it was one for forcible entry or
for unlawful detainer. Because it appeared to be an ejectment case, the MTCC took cognizance of it. The
parties’ subsequent pleadings revealed, however, that the case was actually an accion reivindicatoria.
Hence, the MTCC properly dismissed it for lack of jurisdiction. 15
On 10 April 2003, respondent filed a Petition for Review16 with the CA. The appellate court rendered a
Decision17 dated 28 August 2003 granting the Petition. The dispositive portion reads:
WHEREFORE, premises considered, the instant petition for review is hereby GRANTEDand the assailed
18 March 2003 Decision of the Regional Trial Court of Tagaytay [City], Branch 18, in Civil Case No. TG-
2320, is hereby REVERSED and SET ASIDE. ACCORDINGLY, petitioner Antonio Hermano is hereby
declared the lawful possessor of the property located at Lot 2, Block 2, P.B. Constantino Subdivision,
Tagaytay City covered by Transfer Certificate Title No. T-24503 of the Registry of Deeds of Tagaytay City.
Mercy dela Cruz is hereby ordered to VACATE the premises in question and surrender the possession
thereof to Antonio Hermano.
SO ORDERED.18
The reversal by the CA of the rulings of the courts a quo was based on its finding that the case was an
ejectment complaint for forcible entry, and that Antonio had sufficiently alleged and proved prior physical
possession, as well as petitioner’s entry and possession by stealth. 19 Further, the appellate court found that
the case was file within the one-year time bar for an ejectment suit, as Antonio came to know of petitioner’s
possession only on 1 September 2001. 20 Accordingly, it ruled that the MTCC erred in dismissing the case. It
pointed out that under Batas Pambansa Blg. 129, the inferior courts now retain jurisdiction over an
ejectment case, even if the question of possession cannot be resolved without passing upon the issue of
ownership. They retain jurisdiction, provided that the resolution of the issue of ownership shall only be for
the purpose of determining the issue of possession.21
Hence, this Petition for Review.
ISSUE
The issue for resolution is whether Antonio has adequately pleaded and proved a case of forcible entry.
THE COURT’S RULING
The Court GRANTS the Petition.
At the outset, the Court notes that the arguments raised here necessarily require a reevaluation of the parties’
submissions and the CA’s factual findings. Ordinarily, this course of action is proscribed in a petition for
review on certiorari; that is, a Rule 45 petition resolves only questions of law, not questions of fact.
Moreover, factual findings of the CA are generally conclusive on the parties and are therefore not
reviewable by this Court. By way of exception, however, the Court resolves factual issues when the findings
of the MTCC and of the RTC differ from those of the CA, as in this case. 22
After an exhaustive review of the case record, the Court finds that the Complaint was sufficient in form and
substance, but that there was no proof of prior physical possession by respondents.
The Complaint’s allegations sufficiently
established the jurisdictional facts required
in forcible entry cases.
Section 1, Rule 70 of the Rules of Court, requires that in actions for forcible entry, it must be alleged that the
complainant was deprived of the possession of any land or building by force, intimidation, threat, strategy,
or stealth, and that the action was filed anytime within one year from the time the unlawful deprivation of
possession took place. This requirement implies that in those cases, possession of the land by the defendant
has been unlawful from the beginning, as the possession was obtained by unlawful means. Further, the
complainant must allege and prove prior physical possession of the property in litigation until he or she was
deprived thereof by the defendant. The one-year period within which to bring an action for forcible entry is
generally counted from the date of actual entry into the land, except when entry was made through stealth; if
so, the one-year period would be counted from the time the plaintiff learned about it. 23
It is not necessary, however, for the complaint to utilize the language of the statute; i.e., to state that the
person has been deprived of possession by force, intimidation, threat, strategy or stealth. A statement of
facts showing that dispossession took place under those conditions is sufficient. Still, the complaint must
483
show enough on its face to give the court jurisdiction without resort to parol evidence. 24
In the present case, petitioner argues that the Complaint failed to allege prior physical possession, and that
the CA skirted the issue of the sufficiency of the allegations therein. Instead, the appellate court allegedly
addressed only the principal issue of who had the better right to possess the subject property.
It can be readily seen from the Decision of the CA that it squarely addressed the issue of the sufficiency of
the Complaint’s allegations. Thus, contrary to the RTC’s findings, the CA found that the Complaint had
sufficiently alleged respondents’ prior physical possession and petitioner’s entry into the property by stealth.
Moreover, it differed with the RTC’s finding that the case was not for forcible entry.
The CA discussed these issues as follows:
The complaint subject of this case was captioned as “ejectment”. From a reading of the allegations of the
subject Complaint, we find that the action is one for forcible entry. Petitioner alleged that he is the owner of
the property registered under TCT No. T-24503; that the possession thereof by respondent on 1 September
2001 was pursuant to an alleged Memorandum of Agreement between her and a certain Don Mario Enciso,
without the authority and consent of the petitioner; and that he has served written demands, dated 27
September 2001 and 24 October 2001, but that respondent refused to vacate the property. According to
petitioner, the Complaint, which was filed on 13 June 2002, was filed within one year from the occupation
of the property.
xxxx
Petitioner likewise contends that prior to the disputed possession of respondent, he and his family used the
property as their “rest house/vacation place” after their hard day’s work in Metro Manila. He avers that his
possession is anchored on TCT No. T-24503. Notably, respondent acknowledged the existence of the
muniment of title presented by petitioner. In relation thereto, noteworthy is the fact that respondent has
shown no document evidencing proof of ownership over the subject matter except for the unnotarized
documents of conveyances executed between her and Don Mario Enciso Benitez and Don Mario Enciso
Benitez and petitioner. The fact that the deeds were not notarized nor acknowledged before a notary public
raises doubt as to the probative value of said documents. On this matter, evidentiary value weighs in favor of
petitioner.
As regards petitioner’s supplication for restoration of possession which is based on his and his family’s use
of the subject property prior to the inception of the controversy, the rule is that whatever may be the
character of his prior possession, if he has in his favor priority in time, he has the security that entitles him to
remain on the property until he is lawfully ejected by a person having a better right. From a reading of the
records, it is evident that the petitioner had addressed the element of prior physical possession.
Having established prior possession, the corollary conclusion would be that the entry of respondent – and
her subsequent possession of the contested property – was illegal at the inception. Respondent’s entry into
the land was effected without the knowledge of petitioner, consequently, it is categorized as possession by
stealth.25
The allegations in paragraphs 5 and 6 of the Complaint adequately aver prior physical possession by
respondents and their dispossession thereof by stealth, because the intrusion by petitioner was without their
knowledge and consent. The Court thus agrees with the findings of the CA that contrary to those of the RTC
that the case was an action for ejectment in the nature of accion reivindicatoria, the case was actually for
forcible entry and sufficient in form.

Likewise, the Court agrees with the CA’s findings that the Complaint was timely filed. It is settled that
where forcible entry occurred clandestinely, the one-year prescriptive period should be counted from the
time the person who was deprived of possession demanded that the deforciant desist from dispossession
when the former learned about it.26 The owners or possessors of the land cannot be expected to enforce their
right to its possession against the illegal occupant and sue the latter before learning of the clandestine
intrusion. And to deprive lawful possessors of the benefit of the summary action under Rule 70 of the
Revised Rules, simply because the stealthy intruder managed to conceal the trespass for more than a year,
would be to reward clandestine usurpations even if they are unlawful. 27
The title to the property of respondents
and their Tax Declaration proved possession
de jure, but not their actual possession of the
property prior to petitioner’s entry.
The burden of sufficiently alleging prior physical possession carries with it the concomitant burden of
establishing one’s case by a preponderance of evidence. To be able to do so, respondents herein must rely on
the strength of their own evidence, not on the weakness of that of petitioner. It is not enough that the
allegations of a complaint make out a case for forcible entry. The plaintiff must prove prior physical
possession. It is the basis of the security accorded by law to a prior occupant of a property until a person
with a better right acquires possession thereof.28
affidavit.
Therefore, respondents failed to discharge their burden of proving the element of prior physical possession.
Their uncorroborated claim of that fact, even if made under oath, is self-serving. It does not amount to
preponderant evidence, which simply means that which is of greater weight or is more convincing than
evidence that is offered in opposition.32
As noted at the outset, it bears stressing that the Court is not a trier of facts. However, the conflicting
findings of fact of the MTCC and the RTC, on the one hand, and the CA on the other, compelled us to
revisit the records of this case for the proper dispensation of justice.33 Moreover, it must be stressed that the
Court’s pronouncements in this case are without prejudice to the parties’ right to pursue the appropriate
remedy.
WHEREFORE, the Petition for Review on Certiorari is hereby GRANTED. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 76446 are REVERSED, and the Decision of the
MTCC dismissing the Complaint against petitioner is REINSTATED.
SO ORDERED.

The Court has scrutinized the parties’ submissions, but found no sufficient evidence to prove respondents’
allegation of prior physical possession.

To prove their claim of having a better right to possession, respondents submitted their title thereto and the
latest Tax Declaration prior to the initiation of the ejectment suit. As the CA correctly observed, petitioner
failed to controvert these documents with competent evidence. It erred, however, in considering those
documents sufficient to prove respondents’ prior physical possession.

Ownership certainly carries the right of possession, but the possession contemplated is not exactly the same
as that which is in issue in a forcible entry case. Possession in a forcible entry suit refers only to
possession de facto, or actual or material possession, and not one flowing out of ownership. These are
different legal concepts under which the law provides different remedies for recovery of possession. Thus, in
a forcible entry case, a party who can prove prior possession can recover the possession even against the
owner. Whatever may be the character of the possession, the present occupant of the property has the
security to remain on that property if the occupant has the advantage of precedence in time and until a
person with a better right lawfully causes eviction.29

Similarly, tax declarations and realty tax payments are not conclusive proofs of possession. They are merely
good indicia of possession in the concept of owner based on the presumption that no one in one’s right mind
would be paying taxes for a property that is not in one’s actual or constructive possession.30

Guided by the foregoing, the Court finds that the proofs submitted by respondents only established
possession flowing from ownership. Although respondents have claimed from the inception of the
controversy up to now that they are using the property as their vacation house, that claim is not substantiated
by any corroborative evidence. On the other hand, petitioner’s claim that she started occupying the property
in March 2001, and not in September of that year as Antonio alleged in his Complaint, was corroborated by
the Affidavit31 of petitioner’s caretaker. Respondents did not present any evidence to controvert that

484
 SECOND DIVISION
January 25, 2016
G.R. No. 195477
SPOUSES HERMINIO E. ERORITA and EDITHA C. ERORITA, Petitioners,
vs.
SPOUSES LIGAYA DUMLAO and ANTONIO DUMLAO, Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari filed by petitioners to challenge the July 28, 2010
decision1 and January 4, 2011 resolution of the Court of Appeals (CA) in CA-GR CV No. 92770. The CA
affirmed the Regional Trial Court's (RTC) decision ordering the petitioners to vacate the property.
THE ANTECEDENTS
Spouses Antonio and Ligaya Dumlao (Spouses Dumlao) are the registered owners of a parcel of land located
at Barangay San Mariano, Roxas, Oriental Mindoro, and covered by TCT No. T-53000. The San Mariano
Academy structures are built on the property.
The Spouses Dumlao bought the property in an extrajudicial foreclosure sale on April 25, 1990. Because the
former owners, Spouses Herminio and Editha Erorita (Spouses Erorita), failed to redeem it, the title was
consolidated in the buyers’ name.
The Spouses Dumlao agreed to allow the petitioners to continue to operate the school on the property. The
Spouses Erorita appointed Hernan and Susan Erorita as the San Mariano Academy’s administrators.
The Spouses Dumlao alleged that the Eroritas agreed on a monthly rent of Twenty Thousand Pesos
(P20,000.00), but had failed to pay rentals since 1990. The Spouses Erorita countered that the Dumlaos
allowed them to continue to run the school without rental out of goodwill and friendship.
On December 16, 2002, the Spouses Dumlao asked the petitioners to vacate the property. Although the
Spouses Erorita wanted to comply, they could not immediately close the school without clearance from the
Department of Education, Culture, and Sports to whom they are accountable.
On March 4, 2004, the Spouses Dumlao filed a complaint for recovery of possession before the Regional
Trial Court (RTC) against the defendants Hernan, Susan, and the Spouses Erorita. 2
In their joint answer, the defendants prayed that the complaint be dismissed because they cannot be forced to
vacate and to pay the rentals under their factual circumstances.
485
After the issues were joined, the case was set for pre-trial. However, the defendants-Eroritas failed to appear
despite notice. Thus, the RTC declared them in default and ordered the Spouses Dumlao to present
evidence ex parte.
On June 4, 2007, the RTC decided in the Spouses Dumlao’s favor. It ordered the defendants (1) to
immediately vacate the property and turn it over to the Spouses Dumlao, and (2) to pay accumulated rentals,
damages, and attorney’s fees. The RTC also prohibited the defendants from accepting enrolees to the San
Mariano Academy.
The defendants Erorita appealed to the CA arguing that the complaint patently shows a case for unlawful
detainer. Thus, the RTC had no jurisdiction over the subject matter of the case.
THE CA RULING
On appeal, the CA affirmed the RTC’s decision.
The CA ruled that the applicable law on jurisdiction when the complaint was filed, was Republic Act No.
76913 (RA 7691). This law provides that in civil actions involving a real property’s title or possession,
jurisdiction depends on the property’s assessed value and location – if the assessed value exceeds fifty
thousand pesos (P50,000.00) in Metro Manila, and twenty thousand pesos (P20,000.00) outside of Metro
Manila, the RTC has jurisdiction. If the assessed value does not exceed these amounts, then, the Municipal
Trial Court (MTC) has jurisdiction.
Because the tax declaration showed that the assessed value of the property and its improvements exceeded
P20,000.00, the CA concluded that the RTC had jurisdiction.
Citing Barbosa v. Hernandez,4 the CA held that this case involves an action for possession of real property
and not unlawful detainer.
The CA denied the petitioners’ motion for reconsideration; hence, this petition.
THE PARTIES’ ARGUMENTS
In their petition, the Spouses Erorita essentially argue that: (a) the RTC had no jurisdiction because the
allegations in the complaint show a case for unlawful detainer; and (b) Hernan and Susan were improperly
impleaded as parties to this case.
In their comment, the respondents argue that: (a) the RTC had jurisdiction because this case involves issues
other than physical possession; (b) even assuming the RTC initially had no jurisdiction, the petitioners’
active participation during the proceedings bar them from attacking jurisdiction; (c) Hernan and Susan are
real parties in interest as the lease contract’s primary beneficiaries; and (d) this last issue cannot be raised for
the first time on appeal.
ISSUES
Based on the parties’ positions, the issues for our resolution are: Since a decision rendered by a court without jurisdiction is void,11 the RTC’s decision is void.

I. Whether the RTC had jurisdiction; and Jurisdiction over the subject matter may be raised at any time.

II. Whether Hernan and Susan were improperly impleaded. With the jurisdictional issue resolved, we now examine whether the petitioners timely raised this issue.

OUR RULING As a general rule, lack of jurisdiction over the subject matter may be raised at any time, or even for the first
time on appeal.12 An exception to this rule is the principle of estoppel by laches. 13
The petition is partly meritorious.
Estoppel by laches may only be invoked to bar the defense of lack of jurisdiction if the factual milieu is
We hold that: (1) the MTC had jurisdiction; and (2) the second issue was not raised before the lower courts; analogous to Tijam v. Sibonghanoy.14 In that case, lack of jurisdiction was raised for the first time after
thus, it cannot be considered in the present case. almost fifteen (15) years after the questioned ruling had been rendered and after the movant actively
participated in several stages of the proceedings. It was only invoked, too, after the CA rendered a decision
adverse to the movant.
Jurisdiction is based on the allegations in the complaint.
In Figueroa v. People,15 we ruled that the failure to assail jurisdiction during trial is not sufficient for
On the first issue, the allegations in the complaint determine the nature of an action and jurisdiction over the
estoppel by laches to apply. When lack of jurisdiction is raised before the appellate court, no considerable
case.5Jurisdiction does not depend on the complaint’s caption.6 Nor is jurisdiction changed by the defenses
length of time had elapsed for laches to apply.16 Laches refers to the "negligence or omission to assert a right
in the answer; otherwise, the defendant may easily delay a case by raising other issues, then, claim lack of
within a reasonable length of time, warranting a presumption that the party entitled to assert it either has
jurisdiction.7
abandoned it or declined to assert it."17

To make a case for unlawful detainer, the complaint must allege that: (a) initially, the defendant lawfully
The factual setting of this present case is not similar to Tijam so as to trigger the application of the estoppel
possessed the property, either by contract or by plaintiff’s tolerance; (b) the plaintiff notified the defendant
by laches doctrine.1âwphi1 As in Figueroa, the present petitioners assailed the RTC’s jurisdiction in their
that his right of possession is terminated; (c) the defendant remained in possession and deprived plaintiff
appeal before the CA. Asserting lack of jurisdiction on appeal before the CA does not constitute laches.
of its enjoyment; and (d) the plaintiff filed a complaint within one year from the last demand on defendant
Furthermore, the filing of an answer and the failure to attend the pre-trial do not constitute the active
to vacate the property.8 A complaint for accion publiciana or recovery of possession of real property will
participation in judicial proceedings contemplated in Tijam.
not be considered as an action for unlawful detainer if any of these special jurisdictional facts is omitted. 9
Thus, the general rule should apply.1âwphi1 The petitioners timely questioned the RTC's jurisdiction.
A review of the complaint shows that: (a) the owners, Spouses Dumlao, agreed to allow the petitioners to
continue operating the school on the disputed property; (b) in a demand letter dated February 12, 2004, the
Spouses Dumlao told the petitioners to pay and/or vacate the property; (c) the respondents refused to vacate Issue not raised before the lower court
the property; and (d) the Spouses Dumlao filed the complaint (March 4, 2004) within a year from the last
demand to vacate (February 12, 2004). On the second issue, it is settled that issues that have not been raised before the lower courts cannot be
raised for the first time on appeal.18 Basic consideration of due process dictates this rule. 19
Thus, although the complaint bears the caption "recovery of possession," its allegations contain the
jurisdictional facts for an unlawful detainer case. Under RA 7691, an action for unlawful detainer is within We note that the second issue raised by the petitioners were not raised before the lower courts. The
the MTC’s exclusive jurisdiction regardless of the property’s assessed value. 10 petitioners only raised this issue in their petition before this Court. Thus, we need not discuss this issue at
our level.
The CA incorrectly applied our ruling in Barbosa. In that case, the complaint did not state that (i) possession
was unlawfully withheld and (ii) the complaint was filed within a year from the last demand. Because these WHEREFORE, we hereby GRANT the petition. The July 28, 2010 decision and January 4, 2011
special jurisdictional facts for an unlawful detainer case were lacking, we held that the case should be accion resolution of the Court of Appeals in CA-GR CV No. 92770 are hereby REVERSED and SET
publiciana over which the RTC has jurisdiction ASIDE. Accordingly, we DECLARE the June 4, 2007 decision of the RTC in Civil Case No. C-492 void
for lack of jurisdiction.
In the present case, however, the complaint clearly contained the elements of an unlawful detainer case.
Thus, the case should have been filed with the MTC. The RTC had no jurisdiction over this case. SO ORDERED.

486
 FIRST DIVISION
G.R. No. 129521 September 7, 1999
SECURITIES AND EXCHANGE COMMISSION CHAIRMAN PERFECTO R. YASAY, JR.,
ASSOCIATE COMMISSIONERS FE ELOISA C. GLORIA, EDIJER MARTINEZ and ROSALINDA U.
CASIGURAN, petitioners,
vs.
MANUEL D. RECTO, PELAGIO T. RICALDE and CESAR P. MANALAYSAY, respondents.
PARDO, J.:
The case before the Court is an appeal from a decision of the Court of Appeals 1 setting aside the order of
the Securities and Exchange Commission
(SEC) 2 declaring respondents guilty of contempt for disobeying a temporary restraining order issued to
respondents to desist from holding a stockholders meeting of the Interport Resources Corporation.
The facts are as follows:
On June 28, 1996, SEC Chairman Yasay upon request of certain stockholders of Interport Resources
Corporation, directed respondent Ricalde to submit to the SEC a list of stockholders and to set a definite
time and place for the validation of proxies and nominations for directors of the firm.
On the same date, June 28, 1996, the SEC issued a temporary restraining order (TRO) enjoining the
Interport Resources Corporation from holding the July 9, 1996 scheduled annual meeting of the
stockholders.
Notwithstanding the SEC's TRO, the stockholders proceeded with the meeting on July 9, 1996, presided
over by respondent Manalaysay.
On July 10, 1996, the SEC declared the stockholders meeting of Interport Resources Corporation held on
July 9, 1996, null and void and directed respondents to appear before the SEC on July 15, 1996, at 3:00
p.m., to show cause why no disciplinary action should be taken against them or why they should not be cited
in contempt.
At the hearing on July 15, 1996, respondent Manalaysay questioned the validity of the TRO as well as the
contempt proceedings in light of the TRO issued by the Court of Appeals restraining the SEC from
enforcing its TRO. 3
After the hearing, on July 15, 1996, the SEC issued an order stating:
xxx xxx xxx
VIEWED in this light Atty. Cesar Manalaysay, Manuel D. Recto and Atty. Pelagio T.
Ricalde are hereby DECLARED GUILTY OF CONTEMPT and are correspondingly
ORDERED to pay a fine of TEN THOUSAND (P10,000.00) Pesos each upon finality of
this Order for willfully disobeying and disregarding the July 8, 1996 Order of this
Commission. Atty. Cesar Manalaysay is likewise BARRED from practicing his law
profession before this commission for a period of sixty (60) days from date hereof and
Mr. Recto and Atty. Ricalde are, by this ORDER, prohibited and barred from acting as
President/Chairman and Secretary respectively of Interport Resources, Inc. within the
same period. This Order shall be immediately executory unless otherwise restrained by a
court of competent jurisdiction.
SO ORDERED.
EDSA, Greenhills, Mandaluyong City.
(s/t) PERFECTO R. YASAY, JR.
Chairman
(s/t) FE ELOISA C. GLORIA
Associate Commissioner
(s/t) EDIJER A. MARTINEZ
487
Associate Commissioner4
In due time, respondents appealed from the aforesaid order to the Court of Appeals.
After due proceedings, on April 14, 1997, the Court of Appeals promulgated its decision reversing and
setting aside the SEC order declaring respondents guilty of contempt. The dispositive portion reads:
WHEREFORE, premises considered, respondents' Order dated July 15, 1996, is hereby
REVERSED and SET ASIDE.
The cash bond of P50,000.00 may be withdrawn by petitioners.
SO ORDERED.
(s/t) ARTEMIO G. TUQUERO
Associate Justice
(s/t) ARTEMON D. LUNA
Associate Justice
(s/t) HECTOR L. HOFILEÑA
Associate Justice 5
On May 2, 1997, petitioners filed a motion for reconsideration of the decision. However, on June 11, 1997,
the Court of Appeals denied the motion.
Hence, this appeal.
On September 10, 1997, the Court required respondents to comment on the petition within ten (10) days
from notice. 6 On October 7, 1997, respondents filed their comment. 7 In the main, respondents submit that
contempt is criminal in character and their exoneration from a charge of contempt amounts to an acquittal
from which an appeal would not lie. 8
At issue in this petition is whether or not the Court of Appeals erred, as a matter of law, in setting aside the
order of the SEC finding respondents guilty of contempt for disobeying its temporary restraining order to
desist from holding the annual stockholders meeting of the Interport Resources Corporation scheduled on
July 9, 1996.
We agree with respondents that the charge of contempt partakes of the nature of a criminal offense. 9 The
exoneration of the contemner from the charge amounts to an acquittal from which an appeal would not lie.
A distinction is made between a civil and criminal contempt. Civil contempt is the failure to do something
ordered by a court to be done for the benefit of a party. A criminal contempt is any conduct directed against
the authority or dignity of the court. 10
Petitioners argue that the contempt committed by respondents was civil in nature, as the temporary
restraining order the SEC issued was for the benefit of a party to a case. The contention is untenable.
"Civil contempt proceedings are generally held to be remedial and civil in their nature; that is, they are
proceedings for the enforcement of some duty, and essentially a remedy for coercing a person to do the thing
required." 11 "In general, civil contempt proceedings should be instituted by an aggrieved party, or his
successor, or someone who has a pecuniary interest in the right to be protected." 12 If the contempt is
initiated by the court or tribunal exercising the power to punish a given contempt, it is criminal in nature,
and the proceedings are to be conducted in accordance with the principles and rules applicable to criminal
cases. The State is the real prosecutor. 13
"The real character of the proceedings in contempt cases is to be determined by the relief sought or by the
dominant purpose. The proceedings are to be regarded as criminal when the purpose is primarily
punishment, and civil when the purpose is primarily compensatory or remedial." 14
"But whether the first or the second, contempt is still a criminal proceeding in which acquittal, for instance,
is a bar to a second prosecution. The distinction is for the purpose only of determining the character of
punishment to be administered." 15
In this case, the contempt is not civil in nature, but criminal, imposed to vindicate the dignity and power of
the Commission; hence, as in criminal proceedings, an appeal would not lie from the order of dismissal of,
or an exoneration from, a charge of contempt." 16
At any rate, the SEC order directing respondents to show cause why they should not be cited in contempt
was highly improper. The Court of Appeals issued on July 8, 1996, a temporary restraining order against the
order of the SEC of June 28, 1996 directing the Interport Resources Corporation to desist from holding the
stockholders' meeting on July 9, 1996. Contrary to the view of petitioners, the effect of the temporary
restraining order of the Court of Appeals directing the SEC to desist from enforcing its own TRO was to
allow such meeting to proceed as scheduled. More, the Court of Appeals in its final decision nullified the
SEC's order. 17 Hence, there was no willful disobedience to a lawful order of the SEC. Respondents were not
guilty of contempt.
While the SEC is vested with the power to punish for contempt, 18 the salutary rule is that the power to
punish for contempt must be exercised on the preservative, not vindictive principle, 19 and on the corrective
and not retaliatory idea of punishment. 20 The courts and other tribunals vested with the power of contempt
must exercise the power to punish for contempt for purposes that are impersonal, because that power is
intended as a safeguard not for the judges as persons but for the functions that they exercise. 21
In this case, the SEC issued the citation for contempt sua sponte. There was no charge filed by a private
party aggrieved by the acts of respondents. Strictly speaking, there was no disobedience to the SEC's
temporary restraining order. The Court of Appeals enjoined that order. Consequently, respondents' act in
proceeding with the scheduled stock-holders' meeting was not contumacious as there was no willful
disobedience to an order of the SEC. 22 The disobedience which the law punishes as constructive contempt
implies willfulness. For, at bottom, contempt is a willful disregard or disobedience. 23
The SEC was rather hasty in asserting its power to punish for contempt. The chairman and commissioners of
the SEC must exercise the power of contempt judiciously and sparingly with utmost self-restraint. 24
Finally, the penalty imposed exceeded those authorized in the powers of the SEC 25 in relation to the 1964
Revised Rules of Court as amended. 26 If the contempt was committed against a superior court or judge, the
accused may be fined not exceeding thirty thousand pesos (P30,000.00) or imprisoned not more than six (6)
months, or both. The SEC suspended respondent Manalaysay from the practice of law in the SEC, a power
vested exclusively in the Supreme Court. 27
WHEREFORE, the Court hereby DENIES the petition for review on certiorari and AFFIRMS the decision
of the Court of Appeals in GA-G.R. SP No. 41400, promulgated on April 14, 1997.1âwphi1.nêt
No costs.
SO ORDERED.

488

EN BANC
A.M. No. RTJ-03-1771 May 27, 2004
(Formerly A.M. OCA-IPI No. 99-842-RTJ)
SALVADOR SISON, complainant,
vs.
JUDGE JOSE F. CAOIBES, JR., Presiding Judge, and TEODORO S. ALVAREZ, Sheriff IV, Regional
Trial Court, Las Piñas City, Branch 253, respondents,
DECISION
CALLEJO, SR., J.:
The instant administrative complaint arose when Salvador Sison, a Metropolitan Manila Development
Authority (MMDA) traffic enforcer, filed a verified Complaint1 dated October 12, 1999, charging Judge
Jose F. Caoibes, Jr. and Sheriff Teodoro Alvarez of the Regional Trial Court of Las Piñas City, Branch 253,
with grave abuse of authority.
In turn, the complaint stemmed from an Order2 dated September 15, 1999 in Criminal Case No. 99-
0023 which the respondent judge issued, requiring the complainant to appear before him to explain a traffic
incident involving his son and the complainant. The said Order reads, thus:
Per information from the authorized driver of the Presiding Judge of this Court on September 8,
1999, at about 3:00 o’clock in the afternoon of said date, said authorized driver, while on board the
official car of the undersigned on an official errand was flagged by the accused along the Epifanio
delos Santos Avenue while he was positioning the car he was driving to the right lane as he was
then to make a right turn; that after he stopped, he was told by the accused that swerving to the
right lane was prohibited when it appeared that the sign therefore was still far off and not readily
visible to the naked eye; that nonetheless, he introduced himself as the authorized driver of the
undersigned, his son in fact, and showed to the accused the calling card of the undersigned with a
notation in (sic) the dorsal portion thereof introducing the bearer of the card and requesting for
assistance from law enforcers, and accordingly begged that he be allowed to proceed on his way
considering that there was no danger to limb, life and property occasioned by his alleged traffic
violation; that notwithstanding such introduction and plea, the accused confiscated the driver’s
license of the authorized driver, even bragging in the process that he did the same to somebody
who introduced himself as a lawyer the day before.
The aforementioned actuation of the accused, if true, is not only indicative of his arrogance and
deliberate disregard of the usual respect, courtesy and accommodation accorded to a court of law
and/or its representative but is one constitutive of indirect contempt under Section 3, paragraphs
(c) and (d) of Rule 71 of the Rules of Court, specially considering that the authorized driver of the
Presiding Judge of this Court was then on official errand.
WHEREFORE, within a non-extendible period of twenty-four (24) hours from receipt hereof, the
accused is ordered to show cause why he should not be cited as in contempt of court and dealt with
accordingly. The Branch Sheriff of this Court is authorized and ordered to serve a copy of this
Order upon the accused immediately and to make a return of his proceedings thereon. After receipt
of this Order, the accused is ordered to personally file his comment in Court, within the period
allowed him herein.
SO ORDERED.4
Because of the complainant’s failure to appear before the respondent judge as directed, the latter, after
verifying that the said order was duly served on the complainant, issued another Order 5 dated September 22,
1999 for the complainant’s arrest and commitment, and for the latter to appear for hearing before his sala on
September 29, 1999. The respondent sheriff then served the order on the complainant. On the scheduled
hearing, the complainant appeared and executed an affidavit 6 admitting to the court that he made a mistake
489
and that it was all a misunderstanding. The respondent judge, thereafter, lifted the September 22, 1999
Order.7
In his complaint, the complainant alleged inter alia the following:
6. That on September 28, 1999, at around 6:00 P.M., the undersigned complainant was greatly
surprised when respondent TEODORO ALVAREZ came and arrested him without any warrant of
arrest, only on orders of the respondent Judge, and he was ordered to board a motor vehicle and
was brought to the respondent Judge in Las Piñas City who ordered him detained in the Las Piñas
City Jail. When he was arrested, he was not able to call his family to inform them where he was
because he failed to return home in the evening;
7. That the next day, September 29, 1999, respondent Teodoro Alvarez informed him that there
will be a hearing of his indirect contempt charge before the sala of the respondent Judge in Las
Piñas City. During the hearing, the complainant was made to admit by the respondent Judge that he
made a mistake in apprehending his driver-son[,] conscious that he committed the gravest abuse of
his authority, and perhaps in anticipation of the legal action the undersigned complainant may take
against him after he is discharged from detention. Thus, after the complainant admitted his
mistakes under duress, and upon appeal by his counsel assuring the respondent Judge that the same
incident may not be repeated, the complainant was ordered discharged from detention at around
3:30 P.M. on September 29, 1999;
8. That the undersigned complainant did not know of any offense he had committed, except for his
issuing a traffic violation receipt to the driver-son of the respondent Judge which he is tasked by
law to do so for those found violating traffic rules and regulations;
9. That if the act of issuing a traffic violation receipt for a traffic violation within the city limits of
Mandaluyong City by the complainant is considered by the respondents as an offense, then
complainant should be tried for the said offense in Mandaluyong City, and not in Las Piñas City
where the respondent judge has no jurisdiction;
10. That to the ordinary and lowly understanding of the undersigned complainant, the acts of
respondents in arresting him without any warrant of arrest before a charge of indirect contempt is
heard constitute the gravest ABUSE OF AUTHORITY ever committed by the respondents; and
11. That the manner the respondents are administering justice in Las Piñas City is despotic and
barbaric in the sense that they take the law into their own hands without due regard for the rights of
the others.8
The complainant, thus, prayed that the respondents be summarily dismissed from the service.
In his comment, the respondent judge vehemently denied the accusations against him, contending that he
was merely preserving the dignity and honor due to the courts of law. The respondent narrated that on
September 8, 1999, he ordered his son, Jose R. Caoibes III, to go to the Pasig City Regional Trial Court to
secure certain records. While on his way there, he was flagged down by the complainant for an alleged
traffic violation. Caoibes III explained to the complainant that he was on an errand for his father, the
respondent judge, to which the complainant reportedly uttered, "Walang Judge, Judge Caoibes sa akin;
kahapon nga, abogado ang hinuli ko."
The respondent judge also alleged that he initiated the complaint for contempt pursuant to the following
provisions of the Revised Rules of Court: a) Section 3(d) and Section 4 of Rule 71; b) Section 5(c) of Rule
135; and, c) the last paragraph of Section 3 of Rule 71.
According to the respondent judge, the complainant’s allegation that he failed to contact any relative is
belied by the fact that during the hearing of September 29, 1999, the complainant was assisted by Atty.
Eduardo P. Flores of the MMDA, as evidenced by the transcript of stenographic notes9 taken during the
proceedings. The respondent prayed that the instant complaint be dismissed for lack of legal or factual basis.
For his part, the respondent sheriff admitted that he personally served copies of the respondent judge’s
orders on the complainant, but averred that he was merely performing his duties as deputy sheriff of the
court. As such, he did not commit grave abuse of authority in the performance of his functions. 10
Thereafter, the complainant executed a Sinumpaang Salaysay ng Pagbawi ng Reklamo dated November 26,
2002, where he indicated that he was no longer interested in pursuing the administrative complaint against
the respondent judge. The complainant recanted his earlier claim, averring that the respondent judge’s son
did not in fact enter a one-way street and that he was standing by the September 29, 1999 Affidavit he
executed during the hearing. He then requested that his complaint be duly withdrawn. 11
Pursuant to the recommendation12 of the Court Administrator, the Court, in a Resolution13 dated April 2,
2003, resolved to (a) dismiss the instant administrative complaint against Sheriff Teodoro Alvarez for lack
of merit; and (b) refer the matter against respondent Judge Caoibes, Jr. to the Presiding Justice of the Court
of Appeals for raffle among the Associate Justices of the Court, and for investigation, report and
recommendation. The case was, thereafter, raffled to Associate Justice Lucas P. Bersamin. The Investigating
Justice, thereafter, submitted his Sealed Report dated February 26, 2004.
According to the Investigating Justice, although the complainant never appeared to prove the charges against
the respondent judge, the facts averred in the complaint appear to be substantially correct and true. Thus, the
respondent judge abused his authority to charge and punish any person for indirect contempt under Rule 71
of the Rules of Civil Procedure.14 The Investigating Justice recommended that the respondent be
admonished and warned, pursuant to Section 10(1), Rule 140 of the Rules of Court, and Section 11(c) of the
same rule.
The respondent judge anchors the justification of his acts against the complainant on Section 3, Rule 71 of
the Rules of Civil Procedure, viz:
Sec. 3. Indirect contempt to be punished after charge and hearing. – After a charge in writing has
been filed, and an opportunity given to the respondent to comment thereon within such period as
may be fixed by the court and to be heard by himself or counsel, a person guilty of any of the
following acts may be punished for indirect contempt:
(a) Misbehavior of an officer of a court in the performance of his official duties or in his
official transactions;
(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court,
including the act of a person who, after being dispossessed or ejected from any real
property by the judgment or process of any court of competent jurisdiction, enters or
attempts or induces another to enter into or upon such real property, for the purpose of
executing acts of ownership or possession, or in any manner disturbs the possession given
to the person adjudged to be entitled thereto;
(c) Any abuse of or any unlawful interference with the processes or proceedings of a
court not constituting direct contempt under section 1 of this Rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade
the administration of justice;
(e) Assuming to be an attorney or an officer of a court, and acting as such without
authority;
(f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or property in the custody of an officer
by virtue of an order or process of a court held by him.
But nothing in this section shall be so construed as to prevent the court from issuing process to bring the
respondent into court, or from holding him in custody pending such proceedings.
Thus, the power to declare a person in contempt of court and in dealing with him accordingly is an inherent
power lodged in courts of justice, to be used as a means to protect and preserve the dignity of the court, the
solemnity of the proceedings therein, and the administration of justice from callous misbehavior, offensive
personalities, and contumacious refusal to comply with court orders. 15 Indeed, the power of contempt is
power assumed by a court or judge to coerce cooperation and punish disobedience, disrespect or interference
with the court’s orderly process by exacting summary punishment. The contempt power was given to the
courts in trust for the public, by tradition and necessity, in as much as respect for the courts, which are
490
ordained to administer the laws which are necessary to the good order of society, is as necessary as respect
for the laws themselves.16 And, as in all other powers of the court, the contempt power, however plenary it
may seem, must be exercised judiciously and sparingly.17 A judge should never allow himself to be moved
by pride, prejudice, passion, or pettiness in the performance of his duties. 18
At first blush, it would seem that the respondent judge was justified in holding the complainant for
contempt, due to the latter’s refusal to comply with the judge’s Order of September 15, 1999. However, it is
not lost upon this Court that the complainant was not a party to any of the cases pending before the RTC,
Branch 253. What triggered the contempt charge was, in fact, the traffic violation incident involving the
respondent judge’s son. Furthermore, the record shows that when the complainant filed his reply to the
charge as required by the respondent judge, the same was refused by some staff member in the
latter’s sala.19
In Cortes v. Bangalan,20 we held that a judge may not hold a party in contempt of court for expressing
concern on the judge’s impartiality through a motion for voluntary inhibition, even if the latter may have felt
insulted therein. The Court also declared, thus:
…[W]hile the power to punish in contempt is inherent in all courts so as to preserve order in
judicial proceedings and to uphold due administration of justice, judges, however, should exercise
their contempt powers judiciously and sparingly, with utmost restraint, and with the end in view of
utilizing their contempt powers for correction and preservation not for retaliation and vindication. 21
We agree with the Investigating Justice when he opined that the respondent judge should have refrained
from ordering the arrest and detention of the complainant, since the incident involved his own son, and the
matter was very personal to him. The fact that the respondent judge insisted that the complainant personally
file his comment in court gives rise to doubts as to the motive behind it; as the Investigating Justice puts it,
the requirement of personal filing was deliberately inserted so that the respondent could confront and harass
the complainant.22
We also agree with the following ruminations of Justice Bersamin:
…[T]he respondent judge obviously resented the refusal of Sison to let off Caoibes III from the
traffic violation apprehension. The refusal of Sison was apparently aggravated by the son’s
reporting to the father that Sison had supposedly made the remarks of Walang judge, judge
Caoibes sa akin; Kahapon nga, abogado ang hinuli ko. …
...
The respondent Judge was not justified to so consider the act and remarks of Sison as thereby
displaying arrogance towards and deliberate disregard of the usual respect, courtesy and
accommodation due to a court of law and its representative. First of all, the refusal of Sison and the
supposed remarks should not cause resentment on the part of the respondent Judge (whom Sison
most likely did not yet know at the time) because he knew, as a public official himself, that Sison
was only doing his duty of enforcing evenly the particular traffic regulation against swerving into a
one-way street from the wrong direction, regardless of the office or position of the violator’s
father. Secondly, the respondent Judge should have had the circumspection expected of him as a
judge to realize that the remarks of Sison were invited by Caoibes III’s attempt to bluffhis way out
of the apprehension because he was the son of an RTC judge. Hence, the respondent Judge would
have no grounds to cite Sison for contempt of court. And, thirdly, the respondent Judge and his son
should have challenged the issuance of the traffic violation receipt pursuant to the pertinent rules if
they did not agree with the basis of the apprehension and also administratively charged Sison for
any unwarranted act committed. Since neither was done by them, but, on the contrary, both
ultimately accepted the validity of the apprehension, as borne out by the retrieval of the driver’s
license after September 29, 1999 by paying the fines corresponding to the traffic violation, then it
follows that the respondent Judge had the consciousness that his son was at fault, instead of Sison.
…[T]he respondent Judge claimed at the hearing that his son "was at that time working with (sic)
me as my personal driver;" and that his errand was to secure some papers from the Regional Trial
 Court in Pasig City involved in a "personal case" which the respondent Judge had "filed against a
bank for specific performance and damages, and since I just suffered a mild stroke at that time,
specifically on June 10, 1999, and the incident took place (sic) September, I could not at that time
personally go to Pasig to secure the documents I needed for the next hearing of the case so I had to
send my son."
The foregoing renders clear that the respondent Judge had no legitimate basis by which to consider
Sison’s apprehension of his son as indirect contempt. As indicated earlier, the act complained
against must be any of those specified in Sec. 3, Rule 71, 1997 Rules of Civil Procedure;
otherwise, there is no contempt of court, which requires that the person obstructed should be
performing a duty connected with judicial functions. As such, the respondent Judge acted
oppressively and vindictively.
Parenthetically, it is odd that the respondent Judge would even propose herein that Caoibes III,
already 25 years at the time of the apprehension, was serving his father as the latter’s personal
driver, albeit not officially employed in the Judiciary. Most likely, therefore, Caoibes III might not
be doing anything for his father at the time of his apprehension but was in the place for his own
purposes.23
The act of a judge in citing a person in contempt of court in a manner which smacks of retaliation, as in the
case at bar, is appalling and violative of Rule 2.01 of the Code of Judicial Conduct which mandates that "a
judge should so behave at all times to promote public confidence in the integrity and impartiality of the
judiciary."24 The very delicate function of administering justice demands that a judge should conduct
himself at all times in a manner which would reasonably merit the respect and confidence of the people, for
he is the visible representation of the law.25 The irresponsible or improper conduct of judges erodes public
confidence in the judiciary; as such, a judge must avoid all impropriety and the appearance thereof.26
We do not agree, however, that the respondent judge should be merely reprimanded for his actuations. The
Court has not been blind to the improper use by judges of the erstwhile inherent power of contempt which,
in fine, amounts to grave abuse of authority. The penalty imposed by the Court in such cases ranges from a
fine of P2,500;27 one month’s salary;28 suspension from the service without pay for a period of three
months;29 and even the ultimate penalty of dismissal from the service.30
Furthermore, we take judicial notice that the respondent judge was previously sanctioned by the Court for
violating Canon 2 of the Code of Judicial Conduct, where he was meted a fine of P20,000. 31 He was found
guilty of serious impropriety unbecoming a judge, for delivering fistic blows on a complainant judge. To our
mind, the instant case falls under "similar conduct," which the Court avowed would be dealt with more
severely if repeated, and of which the respondent was duly warned. The respondent was, likewise, found
guilty of gross ignorance of procedural law and unreasonable delay in the issuance of an order of execution,
where he was meted a fine of P30,000;32 and delay in resolving a motion to dismiss in a civil case pending
before his sala where he was, likewise, fined P40,000.33
WHEREFORE, the Court finds respondent Judge Jose F. Caoibes, Jr., Regional Trial Court of Las Piñas
City, Branch 253, GUILTY of serious impropriety unbecoming a judge for violating Canon 2 of the Code of
Judicial Conduct, and is hereby DISMISSED from the service with forfeiture of all retirement benefits
except accrued leave credits, with prejudice to re-employment in any branch of the government or any of its
instrumentalities including government-owned and controlled corporations.
This decision is immediately executory. The respondent is ORDERED to cease and desist from discharging
the functions of his Office. Let a copy of this Decision be entered in the respondent’s personnel records.
SO ORDERED.

491
 FIRST DIVISION
G.R. No. 150949 June 21, 2007
JUDGE DOLORES L. ESPAÑOL,* Presiding Judge, Regional Trial Court, Branch 90, Dasmariñas,
Cavite,petitioner,
vs.
ATTY. BENJAMIN S. FORMOSO and SPOUSES BENITO SEE and MARLY SEE, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is a Petition for Review on Certiorari assailing the Decision1 dated September 12, 2001 and
Resolution dated November 15, 2001 of the Court of Appeals in CA-G.R. SP No. 65652.
The facts are:
On April 15, 1994, Sharcons Builders Philippines, Inc. (Sharcons) bought from Evanswinda Morales a piece
of land consisting of 33,130 square meters in Paliparan, Dasmariñas, Cavite. The property is covered by
Transfer Certificate of Title (TCT) No. T-278479 issued in her name by the Register of Deeds of Trece
Martires City.
Thus, TCT No. T-278479 in Evanswinda’s name was cancelled and in lieu thereof, TCT No. T-511462 was
issued in the name of Sharcons. However, when the latter’s workers tried to fence and take possession of the
lot, they were prevented by the caretaker of spouses Joseph and Enriqueta Mapua. The caretaker claimed
that spouses Mapua are the owners of the land. Sharcons verified the status of the title and found that TCT
No. T-107163 was indeed registered in the names of spouses Mapua as early as July 13, 1979.
On January 25, 2000, Sharcons filed with the Regional Trial Court (RTC), Branch 90, Dasmariñas, Cavite a
complaint for quieting of title, docketed as Civil Case No. 2035-00. Impleaded as defendants were spouses
Mapua, Evanswinda Morales, and the Register of Deeds of Trece Martires City.
In their answer, spouses Mapua alleged, among others, that all the documents relied upon by Sharcons are
spurious and falsified.
In the course of the proceedings, or on July 9, 2001, Judge Dolores L. Español, petitioner, issued an Order
stating that Benito See and Marly See, president and treasurer, respectively, of Sharcons, and its counsel,
Atty. Benjamin Formoso, respondents, have used a spurious certificate of title and tax declaration when it
(Sharcons) filed with the RTC its complaint for quieting of title. Consequently, petitioner declared
respondents guilty of direct contempt of court and ordered their confinement for ten (10) days in the
municipal jail of Dasmariñas, Cavite.
Petitioner’s Order is partly reproduced as follows:
From the foregoing circumstances, this Court is of the view and so holds that the instant case is a
callous and blatant imposition of lies, falsehoods, deceptions, and fraudulent manipulations,
through the extensive use of falsified documents by the plaintiff corporation and its former
counsel, Atty. Benjamin S. Formoso, defendant Evanswinda C. Morales and even the Geodetic
Engineer who connived with this private group on one hand, and some officials and employees of
the government agencies responsible for the processing and issuance of spurious or falsified titles,
on the other. Unless these fraudulent operations are put to a complete and drastic halt, the Courts
are at the mercy of these unscrupulous people for their own personal gain.
Using the presumption that whoever is in possession and user of falsified document is the forger
thereof (Gamido v. Court of Appeals, 25 SCRA 101 [1995]), let the appropriate falsification
charges be filed against Benito See and Marly See together with Evanswinda C. Morales. Thus, let
a copy of this Order be forwarded to the National Bureau of Investigation and the Department of
Justice for their appropriate action. As regards Atty. Benjamin S. Formoso, let a copy of this Order
be forwarded to the Bar Confidant’s Office, Supreme Court. Manila.
Further, Benito See and Marly See, President and Treasurer of Sharcons Builders Phils. Inc.,
respectively, and Atty. Benjamin S. Formoso, counsel for Sharcons until March 13, 2001, are
declared and held in contempt for foisting falsehoods and using falsified and spurious documents
492
in the pursuit of their nefarious activities pursuant to the instant case filed before this Court. Let the
corresponding Warrants of Arrest be issued against the aforesaid respondents who should serve ten
(10) days of detention at the Dasmariñas Municipal Jail, Cavite.
Likewise, the title issued to Sharcons Builders Philippines, Inc., under TCT No. T-511462
allegedly issued on November 11, 1994, being spurious, is hereby cancelled, it having been
derived from another spurious title with TCT No. T-278479 allegedly issued to Evanswinda C.
Morales on December 29, 1989. The Declaration of Real Property No. 4736 is likewise hereby
cancelled for being spurious. Let a copy of this Order be forwarded to the Registry of Deeds for its
implementation with respect to the two (2) titles for cancellation and to the Assessor’s Office of
the Municipality of Dasmariñas, Cavite, to stave off the proliferation of these spurious instruments.
WHEREFORE, in view of the foregoing, the instant case is DISMISSED WITH PREJUDICE,
whereas, the private defendant’s counterclaims, which need further substantiation, are likewise
dismissed. However, the said private defendants are not precluded from pursuing their rightful
course(s) of action in the interest of justice.
SO ORDERED.
Petitioner stated that in determining the merits of Sharcons' complaint for quieting of title, she "stumbled"
upon Civil Case No. 623-92 for cancellation of title and damages filed with the RTC, Branch 20, Imus,
Cavite, presided by then Judge Lucenito N. Tagle. 2 Petitioner then took judicial notice of the judge’s
Decision declaring that Sharcons' TCT and other supporting documents are falsified and that respondents are
responsible therefor.
On July 12, 2001, petitioner issued warrants of arrest against respondents. They were confined in the
municipal jail of Dasmariñas, Cavite. That same day, respondents filed a motion for bail and a motion to lift
the order of arrest. But they were denied outright by petitioner.
Respondents then filed with the Court of Appeals a petition for a writ of habeas corpus, docketed as CA-
G.R. SP No. 65652. On July 19, 2001, the Court of Appeals granted the petition.
On September 12, 2001, the Court of Appeals promulgated its Decision, the dispositive portion of which
reads:
IN THE LIGHT OF ALL THE FOREGOING, finding the instant petition to be meritorious, the
same is hereby GRANTED. Respondent judge’s July 9, 2001 Order, insofar as it declared herein
petitioners in direct contempt and ordered their incarceration for ten (10) days, as well as the
Warrant of Arrest, dated July 12, 2001, and the Order of Commitment, dated July 13, 2001, which
the respondent judge issued against the persons of the herein petitioners, are hereby NULLIFIED
and SET ASIDE.
SO ORDERED.
The Court of Appeals ruled that Judge Español erred in taking cognizance of the Decision rendered by then
Judge Tagle in Civil Case No. 623-92 since it was not offered in evidence in Civil Case No. 2035-00 for
quieting of title. Moreover, as the direct contempt of court is criminal in nature, petitioner should have
conducted a hearing. Thus, she could have determined whether respondents are guilty as charged.
Petitioner filed a motion for reconsideration but the Court of Appeals denied the same in its Resolution of
November 15, 2001.
Hence, this petition.
The basic question before us is whether petitioner erred in ruling that respondents are guilty of direct
contempt of court for using falsified documents when Sharcons filed its complaint for quieting of title.
The early case of In re Jones3 defined contempt of court as "some act or conduct which tends to interfere
with the business of the court, by a refusal to obey some lawful order of the court, or some act of disrespect
to the dignity of the court which in some way tends to interfere with or hamper the orderly proceedings of
the court and thus lessens the general efficiency of the same." It has also been described as "a defiance of the
authority, justice or dignity of the court; such conduct as tends to bring the authority and administration of
the law into disrespect or to interfere with or prejudice parties litigants or their witnesses during
litigation."4 Simply put, it is despising of the authority, justice, or dignity of the court. 5
The offense of contempt traces its origin to that time in England when all courts in the realm were but
divisions of the Curia Regia, the supreme court of the monarch, and to scandalize a court was an affront to
the sovereign.6 This concept was adopted by the Americans and brought to our shores with modifications. In
this jurisdiction, it is now recognized that courts have the inherent power to punish for contempt on the
ground that respect for the courts guarantees the very stability of the judicial institution. 7 Such stability is
essential to the preservation of order in judicial proceedings, to the enforcement of judgments, orders, and
mandates of the courts, and, consequently, to the very administration of justice. 8
Rule 71 of the 1997 Rules of Civil Procedure, as amended, provides:
SEC. 1. Direct contempt punished summarily. – A person guilty of misbehavior in the presence of
or so near a court as to obstruct or interrupt the proceedings before the same, including disrespect
toward the court, offensive personalities toward others, or refusal to be sworn or to answer as a
witness, or to subscribe an affidavit or deposition when lawfully required to do so, may be
summarily adjudged in contempt by such court and punished by a fine not exceeding two thousand
pesos or imprisonment not exceeding ten (10) days, or both, if it be a Regional Trial Court or a
court of equivalent or higher rank, or by a fine not exceeding two hundred pesos or imprisonment,
not exceeding one (1) day, or both, if it be a lower court.
In Narcida v. Bowen,9 this Court characterized direct contempt as one done "in the presence of or so near the
court or judge as to obstruct the administration of justice." It is a contumacious act done facie curiae and
may be punished summarily without hearing.10 In other words, one may be summarily adjudged in direct
contempt at the very moment or at the very instance of the commission of the act of contumely.
Section 3, Rule 71 of the same Rules states:
SEC. 3. Indirect contempt to be punished after charge and hearing. – After a charge in writing has
been filed and an opportunity given to the respondent to comment thereon within such period as
may be fixed by the court and to be heard by himself or by counsel, a person guilty of any of the
following acts may be punished for indirect contempt:
(a) Misbehavior of an officer of court in the performance of his official duties or in his official
transactions;
(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court, including
the act of a person who, after being dispossessed or ejected from any real property by the judgment
or process of any court of competent jurisdiction, enters or attempts or induces another to enter
into or upon such real property, for the purpose of executing acts of ownership or possession, or in
any manner disturbs the possession given to the person adjudged to be entitled thereto;
(c) Any abuse of or any unlawful interference with the processes or proceedings of a court not
constituting direct contempt under Section 1 of this Rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the
administration of justice;
(e) Assuming to be an attorney or an officer of a court and acting as such without authority;
(f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of
an order or process of a court held by him.
But nothing in this section shall be so construed as to prevent the court from issuing process to
bring the respondent into court, or from holding him in custody pending such proceedings.
Indirect or constructive contempt, in turn, is one perpetrated outside of the sitting of the court and may
include misbehavior of an officer of a court in the performance of his official duties or in his official
transactions, disobedience of or resistance to a lawful writ, process, order, judgment, or command of a court,
or injunction granted by a court or a judge, any abuse or any unlawful interference with the process or
493
proceedings of a court not constituting direct contempt, or any improper conduct tending directly or
indirectly to impede, obstruct or degrade the administration of justice. 11
We agree with petitioner that the use of falsified and forged documents is a contumacious act. However, it
constitutes indirect contempt not direct contempt. Pursuant to the above provision, such act is an improper
conduct which degrades the administration of justice. In Santos v. Court of First Instance of Cebu, Branch
VI,12 we ruled that the imputed use of a falsified document, more so where the falsity of the document is not
apparent on its face, merely constitutes indirect contempt, and as such is subject to such defenses as the
accused may raise in the proper proceedings. Thus, following Section 3, Rule 71, a contemner may be
punished only after a charge in writing has been filed, and an opportunity has been given to the accused to
be heard by himself and counsel.13 Moreover, settled is the rule that a contempt proceeding is not a civil
action, but a separate proceeding of a criminal nature in which the court exercises limited
jurisdiction.14 Thus, the modes of procedure and the rules of evidence in contempt proceedings are
assimilated as far as practicable to those adapted to criminal prosecutions. 15 Perforce, petitioner judge erred
in declaring summarily that respondents are guilty of direct contempt and ordering their incarceration. She
should have conducted a hearing with notice to respondents.
Petitioner, in convicting respondents for direct contempt of court, took judicial notice of the Decision in
Civil Case No. 623-92, assigned to another RTC branch, presided by then Judge Tagle. Section 1, Rule 129
of the Revised Rules of Court provides:
SEC. 1. Judicial notice, when mandatory. – A court shall take judicial notice, without the
introduction of evidence, of the existence and territorial extent of states, their political history,
forms of government, and symbols of nationality, the law of nations, the admiralty and maritime
courts of the world and their seals, the political constitution and history of the Philippines, the
official acts of the legislative, executive and judicial departments of the Philippines, the laws of
nature, the measure of time, and the geographical divisions.
In Gener v. De Leon,16 we held that courts are not authorized to take judicial notice of the contents of
records of other cases even when such cases have been tried or pending in the same court. Hence, we
reiterate that petitioner took judicial notice of the Decision rendered by another RTC branch and on the basis
thereof, concluded that respondents used falsified documents (such as land title and tax declaration) when
Sharcons filed its complaint for quieting. Verily, the Court of Appeals did not err in ruling that respondents
are not guilty of direct contempt of court.
Meanwhile, the instant petition challenging the Decision of the Court of Appeals granting the writ of habeas
corpusin favor of respondents has become moot. We recall that respondents were released after posting the
required bail as ordered by the Court of Appeals. A writ of habeas corpus will not lie on behalf of a person
who is not actually restrained of his liberty. And a person discharged on bail is not restrained of his liberty
as to be entitled to a writ of habeas corpus.17
WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 65652 are AFFIRMED. No costs.
SO ORDERED.
 THIRD DIVISION
G.R. No. 205956 February 12, 2014
P/SUPT. HANSEL M. MARANTAN, Petitioner,
vs.
ATTY. JOSE MANUEL DIOKNO and MONIQUE CU-UNJIENG LA'O, Respondents.
RESOLUTION
MENDOZA, J.:
Before the Court is a petition to cite respondents in contempt of Court.
Petitioner P/Supt. Hansel M. Marantan (Marantan) is the respondent in G.R. No. 199462, 1 a petition filed on
December 6, 2011, but already dismissed although the disposition is not yet final. Respondent Monique Cu-
Unjieng La'O (La ‘O) is one of the petitioners in the said case, while respondent Atty. Jose Manuel Diokno
(Atty. Diokno) is her counsel therein.
G.R. No. 199462 relates to Criminal Case Nos. 146413-PSG, 146414-PSG and 146415-PSG, entitled
"People of the Philippines v. P/SINSP Hansel M. Marantan, et al.," pending before the Regional Trial Court
of Pasig City, Branch 265 (RTC), where Marantan and his co-accused are charged with homicide. The
criminal cases involve an incident which transpired on November 7, 2005, where Anton Cu-Unjieng (son of
respondent La’O), Francis Xavier Manzano, and Brian Anthony Dulay, were shot and killed by police
officers in front of the AIC Gold Tower at Ortigas Center, which incident was captured by a television crew
from UNTV 37 (Ortigas incident).
In G.R. No. 199462, La’O, together with the other petitioners, prayed, among others, that the resolution of
the Office of the Ombudsman downgrading the charges from murder to homicide be annulled and set aside;
that the corresponding informations for homicide be withdrawn; and that charges for murder be filed.
In the meantime, on January 6, 2013, a shooting incident occurred in Barangay Lumutan, Municipality of
Atimonan, Province of Quezon, where Marantan was the ground commander in a police-military team,
which resulted in the death of thirteen (13) men (Atimonan incident). This encounter, according to
Marantan, elicited much negative publicity for him.
Marantan alleges that, riding on the unpopularity of the Atimonan incident, La’O and her counsel, Atty.
Diokno, and one Ernesto Manzano, organized and conducted a televised/radio broadcasted press conference.
During the press conference, they maliciously made intemperate and unreasonable comments on the conduct
of the Court in handling G.R. No. 199462, as well as contumacious comments on the merits of the criminal
cases before the RTC, branding Marantan and his co-accused guilty of murder in the Ortigas incident.
On January 29, 2013, this interview was featured in "TV Patrol," an ABS-CBN news program. Marantan
quotes2 a portion of the interview, as follows:
Atty. Diokno
So ang lumabas din sa video that the actual raw footage of the UNTV is very long. Ang nangyari, you see
the police officers may nilalagay sila sa loob ng sasakyan ng victims na parang pinapalabas nila that there
was a shootout pero ang nangyari na yon e tapos na, patay na.
Ernesto Manzano
Kung sinasabi nilang carnapper dapat huliin nilang buhay yong mga mahal naming sa buhay and kinasuhan
pero ang ginawa nila, sila mismo na ang nagbigay ng hatol.
Monique Cu-Unjieng La’o
Sinasabi nila na may kinarnap siya, tinutukan ng baril, hindi magagawa yong kasi kilala ko siya, anak ko
yon e x x x he is already so arrogant because they protected him all these years. They let him get away with
it. So even now, so confident of what he did, I mean confident of murdering so many innocent individuals.
Atty. Diokno
Despite the overwhelming evidence, however, Supt. Marantan and company have never been disciplined,
suspended or jailed for their participation in the Ortigas rubout, instead they were commended by their
superiors and some like Marantan were even promoted to our consternation and disgust. Ang problema po e
hangang ngayon, we filed a Petition in the Supreme Court December 6, 2011, humihingi po kami noon ng
494
Temporary Restraining Order, etc. – hangang ngayon wala pa pong action ang Supreme Court yong charge
kung tama ba yong pag charge ng homicide lamang e subalit kitang kita naman na they were killed
indiscriminately and maliciously.
Atty. Diokno
Eight years have passed since our love ones were murdered, but the policemen who killed them led by Supt.
Hansel Marantan the same man who is involved in the Atimonan killings – still roam free and remain
unpunished. Mr. President, while we are just humble citizens, we firmly believe that police rub-out will not
stop until you personally intervene.
Ernesto Manzano
Up to this date, we are still praying for justice.
Monique Cu-Unjieng La’o
Ilalaban namin ito no matter what it takes, we have the evidence with us, I mean everything shows that they
were murdered.
(Emphasis supplied by petitioner)
Marantan submits that the respondents violated the sub judice rule, making them liable for indirect contempt
under Section 3(d) of Rule 71 of the Rules of Court, for their contemptuous statements and improper
conduct tending directly or indirectly to impede, obstruct or degrade the administration of justice. He argues
that their pronouncements and malicious comments delved not only on the supposed inaction of the Court in
resolving the petitions filed, but also on the merits of the criminal cases before the RTC and prematurely
concluded that he and his co-accused are guilty of murder. It is Maranta’s position that the press conference
was organized by the respondents for the sole purpose of influencing the decision of the Court in the petition
filed before it and the outcome of the criminal cases before the RTC by drawing an ostensible parallelism
between the Ortigas incident and the Atimonan incident.
The respondents, in their Comment,3 argue that there was no violation of the sub judice rule as their
statements were legitimate expressions of their desires, hopes and opinions which were taken out of context
and did not actually impede, obstruct or degrade the administration of justice in a concrete way; that no
criminal intent was shown as the utterances were not on their face actionable being a fair comment of a
matter of public interest and concern; and that this petition is intended to stifle legitimate speech.
The petition must fail.
The sub judice rule restricts comments and disclosures pertaining to the judicial proceedings in order to
avoid prejudging the issue, influencing the court, or obstructing the administration of justice. A violation of
this rule may render one liable for indirect contempt under Sec. 3(d), Rule 71 of the Rules of Court, 4 which
reads:
Section 3. Indirect contempt to be punished after charge and hearing. – x x x a person guilty of any of the
following acts may be punished for indirect contempt:
xxx
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration
of justice[.]
The proceedings for punishment of indirect contempt are criminal in nature. 5 This form of contempt is
conduct that is directed against the dignity and authority of the court or a judge acting judicially; it is an act
obstructing the administration of justice which tends to bring the court into disrepute or disrespect. Intent is
a necessary element in criminal contempt, and no one can be punished for a criminal contempt unless the
evidence makes it clear that he intended to commit it.6
For a comment to be considered as contempt of court "it must really appear" that such does impede, interfere
with and embarrass the administration of justice.7 What is, thus, sought to be protected is the all-important
duty of the court to administer justice in the decision of a pending case. 8 The specific rationale for the sub
judice rule is that courts, in the decision of issues of fact and law should be immune from every extraneous
influence; that facts should be decided upon evidence produced in court; and that the determination of such
facts should be uninfluenced by bias, prejudice or sympathies. 91âwphi1
The power of contempt is inherent in all courts in order to allow them to conduct their business unhampered
by publications and comments which tend to impair the impartiality of their decisions or otherwise obstruct
the administration of justice. As important as the maintenance of freedom of speech, is the maintenance of
the independence of the Judiciary. The "clear and present danger" rule may serve as an aid in determining
the proper constitutional boundary between these two rights.10
The "clear and present danger" rule means that the evil consequence of the comment must be "extremely
serious and the degree of imminence extremely high" before an utterance can be punished. There must exist
a clear and present danger that the utterance will harm the administration of justice. Freedom of speech
should not be impaired through the exercise of the power of contempt of court unless there is no doubt that
the utterances in question make a serious and imminent threat to the administration of justice. It must
constitute an imminent, not merely a likely, threat.11
The contemptuous statements made by the respondents allegedly relate to the merits of the case, particularly
the guilt of petitioner, and the conduct of the Court as to its failure to decide G.R. No. 199462.
As to the merits, the comments seem to be what the respondents claim to be an expression of their opinion
that their loved ones were murdered by Marantan. This is merely a reiteration of their position in G.R. No.
199462, which precisely calls the Court to upgrade the charges from homicide to murder. The Court detects
no malice on the face of the said statements. The mere restatement of their argument in their petition cannot
actually, or does not even tend to, influence the Court.
As to the conduct of the Court, a review of the respondents' comments reveals that they were simply stating
that it had not yet resolved their petition. There was no complaint, express or implied, that an inordinate
amount of time had passed since the petition was filed without any action from the Court. There appears no
attack or insult on the dignity of the Court either.
"A public utterance or publication is not to be denied the constitutional protection of freedom of speech and
press merely because it concerns a judicial proceeding still pending in the cou1is, upon the theory that in
such a case, it must necessarily tend to obstruct the orderly and fair administration of justice." 12 By no
stretch of the imagination could the respondents' comments pose a serious and imminent threat to the
administration of justice. No criminal intent to impede, obstruct, or degrade the administration of justice can
be inferred from the comments of the respondents.
Freedom of public comment should, in borderline instances, weigh heavily against a possible tendency to
influence pending cases.13 The power to punish for contempt, being drastic and extraordinary in its nature,
should not be resorted to unless necessary in the interest of justice. 14 In the present case, such necessity is
wanting.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.

495
 SECOND DIVISION
A.M. No. RTJ-13-2366 [Formerly OCA IPI No. 11-3740-RTJ], February 04, 2015
JILL M. TORMIS, Complainant, v. JUDGE MEINRADO P. PAREDES, Respondent.
DECISION
MENDOZA, J.:
For consideration is the Report and Recommendation 1 of Justice Maria Elisa Sempio Diy (Justice Diy),
Court of Appeals, Cebu City, submitted to this Court pursuant to its January 14, 2013 Resolution, 2referring
the complaint filed by Jill M. Tormis (Jill) against respondent Judge Meinrado P. Paredes (Judge
Paredes), Presiding Judge, Branch 13, Regional Trial Court (RTC), Cebu City, for investigation, report and
recommendation.
The Facts
In her Affidavit/Complaint,3 dated September 5, 2011, Jill charged Judge Paredes with grave misconduct.
Jill was a student of Judge Paredes in Political Law Review during the first semester of school year 2010-
2011 at the Southwestern University, Cebu City. She averred that sometime in August 2010, in his class
discussions, Judge Paredes named her mother, Judge Rosabella Tormis (Judge Tormis), then Presiding
Judge of Branch 4, Municipal Trial Court in Cities (MTCC), Cebu City, as one of the judges involved in the
marriage scams in Cebu City. Judge Paredes also mentioned in his class that Judge Tormis was abusive of
her position as a judge, corrupt, and ignorant of the law.
Jill added that Judge Paredes included Judge Tormis in his discussions not only once but several times. In
one session, Judge Paredes was even said to have included in his discussion Francis Mondragon
Tormis (Francis), son of Judge Tormis, stating that he was a “court-noted addict.”4 She was absent from
class at that time, but one of her classmates who was present, Rhoda L. Litang (Rhoda), informed her about
the inclusion of her brother. To avoid humiliation in school, Jill decided to drop the class under Judge
Paredes and transfer to another law school in Tacloban City.
Jill also disclosed that in the case entitled “Trinidad O. Lachica v. Judge Tormis”5(Lachica v. Tormis), her
mother was suspended from the service for six (6) months for allegedly receiving payment of a cash bail
bond for the temporary release of an accused for the warrant she had issued in a case then pending before
her sala. Judge Paredes was the one who reviewed the findings conducted therein and he recommended that
the penalty be reduced to severe reprimand.
Jill, however, claimed that Judge Paredes committed an offense worse than that committed by her mother.
She averred that on March 13, 2011, Judge Paredes accepted a cash bail bond in the amount of Six
Thousand Pesos (P6,000.00) for the temporary release of one Lita Guioguio in a case entitled, “People of the
Philippines v. Lita Guioguio,” docketed as Criminal Case No. 148434-R,6 then pending before Branch 8,
MTCC, Cebu City (Guioguio case).
Thus, she prayed that Judge Paredes be administratively sanctioned for his actuations.
Comment of Judge Paredes
496
In his Comment,7 dated October 28, 2011, Judge Paredes denied the accusations of Jill. He stated that
Judge Tormis had several administrative cases, some of which he had investigated; that as a result of the
investigations, he recommended sanctions against Judge Tormis; that Judge Tormis used Jill, her daughter,
to get back at him; that he discussed in his class the case of Lachica v. Tormis, but never Judge Tormis’
involvement in the marriage scams nor her sanctions as a result of the investigation conducted by the Court;
that he never personally attacked Judge Tormis’ dignity and credibility; that the marriage scams in Cebu
City constituted a negative experience for all the judges and should be discussed so that other judges, court
employees and aspiring lawyers would not emulate such misdeeds; that the marriage scams were also
discussed during meetings of RTC judges and in schools where remedial law and legal ethics were taught;
that he talked about past and resolved cases, but not the negative tendencies of Judge Tormis; that there was
nothing wrong in discussing the administrative cases involving Judge Tormis because these cases were
known to the legal community and some were even published in the Supreme Court Reports Annotated
(SCRA) and other legal publications; and that when he was the executive judge tasked to investigate Judge
Tormis, he told her to mend her ways, but she resented his advice.
Judge Paredes further stated that when Jill was still his student, she did not complain about or dispute his
discussions in class regarding the administrative liabilities of her mother; that the matter was not also
brought to the attention of the Dean of Southwestern University or of the local authorities; that he admitted
saying that Judge Tormis had a son named Francis who was a drug addict and that drug dependents had no
place in the judiciary; and that he suggested that Francis should be removed from the judiciary.
He denied, however, having stated that Francis was appointed as court employee as a result of the influence
of Judge Tormis. She is not an influential person and it is the Supreme Court who determines the persons to
be appointed as court employees. Judge Tormis, however, allowed her drug dependent son to apply for a
position in the judiciary.
Regarding the specific act being complained of, Judge Paredes admitted that he personally accepted a cash
bail bond of P6,000.00 for the temporary release of Lita Guioguio on March 13, 2011. He claimed though
that the approval of the bail bond was in accordance with Section 14, Chapter 5 of A.M. No. 03-8-62-SC
which allowed executive judges to act on petitions for bail and other urgent matters on weekends, official
holidays and special days. Judge Paredes explained that he merely followed the procedure. As Executive
Judge, he issued a temporary receipt and on the following business day, a Monday, he instructed the Branch
Clerk of Court to remit the cash bond to the Clerk of Court. The Clerk of Court acknowledged the receipt of
the cash bond and issued an official receipt. It was not his fault that the Clerk of Court acknowledged the
receipt of the cash bond only in the afternoon of March 21, 2011.
Lastly, Judge Paredes averred that the discussions relative to the administrative cases of Judge Tormis could
not be the subject of an administrative complaint because it was not done in the performance of his judicial
duties.
Reply of the Complainant
In her Verified-Reply,8 dated November 23, 2011, Jill countered that her mother had nothing to do with the
filing of the present complaint; that she was forced to leave her family in Cebu City to continue her law
studies elsewhere because she could no longer bear the discriminating and judgmental eyes of her
classmates brought about by Judge Paredes’ frequent discussions in class of her mother’s administrative
cases; that her mother was indeed one of the judges implicated in the marriage scams, but when Judge
Paredes discussed the matter in his classes, the case of her mother was not yet resolved by the Court and,
thus, in 2010, it was still premature; and that Judge Paredes was aware that administrative cases were
confidential in nature.
Jill claimed that the intention to humiliate her family was evident when Judge Paredes branded her brother,
Francis, as a “drug addict.”
Rejoinder of Judge Paredes
In his Rejoinder,9 dated December 2, 2011, Judge Paredes asserted that it was not premature to discuss the
marriage scams in class because the scandal was already disclosed by Atty. Rullyn Garcia and was also
written in many legal publications, and that the drug addiction of Francis was known in the Palace of Justice
of Cebu City.
In its Report,10 dated September 12, 2012, the Office of the Court Administrator (OCA) stated that the
conflicting allegations by the parties presented factual issues that could not be resolved based on the
evidence on record then. Considering the gravity and the sensitive nature of the charges, a full-blown
investigation should be conducted by the CA.
On January 14, 2013, pursuant to the recommendation of the OCA, the Court referred the administrative
complaint to the Executive Justice of the CA, Cebu Station, for investigation, report and recommendation
within sixty (60) days from receipt of the records. 11chanRoblesvirtualLawlibrary
On March 26, 2013, the case was raffled to, and the records were received by, Justice Diy. Thereafter, the
appropriate notices were issued and the confidential hearings were conducted. Afterwards, Justice Diy
received the respective memoranda of the parties.
In her memorandum,12 Jill contended that Judge Paredes’ act of discussing Judge Tormis’ cases in class
where she was present was an open display of insensitivity, impropriety and lack of delicadeza bordering on
oppressive and abusive conduct, which fell short of the exacting standards of behavior demanded of
magistrates. She asserted that the defense of Judge Paredes that he could not be made administratively
liable as the act was not made in the performance of his official duties did not hold water because a judge
should be the embodiment of what was just and fair not only in the performance of his official duties but
also in his everyday life.
Jill also averred that Judge Paredes violated the subjudice rule when he discussed the marriage scam
involving Judge Tormis in 2010 because at that time, the case was still being investigated; that the
administrative case relative to the marriage scam was decided only on April 2, 2013; that Judge Paredes was
not the Executive Judge of the MTCC when he received the cash bail bond in the Guiguio case; that he
could not prove that the executive judge of the MTCC was unavailable before accepting the cash bail bond;
and that the assertion of Judge Paredes of his being an anti-corruption judge and a lone nominee of the IBP
Cebu City Chapter to the Foundation of Judicial Excellence did not exculpate him from committing the acts
complained of.
In his Reply-Memorandum,13 Judge Paredes reiterated the allegations contained in his previous pleadings.
He added that the marriage scams scandalized the Judiciary and became public knowledge when Atty.
Rullyn Garcia of the OCA held a press conference on the matter; that, hence, every citizen, including him,
may comment thereon; that in the hierarchy of rights, freedom of speech and expression ranked high; that
Judge Tormis never intervened in the present case; that if he indeed made derogatory remarks against Judge
Tormis, she should have filed a criminal action for oral defamation; and that calling for the ouster of drug
addicts could not be considered an abuse, but was meant for the protection of the
497
Judiciary.14chanRoblesvirtualLawlibrary
In her Report and Recommendation, Justice Diy found Judge Paredes guilty of conduct unbecoming of a
judge. She opined that his use of intemperate language during class discussions was inappropriate. His
statements in class, tending to project Judge Tormis as corrupt and ignorant of the laws and procedure, were
obviously and clearly insensitive and inexcusable.
Justice Diy disregarded the defense of Judge Paredes that his discussions of the administrative case of Judge
Tormis in class was an exercise of his right to freedom of expression. She cited the New Code of Judicial
Conduct for the Philippine Judiciary15 which urged members of the Judiciary to be models of propriety at all
times. She quoted with emphasis Section 6 which stated that “Judges, like any other citizen, are entitled to
freedom of expression, belief, association and assembly, but in exercising such rights, they shall always
conduct themselves in such a manner as to preserve the dignity of the judicial office and the impartiality and
independence of the judiciary.”16chanRoblesvirtualLawlibrary
Justice Diy likewise rejected Judge Paredes’ position that he could not be held administratively liable for his
comments against Judge Tormis and Francis as these were uttered while he was not in the exercise of his
judicial functions. Jurisprudence,17 as well as the New Code of Judicial Conduct, required that he conduct
himself beyond reproach, not only in the discharge of his judicial functions, but also in his other professional
endeavors and everyday activities.
Justice Diy found merit in Jill’s allegation that Judge Paredes violated the subjudice rule when the latter
discussed the marriage scams involving Judge Tormis in 2010 when the said issue was still being
investigated. She cited, as basis for Judge Paredes’ liability, Section 4, Canon 3 of the New Code of Judicial
Conduct.
As regards Judge Paredes’ receipt of the cash bail bond in relation to the Guioguio case, Justice Diy
absolved him of any liability as the charge of grave misconduct was not supported by sufficient evidence.
She accepted Judge Paredes’ explanation that he merely followed the procedure laid down in Section 14,
Chapter 5 of A.M. No. 03-8-02-SC when he approved the bail bond.
Based on these findings, Justice Diy came up with the following recommendations,
thus:chanroblesvirtuallawlibrary
The undersigned Investigating Justice finds that indeed Judge Paredes is guilty of conduct unbecoming of a
judge. Conduct unbecoming of a judge is classified as a light offense under Section 10, Rule 140 of the
Revised Rules of Court, penalized under Section 11 (c) thereof by any of the following: (1) a Fine of not less
than P1,000.00 but not exceeding P10,000.00; (2) Censure; (3) Reprimand; and (4) Admonition with
warning.
Inasmuch as this is Judge Paredes’ first offense and considering the factual milieu and the peculiar
circumstances attendant thereto, it is respectfully recommended that Judge Paredes be meted out with the
penalty of REPRIMAND with a warning that a repetition of the same or a similar offense will be dealt with
more severely.18
The Court’s Ruling
The Court adopts the findings and recommendations of Justice Diy except as to the penalty.
Misconduct is defined as a transgression of some established and definite rule of action, more particularly,
unlawful behavior or gross negligence by a public officer. The misconduct is grave if it involves any of the
additional elements of corruption, willful intent to violate the law, or to disregard established rules, which
must be established by substantial evidence. As distinguished from simple misconduct, the elements of
corruption, clear intent to violate the law, or flagrant disregard of established rule, must be manifest in a
charge of grave misconduct. Corruption, as an element of grave misconduct, consists in the act of an official
or fiduciary person who unlawfully and wrongfully uses his station or character to procure some benefit for
himself or for another person, contrary to duty and the rights of others. 19chanRoblesvirtualLawlibrary
To constitute misconduct, the act or acts must have a direct relation to and be connected with the
performance of his official duties.20 Considering that the acts complained of, the remarks against Judge
Tormis and Francis, were made by Judge Paredes in his class discussions, they cannot be considered as
“misconduct.” They are simply not related to the discharge of his official functions as a judge. Thus, Judge
Paredes cannot be held liable for misconduct, much less for grave misconduct.
Discussion of a subjudice matter, however, is another thing.
On subjudice matters, Section 4, Canon 3 of the New Code of Judicial Conduct
provides:chanroblesvirtuallawlibrary
CANON 3
IMPARTIALITY
SEC. 4. Judges shall not knowingly, while a proceeding is before or could come before them, make any
comment that might reasonably be expected to affect the outcome of such proceeding or impair the manifest
fairness of the process. Nor shall judges make any comment in public or otherwise that might affect
the fair trial of any person or issue. (Emphasis supplied)
The subjudice rule restricts comments and disclosures pertaining to the judicial proceedings in order to
avoid prejudging the issue, influencing the court, or obstructing the administration of justice. 21 The rationale
for the rule was spelled out in Nestle Philippines, Inc. v. Sanchez,22 where it was stated that it is a traditional
conviction of civilized society everywhere that courts and juries, in the decision of issues of fact and law
should be immune from every extraneous influence; that facts should be decided upon evidence produced in
court; and that the determination of such facts should be uninfluenced by bias, prejudice or
sympathies.23chanRoblesvirtualLawlibrary
Notably, when Judge Paredes discussed the marriage scams involving Judge Tormis in 2010, the
investigation relative to the said case had not yet been concluded. In fact, the decision on the case was
promulgated by the Court only on April 2, 2013. 24 In 2010, he still could not make comments on the
administrative case to prevent any undue influence in its resolution. Commenting on the marriage scams,
where Judge Tormis was one of the judges involved, was in contravention of the subjudice rule. Justice Diy
was, therefore, correct in finding that Judge Paredes violated Section 4, Canon 3 of the New Code of
Judicial Conduct.
The Court shares the view of Justice Diy that although the reasons of Judge Paredes for discussing the
marriage scams in his classes seemed noble, his objectives were carried out insensitively and in bad taste.
The pendency of the administrative case of Judge Tormis and the publicity of the marriage scams did not
give Judge Paredes unrestrained license to criticize Judge Tormis in his class discussions. The publicity
given to the investigation of the said scams and the fact that it was widely discussed in legal circles let
people expressed critical opinions on the issue. There was no need for Judge Paredes to “rub salt to the
498
wound,”25 as Justice Diy put it.
Judge Paredes in using intemperate language and unnecessary comments tending to project Judge Tormis as
a corrupt and ignorant judge in his class discussions, was correctly found guilty of conduct unbecoming of a
judge by Justice Dy.
Indeed, the New Code of Judicial Conduct for the Philippine Judiciary requires judges to exemplify
propriety at all times. Canon 4 instructs:chanroblesvirtuallawlibrary
CANON 4
PROPRIETY
SEC. 1. Judges shall avoid impropriety and the appearance of impropriety in all of their activities.
xxx
SEC. 2. As a subject of constant public scrutiny, judges must accept personal restrictions that might be
viewed as burdensome by the ordinary citizen and should do so freely and willingly. In particular, judges
shall conduct themselves in a way that is consistent with the dignity of the judicial office.
A judge should always conduct himself in a manner that would preserve the dignity, independence and
respect for himself, the Court and the Judiciary as a whole. He must exhibit the hallmark judicial
temperament of utmost sobriety and self-restraint. He should choose his words and exercise more caution
and control in expressing himself. In other words, a judge should possess the virtue of gravitas.
Furthermore, a magistrate should not descend to the level of a sharp-tongued, ill-mannered petty tyrant by
uttering harsh words, snide remarks and sarcastic comments. He is required to always be temperate, patient
and courteous, both in conduct and in language. 26chanRoblesvirtualLawlibrary
In this case, records show that Judge Paredes failed to observe the propriety required by the Code and to use
temperate and courteous language befitting a magistrate. Indeed, Judge Paredes demonstrated conduct
unbecoming of a judge.
When Judge Paredes failed to restrain himself and included Francis, whose condition and personal
circumstances, as properly observed by Justice Diy, had no relevance to the topic that was then being
discussed in class, it strongly indicated his intention to taint their reputations.
The inclusion of Judge Tormis and Francis in his class discussions was never denied by Judge Paredes who
merely justified his action by invoking his right to freedom of expression. Section 6, Canon 4 of the New
Code of Judicial Conduct recognizes that judges, like any other citizen, are entitled to freedom of
expression. Such right, however, is not without limitation. Section 6, Canon 4 of the Code also imposes a
correlative restriction on judges: in the exercise of their freedom of expression, they should always conduct
themselves in a manner that preserves the dignity of the judicial office and the impartiality and
independence of the Judiciary. In the exercise of his right to freedom of expression, Judge Paredes should
uphold the good image of the Judiciary of which he is a part. He should have avoided unnecessary and
uncalled for remarks in his discussions and should have been more circumspect in his language. Being a
judge, he is expected to act with greater circumspection and to speak with self-restraint. Verily, Judge
Paredes fell short of this standard.
The Court cannot sustain the assertion of Judge Paredes that he cannot be held administratively liable for his
negative portrayal of Judge Tormis and Francis in his class discussions. Judge Paredes should be reminded
of the ethical conduct expected of him as a judge not only in the performance of his judicial duties, but in his
professional and private activities as well. Sections 1 and 2, Canon 2 of the Code
mandates:chanroblesvirtuallawlibrary
CANON 2
INTEGRITY
Integrity is essential not only to the proper discharge of the judicial office but also to the personal
demeanor of judges.
SECTION 1. Judges shall ensure that not only is their conduct above reproach, but that it is
perceived to be so in the view of a reasonable observer.
SECTION 2. The behavior and conduct of judges must reaffirm the people’s faith in the integrity of the
judiciary. Justice must not merely be done but must also be seen to be done.
(Emphases supplied)
Any impropriety on the part of Judge Paredes, whether committed in or out of the court, should not be
tolerated for he is not a judge only occasionally. It should be emphasized that the Code of Judicial Ethics
mandates that the conduct of a judge must be free of a whiff of impropriety not only with respect to his
performance of his judicial duties, but also to his behavior outside his sala and as a private individual.
There is no dichotomy of morality, a public official is also judged by his private morals. The Code dictates
that a judge, in order to promote public confidence in the integrity and impartiality of the judiciary, must
behave with propriety at all times. A judge’s official life cannot simply be detached or separated from his
personal existence. Thus, being a subject of constant public scrutiny, a judge should freely and willingly
accept restrictions on conduct that might be viewed as burdensome by the ordinary citizen. He should
personify judicial integrity and exemplify honest public service. The personal behavior of a judge, both in
the performance of official duties and in private life should be above
suspicion.27chanRoblesvirtualLawlibrary
Lastly, Section 1 (h), Chapter 4 of A.M. No. 03-8-02-SC provides that executive judges are authorized to
exercise other powers and prerogatives which are necessary or incidental to the performance of their
functions in relation to court administration. In the instant case, Judge Paredes was merely exercising
powers incidental to his functions as an Executive Judge since he was the only judge available when Lita
Guioguio posted bail. Notably, Lita Guioguio’s payment for cash bail bond was made on a Sunday. In
addition, the judge assigned to the court where the Guioguio case was then pending and the executive judge
of the MTCC, Cebu City were not available to receive the bail bond. Judge Paredes was the only judge
available since the practice was for one judge to be present on Saturdays. However, there was no judge
assigned for duty during Sundays.
Relative to the matter above-discussed, the insinuation made by complainant Jill of any irregularity reflected
in the issuance of the two (2) orders of release of different dates is not backed up by sufficient evidence. 28
Conduct unbecoming of a judge is classified as a light offense under Section 10, Rule 140 of the Rules of
Court and penalized under Section 11(C) thereof by any of the following: (1) A fine of not less than
P1,000.00 but not exceeding P10,000.00; (2) Censure; (3) Reprimand; and (4) Admonition with warning.
Considering that this is the first offense of Judge Paredes, the appropriate penalty under the circumstances is
admonition.chanrobleslaw
WHEREFORE, the Court finds Judge Meinrado P. Paredes, Presiding Judge of Branch 13 of the Regional
Trial Court of Cebu City, administratively liable for conduct unbecoming of a judge
and ADMONISHEShim therefor.
SO ORDERED.cralawlawlibrary

Regarding the act of receiving the cash bail bond in the Guioguio case, Justice Diy correctly found that it
cannot be regarded as grave misconduct. The Court finds merit in the position of Judge Paredes that the
approval, as well as the receipt, of the cash bail bond, was in accordance with the rules.
Thus:chanroblesvirtuallawlibrary
Finally, the Investigating Officer disagrees with Jill’s allegation that Judge Paredes committed grave
misconduct when he personally received cash bail bond in relation to the Guioguio case. Judge Paredes
justified his action by stating that he was merely following the procedure set forth in Section 14, Chapter 5
of A.M. No. 03-02-SC, which authorizes executive judges to act on petitions for bail on Saturdays after 1:00
o’clock in the afternoon, Sundays, official holidays, and special days. Said rule also provides that should the
accused deposit cash bail, the executive judge shall acknowledge receipt of the cash bail bond in writing and
issue a temporary receipt therefor. Considering that Judge Paredes merely followed said procedure, he
cannot be held administratively liable for his act of receiving the cash bail bond in the Guioguio case.

Moreover, respondent judge is authorized to receive the cash bail bond under Section 17 (a), Rule 114 of the
Revised Rules on Criminal Procedure. Under said provision, the bail bond may be filed either with the court
where the case is pending, or with any Regional Trial Court (RTC) of the place of arrest, or with any judge
of the Metropolitan Trial Court or the Municipal Trial Court of the place of arrest.

499
 THIRD DIVISION
G.R. NOS. 153745-46, October 14, 2015
th
NEMENCIO C. PULUMBARIT, SR., Petitioner, v. THE COURT OF APPEALS (17 Division
Composed of JUSTICE BIENVENIDO L. REYES, PONENTE; JUSTICE ROBERTO A. BARRIOS,
Chairman; AND JUSTICE EDGARDO F. SUNDIAM, Acting Third Member), LOURDES S.
PASCUAL, LEONILA F. ACASIO, AND SAN JUAN MACIAS MEMORIAL PARK,
INC., Respondents.
[G.R. No. 166573]
LOURDES S. PASCUAL, LEONILA F. ACASIO AND SAN JUAN MACIAS MEMORIAL PARK,
INC., Petitioners, v. NEMENCIO C. PULUMBARIT, SR., Respondent.
DECISION
JARDELEZA, J.:
Before us are two consolidated petitions. G.R. Nos. 153745-46 involves a Petition for Review
on Certiorariwith Petition for Certiorari filed by Nemencio C. Pulumbarit to annul and set aside
the Resolution1 dated May 30, 2002 issued by the Court of Appeals (CA) in the consolidated cases CA-G.R.
SP No. 61873 and CA-G.R. CV No. 69931. G.R. No. 166573, on the other hand, concerns a Petition for
Review on Certiorarifiled by Lourdes S. Pascual, Leonila F. Acasio and San Juan Macias Memorial Park,
Inc. seeking the review of the Decision2 dated September 28, 2004 rendered by the CA in CA-G.R. CV No.
69931 reversing the Decision3 of Branch XX of the Regional Trial Court in Malolos, Bulacan in Civil Case
No. 7250-M and ruling that the agreement entered into between the parties was a sale.
The Facts and Case Antecedents
Sometime in 1982, San Juan Macias Memorial Park, Inc. (SJMMPI), through its President Lourdes S.
Pascual, authorized Atty. Soledad de Jesus to look for a buyer for the San Juan Memorial Park (Memorial
Park) for P1,500,000.00.4 Thereafter, Lourdes Pascual, Leonila F. Acasio, and the other officers of SJMMPI
(Pascual et al.) were introduced to Nemencio Pulumbarit (Pulumbarit). The parties eventually came to an
agreement, with Pulumbarit issuing eighteen (18) checks in the name of SJMMPI Secretary-Treasurer
Leonila Acasio. Pulumbarit and/or his lawyer took charge of reducing the agreement into writing and
securing the signatures of all concerned parties.5
On June 13, 1983, Pascual et al. sent a letter to Pulumbarit requesting for a copy of their written agreement.
In another letter of even date, they also asked Pulumbarit to reissue new checks to replace the ones he
previously issued.6 Failing to get a favorable response, Pascual et al. filed a Complaint for Rescission of
Contract, Damages and Accounting with Prayer for Preliminary Injunction or Receivershipagainst
Pulumbarit.7
Proceedings before the Trial Court
In their Complaint, docketed as Civil Case No. 7250-M before Branch XX of the Regional Trial Court in
Malolos, Bulacan, Pascual et al. alleged that they entered into a contract of management with option to buy
the Memorial Park with Pulumbarit, with the latter allegedly agreeing to pay Pascual et al. a sum of
P750,000.00 on staggered installments.8 Under this alleged agreement, Pulumbarit's failure to make good on
500
these installments would cause the cancellation of their contract, forfeiture of any payment already made,
and surrender by Pulumbarit of possession over the Memorial Park. 9
Pascual et al. claimed that they requested new checks from Pulumbarit to replace the previous ones he
issued, the latter having been made payable to SJMMPI's Secretary-Treasurer Leonila Acasio, who has since
then resigned from the company. Due to his refusal to issue the requested replacement checks, Pulumbarit
was in breach of his obligations under their contract.
Pascual et al. also asserted that Pulumbarit further violated their management contract by (1) destroying the
original fence surrounding the Memorial Park, (2) annexing the adjacent lots and (3) operating these and the
Memorial Park under the name "Infinito Memorial Park" using the permit issued to SJMMPI without its
consent and the proper governmental clearances.10 Thus, Pascual et al. prayed that the court declare, among
others, (1) the rescission of their agreement, (2) forfeiture of all sums paid by Pulumbarit to SJMMPI, and
(3) an obligation on Pulumbarit's part to render accounting.11
On February 3, 1984, Pulumbarit filed a Motion praying for the dismissal of the Complaint for lack of cause
of action, attaching a copy of the Memorandum of Agreement (MOA). 12 Pascual et al. amended
their Complaint on June 5, 1984.13 Therein, they alleged that Pulumbarit falsified their agreement, as the
MOA provided did not reflect the terms and conditions agreed upon by the parties. They disputed the
statement in the MOA that the agreement was a sale of all the paid-up stocks of SJMMPI and not a
management agreement with option to buy. Pascual et al. argued that the falsified MOA was a nullity and
therefore without force and effect.
In a motion filed on July 5, 1984, and pending resolution of Pulumbarit's Motion to Dismiss, Pascual et
al.sought to have Pulumbarit declared in default.14 The trial court granted this motion and allowed Paseual et
al. to present their evidence ex parte.15
On September 5, 1984, the trial court rendered a default judgment in favor of Paseual et al.16 This judgment
of default was reversed by the CA on January 15, 1989 and the case was remanded to the trial court for
reception of Pulumbarit's evidence.17 Prior to the reversal of the trial court's default judgment, however,
Pascual et al. applied for the appointment of a receiver to take possession of the Memorial Park and all its
records and business transactions during the pendency of the case. 18 This application was denied by the trial
court in an Order dated October 10, 1991.19
With the reversal of the earlier judgment of default, the trial court admitted Pulumbarit's Answer.20Therein,
Pulumbarit denied ever having offered to manage the Memorial Park for Paseual et al. Presenting the signed
MOA as evidence, Pulumbarit countered that SJMMP1 and its officers/stockholders sold all of the
subscribed capital stock of SJMMPI to him for P750,000.00 payable in installments. 21 As sole owner,
Pulumbarit claimed he had no obligation to Paseual et al. to render accounting.
During the trial, Paseual et al. presented, among others, Eliodoro Constantino, a Document Examiner from
the National Bureau of Investigation (NBI), to prove that Pulumbarit falsified the MOA, which caused it to
not reflect their true agreement. Constantino examined the contested MOA and testified that the second page
was typed from a typewriter different from the one used in typing pages one, three and four. 22
On July 15, 2000, the trial court promulgated its questioned Decision23 in favor of Paseual et al. The
dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
a) Declaring null and void the Memorandum of Agreement dated November 1982 between Lourdes S.
Paseual and Nemencio Pulumbarit, Sr. (marked exhibit "J" for the plaintiffs and Exhibit "1" for the
defendants);cralawlawlibrary
b) Rescinding the Management Contract entered into by Nemencio C. Pulumbarit, Sr. with the plaintiffs for
the management of the San Juan Macias [Memorial] Park, Inc., and declaring the same to have no force and
effect;cralawlawlibrary
c) Directing Nemencio Pulumbarit, Sr. to render an accounting of his operation of the San Juan Macias
Memorial Park, Inc. from the time he took over the operation thereof in 1982 up to the date of this decision;
and
d) Ordering Nemencio C. Pulumbarit, Sr. to pay the San Juan Macias Memorial Park, Inc. the sums of
P100,000.00 as actual damages and P100,000.00 by way of attorney's fees and expenses of litigation.
The Court also orders Nemencio Pulumbarit, Sr., as well as any and all persons acting for and in his behalf,
to forthwith cease and desist from operating and engaging in the business of the San Juan Macias Memorial
Park, Inc., including that being operated under the name of Infmito Memorial Park, and from engaging, in
any manner whatsoever, in acts of management, ownership and administration of the aforesaid corporation.
He is also directed to immediately surrender to the plaintiffs all documents, papers, deeds, accounts and
sums of money relating to or the business and operation of the corporation.
SO ORDERED.24ChanRoblesVirtualawlibrary
Pulumbarit filed a Notice of Appeal dated August 19, 2000.25 His appeal was docketed as CA-G.R. CV No.
69931.
Meanwhile, and before the transniittal of the records of Civil Case No. 7250-M to the CA, Pascual et
al.filed with the trial court motions praying for (1) the issuance of a writ of injunction against
Pulumbarit26and (2) the execution of the decision pending appeal. 27 The trial court granted these motions on
September 13, 200028 pursuant to Section 4, Rule 39 of the Rules of Court.29 Pulumbarit's subsequent
motion for reconsideration30 of this Order (directing discretionary execution) was denied on October 3,
2000.31
Aggrieved, Pulumbarit filed a Petition for Certiorari with the CA to nullify the writs of execution and
injunction issued by the trial court, with prayer for the issuance of a temporary restraining order (TRO)
and/or a writ of preliminary injunction.32 This case was docketed as CA-G.R. SP No. 61873.
Proceedings before the Court of Appeals
After the conduct of oral arguments, the CA in CA G.R. SP No. 61873 issued a TRO on January 26,
200133 and thereafter a writ of preliminary injunction on March 28, 2001. 34 Despite this, however, Pascual et
ai, on May 11, 2001, filed a motion in CA-G.R. CV No. 69931 seeking execution of the trial
court's Decision pending Pulumbarit's appeal.35 Meanwhile, CA-G.R. SP No. 61873 and CA-G.R. CV No.
69931 were ordered consolidated on November 5, 2001. 36
Thereafter, the CA, in its questioned Resolution dated May 30, 2002, granted Pascual et al.'s motion for
execution pending appeal and, as a consequence, dismissed CA-G.R. SP No. 61873 for being moot and
academic.37 On July 12, 2002, Pulumbarit filed a Petition for Review on Certiorari under Rule 45 (with
Petition for Certiorari under Rule 65) seeking a review of the May 30, 2002 Resolution.38 This is presently
501
docketed as G.R. Nos. 153745-46.
As a result of the filing of G.R. Nos. 153745-46 with this Court, the CA, on September 11, 2002, resolved to
suspend its May 30, 2002 Resolution granting Pascual's motion for execution pending appeal. 39 CA-G.R.
CV No. 69931 was nevertheless declared submitted for decision on November 25, 2002. 40
On September 28, 2004, the CA issued its Decision reversing the trial court's ruling in Civil Case No. 7250-
M. Pascual et al.'s motion for reconsideration41 dated October 19, 2004 was denied by the CA in its
Resolution42 dated January 12, 2005. Aggrieved, Pascual et al. filed a petition43 seeking the review of this
Decision, hence, G.R. No. 166573.
G.R Nos. 153745-46 were consolidated with G.R. No. 166573 by virtue of this Court's Resolution dated
February 7, 2007.44
Issues
We find the issues, as raised in the consolidated petitions, to be as follows:
(1) Whether Pascual et al.'s filing of an Urgent Motion for Execution Pending Appeal in CA-G.R. CV No.
69931, despite knowledge of the pendency of CA-G.R. SP No. 61873, constituted forum
shopping;cralawlawlibrary
(2) Whether the consolidation of CA-G.R. CV No. 69931 with CA-G.R. SP No. 61873 violated the internal
rules of the CA, resulting to an infringement of Pulumbarit's right to due process;cralawlawlibrary
(3) Whether the filing of the motion for execution pending appeal in CA-G.R. CV No. 69931 rendered CA-
G.R. SP No. 61873 moot and academic;cralawlawlibrary
(4) Whether the grant of the motion for execution pending appeal by the CA was proper;cralawlawlibrary
(5) Whether the finding of fact in the application for receivership constituted res judicata as to the issue of
the true agreement between the parties; and
(6) Whether the agreement between the parties was one for sale or management of the memorial
park.ChanRoblesVirtualawlibrary
We rule on the issues.
Ruling of the Court
Pascual et al. committed abuse of
court processes.
The trial court, upon Pascual et al.'s motion, allowed the execution of its Decision pending Pulumbarit's
appeal of the same with the CA.45 When the CA (in CA-G.R. SP No. 61873) issued writs against said
discretionary execution, Pascual et al. filed a motion seeking to do exactly that what the court has already
enjoined, albeit this time before the CA in CA-G.R. CV No. 69931. This act, according to Pulumbarit,
constitutes "a specie (sic) of deliberate and willful forum-shopping"46 which should not be countenanced by
this Court.
Strictly speaking, Pascual et al. did not commit forum shopping. Forum shopping exists when the elements
of litis pendentia are present, or when a final judgment in one case will amount to res judicatain
another.47 Here, any action by the CA on Pascual et al.'s motion in CA-G.R. CV No. 69931 is provisional in
nature, such that it can in no way constitute as res judicata in CA-G.R. SP No. 61873. Moreover, forum
shopping requires the identity of parties, rights or causes of action, and reliefs sought in two or more
pending cases.48 Mere, there is no identity of relief and/or cause of action. CA-G.R. SP No. 61873 is limited
to a determination of whether grave abuse of discretion was committed by the trial court in granting
execution pending appeal while Pascual et al.'s motion in CA-G.R. CV No. 69931 involves a
determination by the CA whether there are "good reasons" warranting the grant of discretionary execution.
We, however, note with disapproval the circumstances surrounding Pascual et al.'s filing of said motion.
In In the Matter of Contempt Proceedings Against Ventura, O. Ducat and Teng Mariano and Cruz Law
Offices,49 we resolved to grant a petition to cite respondents Ducal et al. in contempt for delaying the
satisfaction of a final judgment against them "by re-filing motions and attempting to re-open finally settled
issues through the expediency of hiring a new counsel." We ruled:
We grant the motion of petitioner as we find respondent Ventura O. Ducat and his counsel Atty. Elgar Cruz
guilty of indirect contempt, of court pursuant to Sec. 3, Rule 71, of the Rules of Court.
xxx
A comparison of the Urgent Omnibus Motion filed on 14 September 1993 with the urgent motion to declare
failure of auction sale of the Wack Wack properly filed on 18 August 1994 discloses that the latter motion
merely echoed the allegations found in the former motion. Furthermore, both motions prayed for
the same relief, namely, the annulment of the auction sale conducted on 7 September 1992. In effect,
respondents asked the trial court in the 18 August 1994 motion to resolve an issue which has been
settled by the same court as early as 3 November 1993, affirmed by the Court of Appeals on 31
January 1994, and by this Court on 11 July 1994. Equally disdainful is the fact that the motion for
reconsideration of the 11 July 1994 ruling was still pending before this Court when respondents filed the 18
August 1994 motion. The foregoing actuation demonstrates defiance of the tuithority and dignity of
this Court and disrespect of the administration of justice.50
(Emphasis and underscoring supplied.)
Here, the CA in CA-G.R. SP No. 61873 issued the TRO and the writ of preliminary injunction against the
discretionary execution on January 26, 2001 and March 28, 2001, respectively.51 On April 16, 2001,
Pulumbarit posted the required bond amounting to P500,000.00. 52 Pascual et al., on the other hand, filed
their motion for execution pending appeal in CA-G.R. CV No. 69931 on May 11, 2001, nearly four months
after the issuance of the TRO, two months after the writ of injunction and almost a month from Pulumbarit's
posting of the bond.
Said motion is clearly an attempt on Pascual et al.'s part to undermine the TRO and writ of preliminary
injunction earlier issued in CA-G.R. SP No. 61873 in Pulumbarit's favor. (Notably, Pascual et al. do not
appear to have sought the reconsideration of the issuance of said injunctive orders.) Not
unlike Ducat,therefore, Pascual's filing of the motion in CA-G.R. CV No. 69931 demonstrates defiance of,
if not lack of due respect for, the authority of the CA which earlier issued injunctive writs against the
execution by the trial court of the appealed Decision.
The consolidation of CA-G.R. CV No.
69931 with CA-G.R. SP No. 61873 was
proper; no violation of Pulumbarit's right
to due process.
502
Pulumbarit asserts that the consolidation of CA-G.R. CV No. 69931 with CA-G.R. SP No. 61873 is void ab
initio for violating the Revised Internal Rules of the Court of Appeals (RIRCA):
...we respectfully submit that the consolidation is void ab initio for flagrant violation of RIRCA on (aa)
Raffle of Cases, (bb) the Procedural Jurisdiction of the Justice to whom the Appeal Case is Raffled; (cc)
Consolidation of Cases, and what cases can be consolidated, (dd) The Justice who can consider and act in
specific incidents; and (ee) Processing of Special Civil Actions and Procedural Jurisdiction of the Justice to
whom a Special Civil Action is raffled...53
The consolidation being void ab initio, Pulumbarit argues that the May 30, 2002 Resolution subsequently
issued is also null and void for being violative of his "right to procedure (sic) due process." 54
Pulumbarit errs.
In Spouses Fortaleza v. Spouses Lapitan, we reiterated the established doctrine that there are no vested
rights to rules of procedure.55Spouses Fortaleza involved a case wherein the justice assigned to complete the
records also decided the case on the merits, in alleged violation of the Court of Appeals' internal two-raffle
system. This procedural shortcut, according to Spouses Fortaleza, evinced the appellate court's bias and
prejudgment in favor of Spouses Lapitan. We rejected their argument and ruled thus:
xxx [T]he two-raffle system is already abandoned under the 2009 IRCA. As the rule now stands, the Justice
to whom a case is raffled shall act. on it both at the completion stage and for the decision on the merits xxx
Corollarily, the alleged defect in the processing of this case before the CA has been effectively cured. We
stress that rules of procedure may be modified at any time and become effective at once, so long as the
change does not affect vested rights. Moreover, it is equally axiomatic that there are no vested rights to
rules of procedure. Thus, unless spouses Fortaleza can establish a right by virtue of some statute or
law, the alleged violation is not an actionable wrong. At any rate, the 2002 IRCA does not provide for
the effect of non-compliance with the two-raffle system on the validity of the decision. Notably too, it
does not prohibit the assignment by raffle of a case for study and report to a Justice who handled the
same during its completion stage.56
(Emphasis and underscoring supplied.)
The RIRCA are rules which govern the internal operations of the CA. It is not intended to implicate
substantial rights. The rules governing case assignments, for example, do not give rise to a right on the part
of a litigant to have his case heard by any particular division of the court or the Decision penned by a
particular Justice.57 Barring exceptional circumstances, parties are not heard on case raffling and similar
matters,58 as in fact internal rules can generally be modified at any time with the changes becoming
immediately effective.
Granting, for the sake of argument, that there was some oversight in relation to the observance of the
RIRCA procedure, Pulumbarit nevertheless failed to establish an actionable wrong separate from the alleged
breach of the said internal rules. Contrary to what he would have this Court believe, we are convinced that
there was no denial of Pulumbarit's right to due process. The record clearly shows that Pulumbarit was given
(and, in fact, availed of) every opportunity to present his case, by way of both pleadings and oral arguments,
and pursue the appropriate reliefs before the CA. As in fact, the CA issued, in his favor, a TRO on January
26, 200159 and a writ of preliminary injunction on March 28, 2001. 60
Aside from being heard in oral argument, Pulumbarit also filed with the CA several other pleadings,
including (a) a Respectful Reiteration of the Application for a TRO and or Writ of Preliminary
Injunction dated January 15, 2001 ;61 (b) Petitioner's Memorandum in Summation of the Points raised in the
Oral Arguments of February 27, 2001 and in Refutation of the Arguments of Private Respondents dated
March 5, 2001 as his Memorandum of Authorities.62 Clearly, there was no denial of his right to due process.
CA-G.R. SP No. 61873 not rendered
moot and academic by the filing of the
motion for execution pending appeal in
CA-G.R. CV No. 69931.
In its questioned Resolution dated May 30, 2002, the CA ruled that, even assuming the trial court erred in
allowing execution pending appeal, Pascual et al. still had the right to apply for a similar writ before the
appellate court. It was in this sense that the CA ruled that the central issues raised in CA-G.R. SP No. 61873
have been rendered moot and academic by the filing of the motion. 63
We disagree.
To reiterate, Pascual et al.'s motion in CA-G.R. CV No. 69931 seeks the CA's approval to execute the trial
court's Decision pending final disposition of Pulumbarit's appeal. CA-G.R. SP No. 61873, on the other hand,
is an action to determine whether grave abuse of discretion was committed by the trial court when it allowed
execution pending appeal. The subjects of Pascual et al.'s motion in CA-G.R. CV No. 69931 and
Pulumbarit's petition in CA-G.R. SP No. 61873 concern two different, albeit closely related, issues.
Furthermore, any action on a motion for execution pending appeal is only provisional in nature. The grant
or denial (as the case may be) of such a motion is always without prejudice to the court's final disposition of
the case and the issues raised therein. In fact, Section 3, Rule 39 of the Rules of Court allows the party
against whom the execution of a decision pending appeal is directed to stay the execution by posting
a supersedeas bond.64 Section 5 of the same rule also 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. 65
For these reasons, the grant by the CA of a motion for execution pending appeal, being provisional in nature,
could therefore not have rendered CA-G.R. SP No. 61873 moot and academic. In the same way, if not
arguably more so, much less can the mere filing of such a motion warrant the dismissal of CA-G.R. SP No.
61873 on the ground of mootness. Thus, the CA committed a reversible error when it dismissed CA-G.R. SP
No. 61873.
Reasons cited are insufficient to justify
grant of execution pending, appeal.
Section 2, Rule 30 of the Rules of Court provides, in part, that discretionary execution (or execution pending
appeal) may only issue "upon good reasons to be stated in a special order after due hearing.''
Good reason must consist of superior or 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. 66
Our ruling in Diesel Construction Company, Inc. (DCCl) v. Jollibee Foods Corporation (JFC) 67 is
particularly instructive. Citing possible financial distress to be caused by a "protracted delay in the
reimbursement" of the costs prayed for, DCCl moved for the discretionary execution of the trial court's
decision awarding escalated construction costs in its favor.68 The CA, however, allowed a stay of execution
503
upon the JFC's posting of a supersedeas bond.69 When the matter was brought before this Court for
resolution, we ruled against said discretionary execution, thus:
The financial distress of a juridical entity is not comparable to a case involving a natural person - such as a
very old and sickly one without any means of livelihood, an heir seeking an order for support and monthly
allowance for subsistence, or one who dies.
Indeed, the alleged financial distress of a corporation does not outweigh the long standing general
policy of enforcing only final and executory judgments. Certainly, a juridical entity like petitioner
corporation, has other than extraordinary execution, alternative remedies like loans, advances, internal cash
generation and the like to address its precarious financial condition.
(Emphasis and underscoring supplied.)
In this case, the grant by the CA of Pascual et al.'s motion for discretionary/extraordinary execution was
founded on the following reasons: (1) to stop Pulumbarit from continuing to receive money from the sale of
the lots and (2) to save the property from distraint and public auction. 71 We find the foregoing reasons
insufficient to justify the execution of the trial court's Decision pending final resolution of Pulumbarit's
appeal.
For one, there is no urgent and pressing need for the immediate execution of the Decision considering that,
as noted by the CA itself, Pulumbarit had been in possession of the subject Memorial Park for the past
twenty years.72 Assuming the affirmance of the trial court's Decision in Pascual et a/.'s favor, Pulumbarit
would still have to surrender possession of the Park and account for all of its finances.
Secondly, and as in the case of DCCI v. JFC, there are alternative remedies (i.e. re-application for
receivership, loans and redemption, among others) available to Pascual et al. that may more appropriately
address their concerns arising from the possible distraint and auction of the Memorial Park. The existence of
these remedies, in our view, negates the claim of urgency necessary to justify execution of the trial
court's Decision pending final resolution of Pulumbarit's appeal.
The finding of fact in the application
for receivership did not constitute res
judicata as to the issue of the true
agreement between Pulumbarit and
Pascual et al.
In its questioned Decision, the CA found that Pascual et al. was bound by the finding made by the trial court
(in relation to their application for receivership) that the agreement between the parties was one for sale and
not management. Thus:
This Court is convinced that the trial court was bound by said findings of fact, especially considering that it
was the same court (through then Presiding Judge Amante M. Laforteza) which made said findings. Material
facts or questions which were in issue in a former action and were there admitted or judicially determined
are conclusively settled by a judgment rendered therein and that such facts or questions become res judicata
and may not again be litigated in a subsequent action between the same parties or their privies, regardless of
the form the issue may take in the subsequent action, whether the subsequent action involves the same or a
different form or proceeding, or whether the second action is upon the same or a different cause of action,
subject matter, claim or demand, as the earlier action. In such cases, it is also immaterial that the two actions
are based on different grounds, or tried on different theories, or instituted for different purposes, and seek
different reliefs.74ChanRoblesVirtualawlibrary

We reverse the ruling of the CA on this matter. Res judicata by conclusiveness of judgment does not apply
in this case.
In Social Security Commission v. Rizal Poultry and, Livestock Association,75 we laid down the requirements
of res judicata in the concept of "conclusiveness of judgment," to wit:
There is "bar by prior judgment" when, as between the first case where the judgment was rendered and the
second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In
this instance, the judgment in the first case constitutes an absolute bar to the second action.
But where there is identity of parties in the first and second cases, but no identity of causes of action,
the first judgment is conclusive only as to those matters actually and directly controverted and
determined and not as to matters merely involved therein. This is the concept of res judicata known as
"conclusiveness of judgment." Stated differently, any right, fact, or matter in issue directly adjudicated or
necessarily involved in the determination of an action before a competent court in which judgment is
rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated
between the parties and their privies, whether or not the claim, demand, purpose, or subject matter of the
two actions is the same.76
xxx
(Emphasis and underscoring supplied.)
The application of the doctrine of res judicata either in the concept of bar by prior judgment or
conclusiveness of judgment requires or presupposes the existence of two independent actions.
Since receivership may be resorted to either as a principal action or an ancillary remedy, 77 it is imperative to
first determine the nature of the application for receivership in this case. If, for example, it is found that
Pascual et al. filed a separate action for receivership, the findings of fact made by the court therein may be
held to be conclusive as to the "true" nature of the parties' agreement in the action for rescission of contract,
damages and accounting. If, on the other hand, the application was made ancillary to the principal action for
rescission, a finding made in the course of the resolution of said application would not bar the same court,
after an exhaustive litigation of the main issues before it, from later on arriving at a different finding of fact.
The records show that Pascual et al.'s, "petition for receivership" was filed with the same court and under
Civil Case No. 7250-M,78specifically, for the appointment of a receiver to preserve their rights over the
Memorial Park during the pendency of the suit with Pulumbarit. It is thus an application for an ancillary
remedy made during the course of the main action for rescission. 79 Being a provisional remedy, the
appointment of a receiver would always be without prejudice to the final outcome of the main case. A
finding of feet made in the course of the resolution of said application cannot therefore constitute res
judicata for purposes of the issues implicated in the main ease. As in fact, the trial court in this case, in the
end, found for Pascual et al. and ruled that the agreement between the parties was not a sale, but a
management contract.
Agreement between the parties was a contract to sell the shares of SJMMPI and not a contract of sale or a
management contract with option to buy.
Pascual et al. do not dispute that they entered into an agreement with Pulumbarit. What they take issue with
are the terms and conditions in the MOA which allegedly do not reflect the terms and conditions actually
agreed upon by the parties.80 Hence, they prayed, among others, that the MOA be declared null and void
and/or rescinded and without force and effect and that Pulumbarit be ordered to "render an accounting of his
504
operation effective from the date of his takeover and to surrender all documents, papers, deeds and sums of
money in accordance therewith.81
In ruling that the contract between the parties was a sale, the CA reasoned thus:
As between the verbal agreement for the management of the memorial park and theMemorandum of
Agreement evidencing the intention of the parties to sell the memorial park, this Court is inclined to give
more weight to the written agreement of the parties which was duly signed by the incorporators.
Although Lourdes Sevilla Pascual, one of the incorporators, did not sign said Memorandum of
Agreement, she freely executed another document to signify the sale of her shares in the corporation.
The agreement or contract between the parties is the formal expression of the parties' rights, duties and
obligations. It is the best evidence of the intention of the parties.Thus, when the terms of an agreement
have been reduced into writing, it is considered as containing all the terms agreed upon, and there can be,
between the parties and their successors-in-interest, no evidence of such terms other than the contents of the
written agreement, xxx
Although the investigation of the National Bureau of Investigation (NBI) on the Memorandum of
Agreement yielded a finding that the second page differed in terms of type size and type design from pages
1, 3 and 4, this does not nullify the entire agreement, especially because page 3 thereof bore the signatures
of the incorporators. The signatures on page 3 are of utmost significance for it may be safely concluded that
pages I and 4 also bear the approval of the signatories. Notably, page 1 of the Memorandum of
Agreement clearly shows the intention of the parties to sell the memorial park...
xxx
Assuming arguendo that no evidentiary weight could be given to the Memorandum of Agreement, the
evidence on record would still show that appellee Dr. Pascual really intended to sell the memorial
park. This is shown by the letter of authority given to Atty. Soledad Pascual who was tasked to look
for a buyer for the memorial park. xxx
It is absurd to sustain the trial court's finding that the agreement was for the management of the memorial
park. Notably, appellant already paid more than P400,000.00, a substantial amount especially at the
time of its payment, the early 80s. If the agreement was really for the management of the memorial
park, it should have
been the corporation which should be paying appellant. In fact, no evidence was presented by appellee
Dr. Pascual on the compensation of appellant for his management of the memorial park.
xxx82
(Emphasis supplied)
We affirm the findings of the CA insofar as it ruled that the parties did not contemplate a management
contract with option to buy. We nevertheless rule that the agreement entered into by the parties was not a
contract of sale, but rather, a contract to sell the shares of SJMMPI.83
The text of the MOA between the parties shows that their agreement was a contract to sell SJMMPI shares.
The pertinent portion of page three of the MO A reads:
xxx
4. The shares of stocks stated above and subject matter of this Agreement will only be transferred in the
name of the PARTY OF THE SECOND PART, its heirs, successors and assigns upon full payment and/or
full satisfaction thereon of the consideration of this agreement.
While Pascual et al. are technically correct in arguing that they did not enter into a contract of sale with
Pulumbarit, they cannot deny the existence of the stipulation in page three of the MOA evidencing
a contract to sell and negating their claim of a management contract with option to buy. Notably, page three
bears the signatures of Pulumbarit, Pascual, and the other SJMMPI stockholders. 85 We further note that
Pascual did not dispute the authenticity of her signature appearing on page three of the MOA. Neither did
she allege during the course of the proceedings that she signed another document or entered into another
written transaction with Pulumbarit aside from the MOA.
Even though the NBI Questioned Document Report No. 102-38486 (Report) stated that page two of the
document was typed from a typewriter different from that used in typing pages one, three and four, the same
report was inconclusive as to the possibility of falsification. The Report does not contain any categorical
statement from the NBI Examiner that the pages were substituted or that the MOA was spurious or falsified.
agreement executed by your client in favor of our client, till she has been paid. In view of this development,
our client decided to suspend paying your client until the claim of Ms. Pascual has been settled. We wish to
assure you that our client has the money to pay your client anytime the claim of Ms. Pascual has been
settled. We suggest, therefore, (hat you urged (sic) your client to thresh out this claim of Ms. Pascual as soon
as possible in order that we could immediately comply with your request. 92
(Emphasis supplied)
Contrary to Pascual et al. 's claim, there is nothing in the letter to show an admission, whether express or
implied, on Pulumbarit's part that their agreement was for management of SJMMPI.
Most telling of the real agreement between Pulumbarit and Pascual et al. was the undisputed fact that the
former made payments to the latter, and not vice versa. As the CA correctly declared, it was indeed absurd
for a person rendering service to pay compensation to his employers. If Pascual et al.'s version of the
agreement is to be believed, they should have been the ones paying Pulumbarit for managing the Memorial
Park and not the other way around.

Even if we were to assume, for the sake of argument, that page two was in fact substituted on the ground
that its type size and design are different from the type size and design used in the other three pages of the
MOA, then we can infer that the other three pages (one of which bore the authenticating signatures of the
party) were not substituted, all three having exactly the same type size and design. We can also further
deduce that the provisions in these un-substituted pages reflect the "true" terms and conditions agreed upon
between the parties.
This is significant as page one, which we have now established to not have been substituted, clearly sets
forth, in the preambular clauses, the parties' positive intent to enter into a contract to sell:
WHEREAS, THE PARTY OK THE FIRST PART have offered to sell all their rights, interest and
participations with San Juan Macias Memorial Park, Inc., to the extent indicated above to the PARTY
OP THE SECOND PART and the PARTY OF THE SECOND PART has accepted the offer of the PARTY
OF THE FIRST PART.87
(Emphasis and underscoring supplied.)
ChanRoblesVirtualawlibrary
That Pascual et al. really intended to sell SJMPPI is further shown by the document earlier issued to Atty.
De Jesus authorizing her to look for a buyer tor the Memorial Park and negotiate the sale of the
corporation.88 It is immaterial that the authorization given to Atty. De Jesus had already expired by the time
the MOA between the parties was signed as this does not diminish the intention of Pascual et al. to sell the
Memorial Park at or about the time they entered into the agreement with Pulumbarit. That there are as yet no
SJMMPI stock certificates in Pulumbarit's name and possession, does not negate the character of the
contract to sell between the parties.
During the trial, Acasio testified that as "compensation" for his services, Pulumbarit (who had by then
already paid between P500,000.00 to P700,000.00 to manage a Park previously put up for sale for
P1,500,000.00) will be paid for expenses incurred in the course of management and given an option to buy
the Park after two years.93 These terms simply do not occur in the ordinary course of business and we are
hard-pressed to imagine a reasonable person agreeing to such a business arrangement. The evidence on
record overwhelmingly shows that the contract between the parties was indeed a contract to sell the shares
of SJMMPI and the Memorial Park.
WHEREFORE, and in view of the foregoing, we resolve to:
(1) GRANT G.R. Nos. 153745-46. The Court of Appeals' Resolution dated May 30, 2002 in CA-G.R. SP
No. 61873 is hereby ANNULLED and SET ASIDE; and
(2) DENY G.R. No. 166573 for lack of merit and AFFIRM the Decision of the Court of Appeals in CA-
G.R. CV No. 69931 with the MODIFICATION that the agreement between herein parties is a contract to
sell (not a contract of sale of) SJMMPI shares.
SO ORDERED.chanroblesvirtuallawlibrary

Pascual et al. claim that Pulumbarit, in his reply to their letters of June 13, 1983, 89 July 14, 198390 and
August 18, 1983,91 impliedly admitted that the true agreement between the parties was for the management
of the memorial park. This is belied by the records. The letter reads:
Your letter dated 18 August 1983 on behalf of San Juan Macias Memorial Park, Inc., to our client Nemencio
Pulumbarit, Sr. has been referred to us for appropriate reply.

In connection therewith, please be advised that our client is ready and willing to comply with your request as
embodied in your letter. However, a certain Ms. Lourdes S. Pascual, a major stock holder (sic) of San Juan
Macias Memorial Park, Inc. had complained to us that she has not as yet receive (sic) a single centavo as her
share from this transaction and threatened us that she will not sign the memorandum of

505
 FIRST DIVISION
G.R. No. 177600, October 19, 2015
MAYOR ANWAR BERUA BALINDONG, LT. COL. JALANDONI COTA, MAYOR AMER ODEN
BALINDONG, AND ALI BALINDONG, Petitioners, v. COURT OF APPEALS, STATE
PROSECUTOR LEAH ARMAMENTO, OFFICE OF THE SOLICITOR GENERAL AND
ZENAIDA LIMBONA, Respondents.
G.R. No. 178684
ZENAIDA M. LIMBONA, Petitioner, v. HON. JUDGE ALEXANDER S. BALUT OF THE
REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 76, Respondent.
DECISION
BERSAMIN, J.:
The issuance by the trial court of the warrant of arrest upon filing of the information and supporting papers
implies the determination of probable cause for the offense charged. It is then superfluous for the accused to
seek the judicial determination of probable cause on the pretext that the trial court should still act and
proceed independently of the executive determination of probable cause to charge the proper offense.
The Case
Before us are the consolidated cases of G.R. No. 177600 and G.R. No. 178684. G.R. No. 177600 involves
the appeal by petition for review on certiorari of Mayor Anwar Berua Balindong, Lt. Col. Jalandoni Cota,
Mayor Amer Oden Balindong, and Ali Balindong (Balindong, et al.) to assail the Decision promulgated on
April 24, 2007 by the Court of Appeals (CA) in CA-G.R. SP No. 97121.1 G.R. No. 178684 relates to
the Petition (To Show Cause Why Respondent Should Not Be Held in Contempt of Court) 2 brought by
Zenaida M. Limbona (Limbona), the private complainant in the criminal cases instituted against
Balindong, et al., charging Presiding Judge Alexander S. Balut of the Regional Trial Court (RTC), Branch
76, in Quezon City with contempt of court for issuing the order dated July 16, 2007 suspending the
proceedings in the criminal cases involving Balindong, et al. out of judicial courtesy.3
Antecedents
The CA's decision being assailed in CA-G.R. SP No. 97121 rendered the following factual antecedents, to
wit:
The long-drawn controversy now raised in the instant petition was instigated by a shooting incident that took
place in Poblacion, Malabang, Lanao del Sur on May 11, 1998 that resulted in the death of Dante Limbona
and Ante Maguindanao, and the serious wounding of Azis Panda and Kiri Hadji Salik. In the course of the
preliminary investigation the investigating prosecutor found probable cause to charge private
respondents Lt. Col. Jalandoni D. Cota, Anwar Berua Balindong, PO1 Kennedy Balindong, Amer
Oden Balindong and Ali Sarip Balindong with Double Murder with Multiple Frustrated Murder.
The Information was thereupon filed before the Regional Trial Court of Malabang, Lanao del Sur, Branch
12. However, after reinvestigation ordered by the trial court, the Office of the Provincial Prosecutor
downgraded the charges against private respondents Lt. Col. Jalandoni D. Cota, Anwar Berua Balindong
and Kennedy Balindong and dropped the charges against Amer Oden Balindong and Ali Balindong.
Private complainant Zenaida Limbona, the widow of the victim Dante Limbona, filed a petition for review
506
questioning the Provincial Prosecutor's 28 August 1998 Resolution before the Department of Justice (DOJ).
In a 4 August 1999 Resolution, then Secretary Serafin Cuevas modified the assailed resolution and directed
the Provincial Prosecutor to file instead "two (2) informations for frustrated murder with attempted murder,
two (2) informations for frustrated murder and an information for attempted murder" against private
respondents. Subsequently, in a 1 December 1999 Resolution, Secretary Cuevas denied private
respondents' Motion for Reconsideration in this wise:
"The matters raised in the instant motion for reconsideration have been taken into consideration in arriving
at our resolution, hence, we find no cogent reason to reconsider the same.
In view, however, of the Supplemental Manifestation filed by Prosecutor Ringcar B. Pinote on October 19,
1999, the dispositive portion of our resolution dated August 4, 1999 is hereby modified to read as
follows:chanRoblesvirtualLawlibrary
xxx WHEREFORE, your resolution is hereby modified. You are directed to file two (2) informations for
murder with attempted murder, two (2) informations for frustrated murder and an information for attempted
murder against respondents Datu Anwar Berua Balindong, Lt. Col. Jalandoni Cota, PO1 Kennedy
Macaborod Balindong, Datu Amer-Oden Sarip Balindong and Datu Ali Sarip Balindong. Report your
compliance within ten (10) days from receipt hereof x x x"
The corresponding Amended Informations were accordingly filed before the Regional Trial Court of
Maguindanao, Cotabato City and docketed as Criminal Case Nos. 2503, 2573, 2574, 2575 and 2576. Private
respondents, in the meantime, filed a second Motion for Reconsideration, which the succeeding DOJ
Secretary Artemio G. Tuquero in a 16 March 2000 Resolution denied "with finality and with warning that
no further pleadings will be entertained". Undeterred by the tenor of the denial of their second motion for
reconsideration, they filed a Third Motion for Reconsideration that was eventually granted by the new DOJ
Secretary Hernando B. Perez in a 12 March 2001 Resolution. Private complainants sought reconsideration
thereof but the same was subsequently denied in a 24 July 2001 Resolution, prompting them to bring the
matter before the Court of Appeals in a petition for certiorari docketed as C.A. G.R. SP No. 66858. In a 22
May 2003 Decision, the Court of Appeals set aside the assailed issuances of DOJ Secretary Perez and
reinstated the 4 August 1999, 1 December 1999 and 16 March 2000 DOJ Resolutions, in due time denying
private respondents' Motion for Reconsideration in a 23 September 2003 Resolution.
Later, Criminal Case Nos. 2503 and 2573 were re-raffled to the Regional Trial Court (RTC) of Quezon City,
Branch 219 and re-docketed as Criminal Case Nos. Q-01-998992-93 [sic], Q-01-100542-43 and Q-01-
100594. Then, pursuant to the 22 May 2003 Decision of the Court of Appeals, the RTC-Branch 219 issued a
resolution finding probable cause to charge private respondents for Murder with Attempted Murder in
Criminal Case No. Q-01-998992-93 [sic], Frustrated Murder in Criminal Case No. Q-01-100542-43,
and Attempted Murderin Criminal Case No. Q-01-100594. The warrants of arrest were accordingly issued
against private respondents, who, undaunted, went up to the Supreme Court to question the Decision of the
Court of Appeals by way of a petition for review on certiorari, docketed as G.R. No. 159962. Soon after, the
Supreme Court promulgated therein its 16 December 2004 Decision, the dispositive portion of which states:
"WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals dated 22 May 2003
which annulled the DOJ Resolution dated March 12, 2001 and reinstated its Resolutions issued on 04
August 1999, 01 December 1999 and 16 March 2000 is AFFIRMED. The Temporary Restraining Order
issued on 18 February 2004 by this Court is hereby LIFTED, and the Regional Trial Court of Quezon City,
Branch 219, is ORDERED to implement its Resolution dated 03 December 2003 relative to the issuance of
warrants of arrest against all the accused. The said court is directed to submit a report thereon within ten
(10) days from receipt hereof."
Private respondents filed a Motion for Reconsideration but the same was denied with finality as the Supreme
Court declared in its 6 June 2005 Resolution that "there is no longer any obstacle to the implementation of
the existing warrants of arrest". Despite the categorical pronouncement, however, private respondents
adamantly filed another motion purportedly for clarification of the 16 December 2004 Decision but which
was in fact an attempt to have the High Court order a re-determination by the trial court of the appropriate
crime with which to charge private respondents. In the 14 August 2005 Resolution, the Supreme Court ruled
thus:
"The Court Resolves to (a) EXPUNGE from the records of this case petitioners' urgent motion for
clarification dated June 25, 2005, xxx; and (b) ADMONISH petitioners and their counsel to pay heed to the
directives of this Court and against misrepresenting the import of its rulings and to desist from any further
unauthorized pleadings UNDER PAIN OF CONTEMPT."
The 16 December 2006 Decision of the Supreme Court became final and executory on July 5, 2005.
Subsequently, due to the inhibition of the presiding judge of the RTC-Branch 219 the criminal cases were
raffled to RTC-Branch 100, whose presiding judge was expressly ordered by the Supreme Court to enforce
the warrants of arrest against private respondents with utmost dispatch in a 12 December 2005 Resolution.
After issuing the Order relative to the enforcement of the warrants of arrest against private respondents,
however, the presiding judge of the RTC-Branch 100 inhibited herself as well from hearing the criminal
cases and the same were re-raffled anew to the RTC-Branch 83, presided by respondent Judge Ralph S. Lee.
Private respondents then filed before RTC-Branch 83 a Motion to Re-Determine the Existence or Non-
Existence of Probable Cause Which May Even Warrant Dismissal - Even of the Appropriate Charges of
Homicide, Frustrated and Attempted Homicides. Private complainants, on the other hand, moved for
respondent Judge Lee's inhibition when the latter failed to act upon a motion for the issuance of Alias
Warrants of Arrest. However, prior to voluntarily inhibiting himself from the subject criminal cases,
respondent Judge Lee issued the assailed 12 May 2006 Order granting private respondents' motion for
redetermination of probable cause and consequently ordering the downgrading of the crimes charged. The
cases were then re-raffled to RTC-Branch 77, presided by respondent Judge Vivencio S. Baclig, who then
issued the second assailed 18 October 2006 Orderdenying a Motion for Reconsideration of the 12 May 2006
Order issued by respondent Judge Lee and setting the arraignment on November 3, 2006. Private
complainants filed a motion for the voluntary inhibition of respondent Judge Baclig, who later denied said
motion and re-set the arraignment on December 11, 2006 in the 22 November 2006
Order.4ChanRoblesVirtualawlibrary
Aggrieved by the orders issued on May 12, 2006 and October 18, 2006, respectively, by Judge Ralph S. Lee
and Judge Vivencio S. Baclig, the State, through the Office of Solicitor General, commenced a special civil
action for certiorari in the CA (CA-G.R. SP No. 97121), alleging that:
RESPONDENT JUDGES COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN ISSUING THE ASSAILED MAY 12, 2006 AND OCTOBER 18,
2006 ORDERS.5ChanRoblesVirtualawlibrary
On November 20, 2006, the Court promulgated its Decision in G.R. No. 173290 adjudging Judge Lee and
Balindong, et al. guilty of indirect contempt,6viz.:
In the present case, private respondents are guilty of indirect contempt for filing the
following:chanRoblesvirtualLawlibrary
(1) Urgent Motion for Clarification of the dispositive portion of the December 16, 2004 Decision in G.R.
No. 159962;
(2) Motion for Determination of Probable Cause and/or Motion to Dismiss the Case and to Quash
Warrant of Arrest (with prayer for suspension of the enforcement of warrant of arrest pending
hearing) filed on September 1, 2005 before Branch 100 of the RTC of Quezon City presided by Judge
Christine Jacob;
507
(3) Motion for Reconsideration of Judge Jacob's January 4, 2006 Order denying their motion dated
September 1, 2005 filed on January 24, 2006;
(4) Motion to Re-Determine the Existence or Non-Existence of Probable Cause Which May Even
Warrant Dismissal - Even of the Appropriate Charges of Homicide, Frustrated and Attempted
Homicide filed before Branch 83 on February 21, 2006.
The December 16, 2004 Decision of the Court in G.R. No. 159962 clearly sustained the filing of two
Informations for Murder with Attempted Murder, two Informations for Frustrated Murder and an
Information for Attempted Murder against private respondents. The Court even directed the implementation
of the arrest warrants against them. This, notwithstanding, private respondents filed a motion for
determination of probable cause and/or dismissal of the case against them. Worse, this was done after being
admonished by the Court to pay heed to its directives under pain of contempt.
With the finality of this Court's Decision, all issues relative to the determination of the proper offenses with
which to charge private respondents had been laid to rest. In continuing to file pleadings and motions
purportedly seeking for the clarification of the proper charges against them, respondents merely rehashed
their tired arguments and unavailing assertions. They did not only succeed in delaying the conduct of the
trial of the aforesaid cases but also willfully and deliberately flouted this Court's directives with their
stubborn refusal to abide by our pronouncement and their incessant nit-picking of issues already resolved
with finality.
In granting respondents' motions for reconsideration and re-determination of probable cause, and
consequently down-grading the charges against respondents in his Order dated May 12, 2006, Judge Lee
contravened this Court's directive in G.R. No. 159962 and in the subject Resolutions. He impudently
substituted his own judgment for that of this Court. Had he thoroughly reviewed the records of the case, it
would have been impossible for him to misread the import of said Decisions and
Resolutions.7ChanRoblesVirtualawlibrary
Thereafter, Judge Lee inhibited from the criminal cases, which were re-assigned to Branch 91 the RTC,
presided by Judge Lita Tolentino-Genilo, who, on May 24, 2007, issued an order: (a) reinstating the charges
against Balindong, et al. for two counts of murder with attempted murder, two counts of frustrated murder,
and one count of attempted murder to conform with the decision promulgated in G.R. No. 159962; (b)
issuing alias warrants of arrest against them; and (c) inhibiting herself from further hearing the
cases.8 Subsequently, the criminal cases were re-raffled to Branch 76, whose Presiding Judge was
respondent Judge Alexander S. Balut.
Aggrieved by the dispositions of Judge Tolentino-Genilo, Balindong, et al. filed their Motion for
Reconsideration and/or Recall Suspend Order of Arrest.9 As the new trial judge, however, Judge Balut
opted to defer action to await the Court's ruling in G.R. No. 177600. 10 He further suspended the enforcement
of the alias warrants issued for the arrest of Balindong, et al.11 Hence, Limbona commenced G.R. No.
178684.
On April 24, 2007, the CA promulgated its ruling in CA-G.R. SP No. 97121,12 disposing:
WHEREFORE, premises considered, the petition is hereby GRANTED. The 12 May 2006 Order of the
Regional Trial Court of Quezon City, Branch 83, as well as, the 18 October 2006 Order of the Regional
Trial Court of Quezon City, Branch 77 are REVERSED and SET ASIDE.

SO ORDERED.13ChanRoblesVirtualawlibrary
The CA declared the assailed orders of Judge Lee and Judge Baclig to be in clear defiance of the Court's
decision in G.R. No. 159962.14 It pronounced that Judge Lee erred in opining that the Court had only
sustained in G.R. No. 159962 the executive determination of probable cause by the DOJ, and had not
touched on what appropriate crimes should have been charged against Balindong, et al.;15 and that Judge
Baclig similarly erred in holding that the Court "did not prohibit the trial judge from determining the
appropriate crime to be filed against the accused [once] the cases were brought to his sala." 16 It pointed out
that:
There are no two ways to construe the 16 December 2004 Decision of the Supreme Court relative the
appropriate charges to be filed against private respondents. In upholding the Court of Appeals' ruling that
the DOJ should not have entertained a third motion for reconsideration, the Supreme Court did not merely
touch upon a procedural infirmity but ruled further on private respondents' material objections to the
propriety of the murder charge against them. x x x
xxxx
To reiterate the rule, determination of qualifying circumstances is a matter of evidence. Thus, as pointed out
by petitioner, by arbitrarily downgrading the original charge from murder, frustrated murder and attempted
murder to homicide, frustrated homicide and attempted homicide, respondent Judge Lee effectively denied
the prosecution the opportunity to prove the attendance of qualifying circumstances in a fullblown
trial.17ChanRoblesVirtualawlibrary
The CA took note of the ruling of the Court in G.R. No. 173290, which said in part:
Finally, whatever other grounds for opposition raised by private respondents in their Comment to the
Petition and Rejoinder to Petitioner's Reply, the resolution of this case has been simplified by the
promulgation of the Supreme Court 20 November 2006 Decision in the petition for indirect contempt filed
against private respondents. In granting private respondents' motion for reconsideration and re-detcrmination
of probable cause, and consequently downgrading the charges, the Supreme Court found respondent Judge
Lee guilty of indirect contempt for having clearly contravened the Court's directive in G.R. No. 159962 and
impudently substituting his own judgment for that of the Court. It further found private respondents'
persistent attempts to raise issues long settled by a final and executory judgment a contumacious defiance of
the Court's authority. x x x
xxxx
Accordingly, private respondents have been penalized for their contumacious acts and the issue concerning
the proper crimes with which they should be charged has been laid to rest.18ChanRoblesVirtualawlibrary
Balindong, et al. have appealed the CA's decision in CA-G.R. SP No. 97121 (G.R. No. 177600).
Issues
In G.R. No. 177600, Balindong, et al. submit the following issue:
WHETHER OR NOT AFTER THE EXHAUSTION OF PRELIMINARY INVESTIGATION WHICH
REACHED THE DEPARTMENT OF JUSTICE BY WAY OF PETITION FOR REVIEW, TO THE
COURT OF APPEALS AND ULTIMATELY TO THIS HONORABLE COURT (IN G.R. NO. 159962),
AND AFTER THE PROSECUTION'S STAND SUSTAINING THE ORIGINAL INFORMATIONS FOR
MURDER, FRUSTRATED AND ATTEMPTED HAD BEEN MADE FINAL AND EXECUTORY, THE
RTC - COURT (A COURT OF GENERAL JURISDICTION) AND/OR YOUR PETITIONERS
ACCUSED, ARE PRECLUDED/ PROHIBITED FROM INVOKING SECTION 14, RULE 110 OR
SECTION 19, RULE 119 OF THE 2000 REVISED RULES ON CRIMINAL PROCEDURE ESPECIALLY
508
SINCE IT WAS MADE FOR THE FIRST TIME AFTER YOUR PETITIONERS' EXECUTIVE REMEDY
FROM TFIE PRELIMINARY INVESTIGATION TO A PETITION FORE REVIEW (BEFORE THE
DOJ), THE APPELLATE COURT AND THIS HONORABLE COURT WAS EXHAUSTED AND
NOTHING MORE.19ChanRoblesVirtualawlibrary
In G.R. No. 178684, Limbona raises as the sole ground for her petition to cite in contempt of court Judge
Balut and Balindong, et al. that:
Petitioner respectfully submits the foregoing acts of Respondent in willfully disobeying the decision and
resolutions issued by the Hon. Supreme Court in G.R. No. 159962 and G.R. 173290 (sic), which tend to
impede upon or obstruct the administration of justice, constitutes an indirect contempt which ought to be
punished.20ChanRoblesVirtualawlibrary
Rulings of the Court
G.R. No. 177600
The petition for review on certiorari in G.R. No. 177600 is denied for being bereft of merit.
Despite conceding that the Decision promulgated in G.R. No. 159962 had long become final and
executory,21 Balindong, et al. insist that they were not precluded from still seeking from the RTC as the trial
court the judicial determination of probable cause against them because all that the Court had upheld in G.R.
No. 159962 was only the executive determination of probable cause. They argue that the Court did not
thereby prevent their resort to available judicial remedies, like filing the proper motions for the judicial
determination of probable cause in the trial court,22 anchoring their argument on Section 14, Rule 110, in
relation to Section 19, Rule 119, both of the Rules of Court
The insistence of Balindong, et al. is legally unwarranted.
To recall, G.R. No. 159962 was an appeal by Balindong, et al. to review the judgment the CA had
promulgated on May 22, 2003: (a) granting the petition for certiorari of Limbona; (b) setting aside DOJ
Resolution issued on March 12, 2001 by then Secretary of Justice Hernando Perez favorably acting on
the third motion for reconsideration of Balindong, et al. relative to the proper offenses to be charged against
them despite the denial with finality of their first and second motions for reconsideration; and (c) reinstating
the DOJ Resolutions dated August 4, 1999, December 1, 1999 and March 16, 2000 issued by the
predecessors of Secretary Perez.23 It is noted that in his assailed Resolution of March 12, 2001, Secretary of
Justice Perez had dropped Amer Oden Balindong and Ali S. Balindong from the informations, and had
directed the Office of the Provincial Prosecutor of Lanao del Sur "to cause the filing of the amended
information for double homicide with multiple frustrated homicide against Mayor Anwar Berua Balindong,
Lt. Col. Jalandoni Cota and PO1 Kennedy Balindong."24
In granting the petition for certiorari of Limbona, the CA declared that Secretary of Justice Perez had
committed grave abuse of discretion amounting to lack or excess of jurisdiction, firstly, by totally
disregarding the clear provision of Section 13 of DOJ Circular No. 70 (governing appeals) prohibiting
second or further motions for reconsideration; and, secondly, by acting on and granting the third motion for
reconsideration despite the grounds relied upon by Balindong, et al. being previously raised in the first and
second motions for reconsideration and being already fully passed upon by his predecessors in office in the
guise of serving the interest of justice and as an exception to Section 13 of DOJ Circular No. 70.
The Court disposed in G.R. No. 159962 as follows:
WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals dated 22 May 2003 which
annulled the DOJ Resolution dated 12 March 2001 and reinstated its Resolutions issued on 04 August 1999,
01 December 1999 and 16 March 2000 is AFFIRMED. The Temporary Restraining Order issued on 18
February 2004 by this Court is hereby LIFTED, and the Regional Trial Court of Quezon City, Branch 219,
is ORDERED to implement its Resolution dated 03 December 2003 relative to the issuance of warrants of
arrest against all the accused. The said Court is directed to submit a report thereon within ten (10) days from
receipt hereof.
Let a copy of this Decision be furnished the Department of Justice for its information and appropriate action.
SO ORDERED.25ChanRoblesVirtualawlibrary
The language and meaning of the Decision promulgated in G.R. No. 159962, that the proper criminal
charges against Balindong, et al. were two counts of murder with attempted murder, two counts of
frustrated murder, and one count of attempted murder, were clear and forthright enough to require
elaboration. Accordingly, the Court, by thereby ordering the RTC "to implement its Resolution dated 03
December 2003 relative to the issuance of warrants of arrest against all the accused," did not need to dwell
specifically on the judicial determination of probable cause independently of the executive determination.
We should remind that the trial judge, by issuing the warrants of arrest, already found the existence of
probable cause against Balindong, et al. Indeed, the act of issuing the warrant of arrest upon filing of the
information and supporting papers implied that the judge has determined the existence of probable cause for
the offenses charged. It is then superfluous for the accused to seek the judicial determination of probable
cause on the pretext that the trial court should still act and proceed independently of the executive
determination of probable cause to charge the proper offense. Rule 112 of the Rules of Court relevantly
provides:
Sec. 6. When warrant of arrest may issue. — (a) By the Regional Trial Court. — Within ten (10) days from
the filing of the complaint or information, the judge shall personally evaluate the resolution of the prosecutor
and its supporting evidence. He may immediately dismiss the case if the evidence on record clearly fails to
establish probable cause. If he finds probable cause, he shall issue a warrant of arrest, or a commitment
order if the accused has already been arrested pursuant to a warrant issued by the judge who conducted the
preliminary investigation when the complaint or information was filed pursuant to section 7 of this Rule. In
case of doubt on the existence of probable cause, the judge may order the prosecutor to present additional
evidence within five (5) days from notice and the issue must be resolved by the court within thirty (30) days
from the filing of the complaint or information. (bold Emphasis supplied)
xxxx
Moreover, Balindong, et al. could not reasonably support their position that they could still have the trial
court determine the existence of probable cause in their criminal cases independently of the executive
determination of probable cause by the DOJ by relying on Section 14, Rule 110, in relation to Section 19,
Rule 119, both of the Rules of Court.
Section 14 of Rule 110 states:
Section 14. Amendment or substitution. — A complaint or information may be amended, in form or in
substance, without leave of court, at any time before the accused enters his plea. After the plea and during
the trial, a formal amendment may only be made with leave of court and when it can be done without
causing prejudice to the rights of the accused.
However, any amendment before plea, which downgrades the nature of the offense charged in or excludes
any accused from the complaint or information, can be made only upon motion by the prosecutor, with
notice to the offended party and with leave of court. The court shall state its reasons in resolving the motion
and copies of its order shall be furnished all parties, especially the offended party. (n)
509
If it appears at any time before judgment that a mistake has been made in charging the proper offense,
the court shall dismiss the original complaint or information upon the filing of a new one charging the
proper offense in accordance with section 19, Rule 119, provided the accused would not be placed in double
jeopardy. The court may require the witnesses to give bail for their appearance at the trial. (14a)
(bold Emphasis supplied)
Ostensibly, Section 14, supra, applies only to a situation in which there has been a mistake on the part of
public prosecutor in charging the proper offense.
It becomes logical to ask: Did the public prosecutor make a mistake in charging the proper offenses against
Balindong, et al.?
The answer is no.
There was no mistake in charging the proper offenses. Balindong, et al. fully exhausted the procedure to
determine the proper offenses to be charged against them by going all the way up to the Secretary of Justice.
Their quest was ultimately settled with finality by the Secretary of Justice denying their second motion for
reconsideration and declaring that such offenses were two counts of murder with attempted murder, two
counts of frustrated murder, and one count of attempted murder. They thereafter attempted to undo such
final determination by filing a third motion for reconsideration in the DOJ, and they initially succeeded
because Secretary Perez directed the Office of the Provincial Prosecutor of Lanao del Sur "to cause the
filing of the amended information for double homicide with multiple frustrated homicide against Mayor
Anwar Berua Balindong, Lt. Col. Jalandoni Cota and PO1 Kennedy Balindong," and dropped Amer Oden
Balindong and Ali S. Balindong from the informations. But their success was overturned by the CA, whose
nullification of Secretary Perez's favorable action on their third motion for reconsideration was affirmed in
G.R. No. 159962. Thus, this Court even issued its judicial imprimatur on the probable cause for two counts
of murder with attempted murder, two counts of frustrated murder, and one count of attempted murder. For
Balindong, et al. to rely on Section 14, supra, as basis for the RTC to still reach a determination of probable
cause different from those sanctioned in G.R. No. 159962 would be untenable.
G.R. No. 178684
We next deal with the contempt charge of Limbona against Judge Balut who, by his order of July 16, 2007,
deferred action on the Motion for Reconsideration and/or Recall Suspend Order of Arrest of Balindong, et
al., and suspended the enforcement of the alias warrants of arrest.26
Limbona claims that Judge Balut's actions constituted a disobedience to the decisions of the Court in G.R.
No. 159962 and G.R. No. 173290 because the suspension of the enforcement of the alias warrants of arrest
"has a predilection to put the dignity of the [Court] in disrepute, obstruct the administration of justice, or
interfere with the disposition or (sic) the court's business in the performance of its function in an orderly
manner."27 She also points out that the "order to suspend the enforcement of the said warrants has the same
effect of a temporary restraining order,"28 which, in effect, "pre-empted the [Court's] resolution of the prayer
for the issuance of the temporary restraining order/injunction." 29
Let us also look at Judge Balut's order of July 16, 2007, in which he stated as follows:
Without necessarily addressing the merit of the motion, that is, whether or not the alias warrants of arrest
issued against the accused should be recalled or set aside, and to avert any conflicting determinations on the
matter at hand, the Court deems it but prudent to defer any action hereto considering that the accused's
petition for review in G.R. No. 177600 assailing the Court of Appeals' judgment in CA-G.R. SP No. 97121,
which precipitated the issuance of the order of arrest sought to be reconsidered/recalled by herein accused, is
still pending before the Honorable Supreme Court for final determination.

In the meantime, while awaiting resolution of the said petition for review in G.R. No. 177600, the
enforcement of the alias warrants of arrest, dated May 25, 2007, issued against the accused is hereby
suspended.30ChanRoblesVirtualawlibrary
Judge Balut has justified his actions by invoking judicial courtesy and asserting his judicial discretion on the
matters in question, to wit:
As a backgrounder, five (5) consolidated criminal cases were filed charging the accused Mayor Anwar
Berua Balindong et al. with murder with attempted murder, frustrated murder and attempted murder.
Thereafter, a legal battle ensued concerned mainly on what is the appropriate crime with which to charge the
accused. After several years of legal haggling, flip-flopping of charges and the inhibition of five (5) trial
judges, these cases finally landed in the undersigned's sala with a pending incident: the accused's MOTION
FOR RECONSIDERATION AND/OR RECALL SUSPEND ORDER OF ARREST. Conscientious of his
duty to dispose of pending incidents with dispatch, the undersigned, fully aware that any resolution of the
said incident would spark controversy, which would necessarily entail another series of legal maneuverings
resulting in the further delay of the disposition of these cases, resolved to withhold action thereon and
deemed it best to observe judicial courtesy and await this Honorable Court's determination of the accused's
petition for review in G.R. No. 177600.
No less than the imperative of judicial courtesy impelled the undersigned Presiding Judge to issue the order
dated July 16, 2007. A PETITION FOR REVIEW assailing the Court of Appeals' Decision reversing and
setting aside the May 12, 2006 Order of the Regional Trial Court of Quezon City (Branch 83), as well as the
October 18, 2006 Order of the Regional Trial Court of Quezon City (Branch 77) is pending before this
Honorable Court. It is to be recalled that in the May 12, 2006 Order, Judge Ralph S. Lee downgraded the
offenses charged in the informations from Murder with Attempted Murder, Frustrated Murder and
Attempted Murder, to Double Homicide with Attempted Homicide, Multiple Frustrated Homicide and
Attempted Homicide, respectively. In the October 18, 2006 Order, Judge Vivencio S. Baclig denied the
prosecution's MOTION FOR RECONSIDERATION thereof. In ordering the suspension of the enforcement
of the alias warrants of arrest dated May 25, 2007, the undersigned, not unmindful of the Decision dated
December 16, 2004 in G.R. No. 159962, the two Resolutions dated June 6, 2005 and December 12, 2005,
and the Decision dated November 20, 2006 in G.R. No. 173290, merely exercised his judicial discretion. He
most respectfully submits that the issuance of the Order downgrading the offenses is a supervening fact
which now divides the procedural antecedents of the case, i.e, "prior to the order dated May 12, 2006" and
"after said order". Prior to the order, this Honorable Court in ordering the Regional Trial Court of Quezon
City (Branch 219) to implement its Resolution dated December 3, 2003 relative to the issuance of warrants
of arrest against all the accused, resolved that there is no longer any obstacle to the implementation of the
existing warrants of arrest, and ordered Judge Marie Christine A. Jacob (Presiding Judge of the Regional
Trial Court of Quezon City, Branch 100) to enforce the warrants of arrest against the petitioners on
December 3, 2004 with utmost dispatch. In this stage, there could certainly be no question or issue as to the
enforcement of the warrants of arrest. The Court indeed spoke with finality. However, "after the Order, "
where the undersigned is, another issue evolved, which issue is still pending final determination by the
Honorable Court. The foundation for this Honorable Court's issuances, "before the order" could not be said
to be the same judicial foundation now, "after the order," as to hold the undersigned for contempt in
suspending the enforcement of the warrants of arrest. The legal milieu has changed. x x
x31ChanRoblesVirtualawlibrary
It is clear that Judge Balut did not thereby disobey the decisions of the Court in G.R. No. 159962 and G.R.
No. 173290. To start with, there was no indication in his Order that bad faith had moved him to suspend the
implementation of the warrants of arrest against Balindong, et al., or that he had thereby acted with a willful
and deliberate intent to disobey or to ignore the Court's bidding, or to cause injustice to any of the parties. In
the absence of the clear showing of bad faith on his part, his being prudent could only be an error of
510
judgment, for which he could not be held to account. Secondly, the history of the criminal cases, from the
transfer of venue at the behest of Secretary Tuquero from Cagayan de Oro to Quezon City; to the successive
inhibitions of several RTC Judges; to the succession of petitions for certiorari bearing on the handling of the
criminal cases brought to the higher courts, including this Court, 32 must have probably persuaded Judge
Balut to tread the path of prudence and caution. Indeed, he expressed in his Order of July 16, 2007 the desire
"to avert any conflicting determinations" pending the promulgation of the Court's Decision in G.R. No.
177600. And, thirdly, his actuations were entirely different from those of Judge Lee's, who downgraded the
offenses from two counts of murder with attempted murder, two counts of frustrated murder, and one count
of attempted murder to double homicide with multiple frustrated homicide, and ordered the issuance of the
warrants of arrest for such downgraded offenses. Judge Lee thereby directly contradicted the ruling in G.R.
No. 159962.
Contempt of court is defined in jurisprudence in this manner:
Contempt of court is defined as a disobedience to the Court by acting in opposition to its authority, justice
and dignity. It signifies not only a willful disregard or disobedience of the courts orders, but such conduct
which tends to bring the authority of the court and the administration of law into disrepute or in some
manner to impede the due administration of justice. Contempt of court is a defiance of the authority, justice
or dignity of the court; such conduct as tends to bring the authority and administration of the law into
disrespect or to interfere with or prejudice parties litigant or their witnesses during
litigation.33ChanRoblesVirtualawlibrary
The contempt power of the courts has been discussed in Sison v. Caoibes, Jr.,34 to wit:
Thus, the power to declare a person in contempt of court and in dealing with him accordingly is an inherent
power lodged in courts of justice, to be used as a means to protect and preserve the dignity of the court, the
solemnity of the proceedings therein, and the administration of justice from callous misbehavior, offensive
personalities, and contumacious refusal to comply with court orders. Indeed, the power of contempt is power
assumed by a court or judge to coerce cooperation and punish disobedience, disrespect or interference with
the courts orderly process by exacting summary punishment. The contempt power was given to the courts in
trust for the public, by tradition and necessity, in as much as respect for the courts, which are ordained to
administer the laws which are necessary to the good order of society, is as necessary as respect for the laws
themselves.35ChanRoblesVirtualawlibrary
Verily, the power of the courts to punish for contempt is to be exercised cautiously, sparingly, and
judiciously.36 Self-restraint in wielding contempt powers should be the rule unless the act complained of is
clearly contumacious. An act, to be contumacious, must manifest willfulness, bad faith, or deliberate intent
to cause injustice.37
WHEREFORE, the Court DENIES the petition for review on certiorari in G.R. No.
177600; DISMISSESthe petition for contempt in G.R. No. 178684; AFFIRMS theDecision promulgated
on April 24, 2007 by the Court of Appeals in CA-G.R. SP No. 97121; and ORDERS the petitioners in G.R.
No. 177600 to pay the costs of suit.
The Regional Trial Court, Branch 76, in Quezon City is DIRECTED to forthwith resume the proceedings in
Criminal Case No. Q-01-99892, Criminal Case No. Q-01-99893, Criminal Case No. Q-01-100542, Criminal
Case No. Q-01-100543 and Criminal Case No. Q-01-100594; and to report its compliance with this decision
within 30 days from notice.
SO ORDERED.chanroblesvirtuallawlibrary
 SECOND DIVISION
July 26, 2017
G.R. No. 199825
BRO. BERNARD OCA, BRO. DENNIS MAGBANUA, CIRILA N. MOJICA, ALEJANDRO N.
MOJICA, JOSEFINA PASCUAL, SILVESTRE PASCUAL AND ST. FRANCIS SCHOOL OF
GENERAL TRIAS, CAVITE, INC., Petitioners
vs.
LAURITA CUSTODIO, Respondent
DECISION
LEONEN, J.:
1 2
This resolves a Petition for Review on Certiorari assailing the May 25, 2011 Decision and the December
19, 2011 Resolution3 of the Court of Appeals in CA-G.R. CR. No. 31985. The assailed Decision affirmed
theRegional Trial Court Decision,4 which found petitioners Bro. Bernard Oca, Bro. Dennis Magbanua,
Cirila N. Mojica, Alejandro N. Mojica, Josefina Pascual, Atty. Silvestre Pascual, and St. Francis School of
General Trias, Cavite, Inc. (petitioners) guilty of Indirect Contempt.1âwphi1 The assailed Resolution denied
petitioners' Motion for Reconsideration.5
This indirect contempt case stemmed from an intra-corporate controversy among the Board of Trustees of
petitioner St. Francis School of General Trias, Cavite, Inc. (St. Francis School). 6
St. Francis School was established with the assistance of the La Salle brothers on July 9, 1973 by respondent
Laurita Custodio (Custodio), petitioner Cirila N. Mojica (Cirila), petitioner Josefina Pascual (Josefina),
Monsignor Felix Perez, and Brother Vernon Poore.7 These five (5) incorporators served as St. Francis
School's Board of Trustees until the latter two (2) passed away. 8
Without a written agreement, the La Salle brothers agreed to give the necessary supervision to establish the
school's academic foundation.9
On September 8, 1988, the incorporators and the La Salle brothers formalized their arrangement in a
Memorandum of Agreement, under which De La Salle Greenhills (La Salle) would supervise the academic
affairs of St. Francis School to increase enrollment. La Salle appointed supervisors to sit in the Board of
Trustees without voting rights.10
In 1998, petitioner Bro. Bernard Oca (Bro. Oca) became a member of St. Francis School as a La Salle-
appointed supervisor. He sat in the Board of Trustees and was later elected as its Chairman and St. Francis
School's President.11 In 2000, petitioner Bro. Dennis Magbanua (Bro. Magbanua) was also admitted as a La
Salle-appointed supervisor.12 He sat as a trustee and was later elected as Treasurer of St. Francis School. 13
Sometime in August 2001, the members of the Board of Trustees came into a disagreement regarding the
school's administrative structure and La Salle's supervision over the school. Cirila, Josefina, Bro. Oca, and
511
Bro. Magbanua wanted to expand the scope of La Salle's supervision to includematters relating to the
school's finances, administration, and operations. 14
This was opposed by Custodio.15 After several incidents relating to the disagreement, Custodio filed a
complaint against St. Francis School, Bro. Oca, and Bro. Magbanua on June 7, 2002 with Branch 23,
Regional Trial Court, Trece Martires, Cavite. She alleged that Bro. Oca and Bro. Magbanua were never
qualified to sit in the Board of Trustees.16 She also prayed for a Temporary Restraining Order to prevent
Bro. Oca from calling a special membership meeting to remove her from the Board of Trustees. 17
This case was dismissed.18 Custodio was subsequently removed from the Board of Trustees and as
Curriculum Administrator.19
Custodio filed a motion for reconsideration of the dismissal but eventually withdrew her appeal to file a new
suit instead.20
On October 3, 2002, Custodio again filed a complaint against petitioners for violating the Corporation Code
with Branch 21, Regional Trial Court, Imus, Cavite. 21 She sought to disqualify Bro. Oca and Bro. Magbanua
as members and trustees of the school and to declare void all their acts as President and Treasurer,
respectively.22 She likewise prayed for a temporary restraining order and/or a preliminary injunction to
enjoin the remaining board members from holding meetings and to prevent Bro. Oca and Bro. Magbanua
from discharging their functions as members, trustees, and officers of St. Francis School. 23 This case was
docketed as SEC Case No. 024-02.24
On October 8, 2002, the Regional Trial Court heard Custodio's prayer for the issuance of a Temporary
Restraining Order.25
The day after the hearing, Custodio filed a Manifestation and Motion dated October 9, 2002. She alleged
that after the hearing for the Temporary Restraining Order, the counsel for petitioners went to St. Francis
School to instruct several parents not to acknowledge Custodio's administration as she had been removed as
a member, trustee, and curriculum administrator and that her complaint had been dismissed. The parents
were also allegedly directed to pay the students' matriculation fees exclusively to petitioner Alejandro N.
Mojica (Alejandro), son of petitioner Cirila. Alejandro held office at the Rural Bank of General Trias, Inc.
which was allegedly owned by the family of petitioner Josefina.26 This meeting allegedly caused 15 teachers
to hold a strike, which nearly disrupted classes and caused parents to request the early dismissal of their
children for fear that violence would ensue.27 Custodio reiterated her prayer for a Temporary Restraining
Order. She moved that the hearing be converted into an injunction hearing or that a status quo order be
issued to allow her to continue functioning as school director and curriculum administrator. 28
Custodio also filed a Motion for Clarification praying that the trial court clarify to whom the school's fees
should be paid while her Complaint and Manifestation and Motion were still pending. Petitioners allegedly
manifested that the payment of matriculation fees must be made to Alejandro. However, Custodio pointed
out that Alejandro was not the school cashier and that the Rural Bank of General Trias, Inc. was not
authorized to receive payments for St. Francis School. She also manifested that prior to October 8, 2002, the
school cashier was Ms. Herminia Reynante (Reynante).29 This Motion was set for hearing on October 18,
2002.30
On October 21, 2002, the Regional Trial Court issued an Order designating Reynante to act as school
cashier "with authority to collect all fees" and, together with Custodio, "to pay all accounts." 31 The trial
court also directed all parties in the case to submit a report on and to turn over to Reynante all money
previously collected, thus:
Regarding the collection of matriculation fees and other collectibles, Ms. Herminia Reynante is hereby
designated by the Court to act as cashier of the school to the exclusion of others with authority to collect all
fees and, together with plaintiff Laurita Custodio, to pay all accounts. Said authority shall continue until the
matter of the application for temporary restraining order and preliminary injunction is heard and resolved.
This is hereby ordered so that an orderly operation of the school will be achieved.
Plaintiff and defendants, as well as Mr. Al Mojica, are directed to turn-over to Ms. Herminia Reynante all
money previously collected and to submit a report on what have been collected, how much, from whom, and
the dates collected Effective October 22, 2002, Ms. Herminia Reynante shall submit to the Court, to the
plaintiff and to all the defendants a monthly report of all receivables collected and all disbursements made.
SO ORDERED.32 (Emphasis supplied)
Petitioners filed a motion for reconsideration, alleging that they would have proven that Reynante lacked the
moral integrity to act as court-appointed cashier had they been given the opportunity to be heard. 33
On January 3, 2003, the Regional Trial Court denied reconsideration. 34
On February 21, 2003, petitioners filed an Explanation, Manifestation and Compliance. They alleged that
they partially complied with the October 21, 2002 Order by submitting an accounting on the tuition fee
collections and by turning over to Reynante a manager's check in the amount of P397,127.64 payable to St.
Francis School.35 The amount allegedly represented the school's matriculation fees from October to
December 2002.36 However, they alleged that Reynante refused to accept the check and required that the
amount be turned over in cash or in a check payable to cash. Thus, petitioners placed the check in the
custody of the Regional Trial Court for safekeeping. 37
38
Custodio filed a Comment dated February 26, 2003. Custodio manifested that petitioners did not even
substantially comply with the October 21, 2002 Order because it excluded from its accounting and turnover
the following amounts:
1) ₱4,339,601.54 deposited in Special Savings Deposit No. 239 of the Rural Bank of General
Trias, Inc.;
2) ₱5,639,856.11 deposited in Special Savings Deposit No. 459 of the Rural Bank of General
Trias, Inc.;
3) ₱92,970.00 representing fees paid by the school canteen; and
4) All other fees collected from January 2003 to February 19, 2003. 39
512
Custodio also claimed that petitioners violated the trial court order that only she and Reynante were
authorized to pay the outstanding accounts of St. Francis School. Petitioners allegedly made salary payments
to four (4) employees who had resigned. 40
On March 24, 2003, the Regional Trial Court issued another Order 41 directing petitioners to fully comply
with its earlier order to submit a report and to turn over to Reynante all the money they had collected:
This treats of defendants' explanation, manifestation and compliance and plaintiff's comments thereto.
A pernsal of the allegations of defendants' pleading shows that they merely turned-over a manager's check in
the amount of ₱397,127.64 representing money collected from the students from October 2002 to December
2002. The Order of October 21, 2002 directed plaintiff and defendants, as well as, Mr. Al Mojica to turn-
over to Ms. Herminia Reynante all money previously collected and to submit a report on what have been
collected, how much, from whom and the dates collected.
Defendants and Mr. Al Mojica are hereby directed, within ten days from receipt hereof, to submit a report
and to turn-over to Ms. Herminia Reynante all money collected by them, more particularly:
(1) ₱4,339,601.54 deposited in Special Savings Deposit No. 239 (Rural Bank of Gen. Trias, Inc.);
(2) ₱5,639,856. l 1 deposited in Special Savings Deposit No. 459 (Rural Bank of Gen. Trias, Inc.);
(3) ₱92,970.00 representing amount paid by the school canteen;
(4) Other fees collected from January 2003 to Febrnary 19, 2003; and
(5) Accounting on how and how much defendants are paying Ms. Daisy Romero and three (3)
other teachers who already resigned.
SO ORDERED.42
Petitioners filed a Manifestation, Observation, Compliance, Exception and Motion on April 18, 2003,
praying, among others, that the trial court issue an order excluding from its March 24, 2003 Order the
amounts which were not covered in its October 21, 2002 Order.43
On August 5, 2003, the Regional Trial Court issued an Order denying all motions raised in petitioners'
Manifestation, Observation, Compliance, Exception and Motion and declared that they had not complied
with the March 24, 2003 Order:44
This treats of defendants' manifestation, observation, compliance, exception and motion dated April 18,
2003, plaintiff's comment/opposition and defendants' rejoinder thereto filed on July 2, 2003.
Defendants are asking the Court first to set aside its orders dated October 21[, 2002] and March 24, 2003 for
having been issued "without notice and hearing" and in "acting without or in excess of its
authority/jurisdiction and with grave abuse of discretion amounting to lack or excess of jurisdiction" ...
With respect to the first matter, the motion is denied for being a prohibited pleading under Section 8 of the
Interim Rules of Procedure for Intra-Corporate Controversies (A.M. No. 01-2-04-SC). The motion which
assails the two questioned orders is actually a motion for reconsideration but worded differently - "motion to
set aside March 24, 2003 Order" but both have the same purpose and objective and that is to reconsider the
order(s).
....
On the contrary, the court found out that defendants have not complied with the order of the court dated
March 24, 2003 directing defendants and Mr. Al Mojica to submit a report and to turn over to Ms. Herminia
Reynante all money collected by them, more particularly:
1. ₱4,339,601.54 deposited in Special Savings Deposit No. 239 (Rural Bank of Gen. Trias, Inc.)
2. ₱5,639,856.11 deposited in Special Savings Deposit No. 459 (Rural Bank of Gen. Trias, Inc.)
3. ₱92,970.00 representing amount paid by the school canteen.
4. Other fees collected from January 2003 to February 19, 2003.
5. Accounting on how and how much defendants are paying Ms. Daisy Romero and the three (3) other
teachers who already resigned.
Accordingly, the defendants and Mr. Al Mojica are hereby directed to comply with the aforementioned
order of March 24, 2003, within ten days from receipt hereof.
....
SO ORDERED.45
In the meantime, La Salle served Custodio a notice dated January 4, 2003, that they were terminating the
Memorandum of Agreement with St. Francis School.46
On August 21, 2003, the Regional Trial Court issued an Order granting Custodio's Manifestation and
Motion dated October 9, 2002 and issuing a status quo order 47 allowing Custodio to discharge her functions
as school director and curriculum administrator.48 The trial court ruled in favor of Custodio when it found
that petitioners had already established another school, the Academy of St. John (Academy of St. John) in
Sta. Clara, General Trias, Cavite:49
This treats of plaintiff's manifestation and motion praying that the court "immediately issue a temporary
restraining order ... where plaintiff will be allowed to continue discharging the functions of a school director
and curriculum administrator ... "
513
During the hearing of the said motion and manifestation on October 11, 2002, both parties and counsel
agreed before the court that no incident similar to what happened on October 8, 2002 will occur while the
motion is being heard.
Plaintiff and defendants presented evidence, testimonial and documentary, to prove their respective causes.
It took them nine months to present their evidence before the matter was submitted for the court's resolution.
After a thorough review of all the evidences presented by both parties, the Court is inclined to rule in favor
of the plaintiff. The [pieces of] evidence of both parties are convincing. But, the factor that convinced the
Court to rule in favor of plaintiff was the information conveyed to the court by plaintiff and admitted by
defendants, through their counsel, that another school named Academy of St. John, a new La Sallian
Supervised School in Sta. Clara, General Tria[s], Cavite, was opened by defendants Josefina A. Pascual and
Cirila N. Mojica and their respective families. In a brochure handed by plaintiff's counsel to the court during
the hearing on June 17, 2003 with a heading of Academy of Saint John, De La Salle[-] Supervised, General
Tria[s], Cavite, it said that "such idea was conceived as a result of the corporate problems and the never
ending dispute in a former La Salle[-]supervised school that finally brought confusion and havoc in the said
community."
It further said that "alarmed with the impending loss of the La Salle Supervision which they both thought of
leaving it as a legacy to the youth, Mrs. Pascual and Mrs. Mojica together with their respective families were
convinced to continue their mission of spreading quality education etc."
It appears from the brochure that defendants Pascual and Mojica have set up another school in the same
municipality where the St. Francis School is located. The name of the school is Academy of St. John. The
Academy of St. John likewise offers the same courses as th[ose] offered by St. Francis [S]chool. Needless to
state, this action of defendants Pascual and Mojica is very inimical to the interest of St. Francis School as the
Academy of St. John put up by the aforementioned defendants is in direct competition with St. Francis
School. In other words, a conflict of interest now exists insofar as defendants Pascual and Mojica are
concerned in view of their establishment of the Academy of St. John which is of the same kind and of the
same nature of business as that of St. Francis School. One cannot serve two masters a[t] the same time. And
as already intimated above, considering that there are now two competingschools in the same locality where
defendants Pascual and Mojica hold an interest, they cannot be expected to give their full devotion and
cooperation to one without being disloyal and unfaithful to the other.
WHEREFORE, in view of the foregoing, the motion is granted. Accordingly, a status quo order is hereby
issued wherein the plaintiff is hereby allowed to continue discharging her functions as school director and
curriculum administrator as well as those who are presently and actually discharging functions as school
officer[s] to continue performing their duties until the application for the issuance of a temporary restraining
order is resolved.
SO ORDERED.50
Petitioners filed their Motion for Clarification,51 They alleged that the bulk of the money ordered to be
turned over to Custodio and Reynante was allotted to St. Francis School's teachers' retirement fund.
Considering that it must be preserved, petitioners raised several queries. They wanted to know if Custodio
and Reynante would use the money for other purposes other than for the teachers' retirement benefit and if
Custodio and Reynante would be required to file a bond to guaranty its safekeeping and exclusive use as
teacher's retirement compensation. Finally, they asked who would be held liable in case of Custodio and
Reynante's unlawful use of this fund.52
On September 2, 2003, Custodio filed the Petition to Cite Respondents in Contempt of Court 53 under Rule
71 of the Rules of Court.54 She likewise prayed that an order be issued reiterating the Orders dated October
21, 2002, March 24, 2003, and August 5, 2003. 55
In response to petitioners' Motion for Clarification, the trial court issued an Order dated October 8,
200356 clarifying that the retirement fund was to be held in trust by Custodio and Reynante. It also directed
Custodio and Reynante to file a bond of ₱300,000.00 each.57 Later, it ordered petitioners to comply with the
mandate in the March 24, 2003 and August 5, 2003 Orders and directed them to disclose to the court the
total amount of the fund deposited and reserved for teachers' retirement benefit and its bank details: 58
This treats of the motion for clarification filed by the defendants through counsel.
The motion sprung from the Order dated March 24, 2003 and again reiterated in the Order of August 5, 2003
which required the defendants and Mr. Al Mojica to turn-over to Ms. Herminia Reynante all the money
which [is] in their possession enumerated in the aforesaid orders.
Considering that the bulk of the money pertains to the teacher[s'] retirement funds, defendants seek to clarify
(1) for what purpose the funds will be used by the plaintiff and Ms. Reynante; (2) whether the funds will be
turned-over to the plaintiff and Ms. Reynante without them having to put up a bond as a security for the
protection of the teachers; and (3) whether defendants will be held liable civilly and criminally, in case of
unlawful use and disbursement of the funds.
Teachers' retirement funds are funds principally set aside for the purpose of the retirement of the teachers.
As such, these funds cannot be used for any other purpose other than that for which it is intended. Thus,
neither the plaintiff nor Ms. Reynante may use this amount for the operation of the school. They should hold
the same in trust for the beneficiaries of the same.
As to whether the plaintiff and Ms. Reynante shall be required to put up a bond as a security for the
protection of the teachers before they receive the teachers' retirement funds, the same is not only correct but
also proper. Considering that they will hold these funds in trust for the retiring teachers, they should be
required to file a bond to guarantee their obligations as trustees of these funds. Accordingly, the plaintiff and
Ms. Herminia Reynante are hereby directed to file a bond in the amount of ₱300,000.00 each.
As to whether the defendants will be held liable, civilly and criminally, in case of unlawful use and
disbursement of the teachers' retirement funds, the answer is in the negative. A person cannot be held liable
for his action when such was done in compliance with the lawful order of the court. Besides, considering
that the plaintiff and Ms. Reynante are required to file a bond, the bond shall guarantee for whatever damage
the retiring teachers may incur by reason of the unlawful use and disbursement of the funds.
WHEREFORE, in view of the foregoing, the defendants are hereby ordered to comply with the mandate
contained in the order dated March 24 and August 5, 2003.
514
Defendants are further directed to inform the court of the total amount of the funds deposited reserved for
teachers' retirement, and in what bank and under what account the same is deposited.
SO ORDERED.59
On October 10, 2003, petitioners filed their Petition for Certiorari before the Court of Appeals to question
the Regional Trial Court's Orders60 dated August 5, 2003, August 21, 2003 and October 8, 2003. Eventually,
this was elevated to this Court and was docketed as G.R. No. 174996.61
Meanwhile, trial commenced for the contempt case. Custodio presented as her lone witness, Joseph
Custodio (Joseph), St. Francis School's finance and property resource development administrator. Petitioners
did not present any witness.62
In its Decision63 dated February 6, 2008, Branch 90, Regional Trial Court, Dasmariñas, Cavite found
petitioners guilty of indirect contempt for failing to comply with the Orders dated October 21, 2002 and
March 24, 2003 and ordered them to jointly and severally pay a fine of ₱30,000.00. 64 It likewise directed
them to account for the amount that they had paid the four (4) teachers who had already resigned:65
WHEREFORE, premises considered, judgment is hereby rendered finding the respondents, namely: Bro.
Bernard Oca, Bro. Dennis Magbanua, Ms. Cirila N. Mojica, Mrs. Josefina Pascual, Al N. Mojica, Atty.
Silvestre Pascual and St. Francis School of General Trias, Cavite, GUILTY of INDIRECT CONTEMPT of
Court against the Regional Trial Court, Branch 21, Imus, Cavite for their failure to comply with the Orders
of the Court dated October 21, 2002 and March 24, 2003, and they are hereby ordered to pay a FINE, jointly
and severally, in the amount of Php30,000.00 for the restoration of the dignity of the Court and to comply
with the Orders of the Court dated October 21, 2002 and March 24, 2003 within fifteen (15) days from
receipt of this judgment.
....
SO ORDERED.66
In its May 25, 2011 Decision, the Court of Appeals affirmed the trial court Decision.67 It found that it was
sufficiently established that petitioners did not remit all the money they had previously collected despite the
trial court's October 21, 2002 Order, which they admitted to be lawful. 68
It found that the March 24, 2003 Order merely reiterated the October 21, 2002 Order directing the payment
of all money they had collected and specified the amounts to be remitted. 69 It noted that the trial court
already clarified which funds to turn over but petitioners still refused to obey the orders. 70
The Court of Appeals ruled that defying the trial court orders amounted to contumacious conduct, which
"tended to prejudice St. Francis School's operations due to lack of operational funds." 71
The Court of Appeals also noted that petitioners did not deny that the Motion for Clarification dated October
14, 2002 was heard on October 18, 2002; thus, contradicting their claim that they were not afforded an
opportunity to be heard.72
The Court of Appeals denied reconsideration in its Resolution dated December 19, 2011. 73
Petitioners filed a Petition for Review via Rule 45 arguing that they complied with the October 21, 2002
Order in good faith and that the validity of the March 24, 2003 and August 5, 2003 Orders were being
assailed in a separate case with this Court.74 Likewise, they contended that there was reasonable doubt on
their guilt and that the Court of Appeals erred in failing to dismiss the petition with respect to petitioners
Alejandro and Atty. Silvestre Pascual (Atty. Silvestre) who were not parties in SEC Case No. 024-02 where
the assailed orders were issued.75
Petitioners held that to be cited for contempt, the contemnor must be guilty of willful
disobedience.76 However, they did not disobey the trial court orders. 77 They insisted that they had complied
in good faith because the trial court October 21, 2002 Order only pertained to the school's matriculation fees
and not any other fees.78 They claimed that the October 21, 2002 Order was a response to Custodio's Motion
for Clarification dated October 14, 2002, which only requested that the matriculation fees be turned over to
Reynante.79 Thus, they averred that it was reasonable for them to conclude that the subject of the turnover
was the matriculation fees only.80
Petitioners further claimed that in Custodio 's Comment to their February 19, 2003 Explanation,
Manifestation and Compliance, Custodio surreptitiously included a prayer for the turnover of other
funds.81 They attested that Custodio's Comment became a litigated motion that should have been set for
hearing by the trial court.82 However, the trial court did not set a hearing or require the filing of a responsive
pleading.83 They insisted that they were denied due process because the trial court's March 24, 2003 Order
expanded the scope of its October 21, 2002 Order and required the turnover of additional sums which were
not included in the October 21, 2002 Order.84
Petitioners insisted that the lack of due process and the expansion of the scope of the October 21, 2002
Order rendered the trial court March 24, 2003 and August 5, 2003 Orders unlawful. 85 They questioned these
orders in GR. No. 17 4996 and insisted that their resort to legal remedies showed that they acted in good
faith. They argued that to be charged with indirect contempt, the violated order must have been a lawful
order.86 Since the validity of the trial court orders was being questioned in GR. No. 174996, the Court of
Appeals' ruling was premature as it should have waited for this Court's finding on the orders' validity before
charging them with indirect contempt.87
Petitioners asserted that these circumstances showed that there was reasonable doubt on their guilt and their
acquittal was warranted.88
Lastly, they held that Alejandro and Atty. Silvestre ought to be dropped as parties in the petition for indirect
contempt as they were not parties in the intra-corporate controversy filed with the trial court and were not
subject to its jurisdiction. Alejandro and Atty. Silvestre could not have been aware of the trial court's orders.
They averred that there was no showing that they acted in conspiracy with the other petitioners and that their
guilt could not be assumed or based on mere inference.89
In its March 5, 2012 Resolution, this Court denied the Petition on the ground that the issues raised were
factual in nature and petitioners failed to raise any reversible error on the part of the Court of Appeals. 90
Petitioners filed a Motion for Reconsideration.91
515
In its February 18, 2013 Resolution, this Court set aside its March 5, 2012 Resolution and ordered Custodio
to file a Comment.92
Custodio filed her Comment93 arguing that there was clear and contumacious defiance of the trial court
orders and that the guilt of petitioners was established beyond reasonable doubt. 94
Custodio posited that petitioners only remitted the matriculation fees in the amount of ₱397,127.64. They
did not render a report on the amount or turned over any other amounts. They only partially complied with
the trial court orders.95
Custodio pointed out that petitioners paid the salaries of four (4) teachers who had already resigned despite
the trial court order that only Custodio and Reynante were authorized to settle St. Francis School's
accountabilities.96
Custodio argued that petitioners did not refute the evidence she presented but merely attested that the orders
only pertained to matriculation fees.97
Custodio ave1Ted that petitioners were afforded due process. She pointed out that her Motion for
Clarification dated October 14, 2002 was set for hearing on October 18, 2002, which was attended by
petitioners' counsel.98
Custodio claimed that petitioners' Explanation, Manifestation and Compliance dated February 19, 2003 was
heard by the trial court. Thus, petitioners were not denied due process when she filed her Comment. If
petitioners wanted to assail the Comment, they could have easily filed a Reply. 99
Custodio insisted that the trial court March 24, 2003 Order was a clarification, not an expanded version, of
its October 21, 2002 Order. Custodio reasoned that the March 24, 2003 Order was not even among the
orders they questioned in G.R. No. 174996; thus, showing that they were not acting in good faith. She
insisted that their claim of lack of due process was merely an afterthought after they were directed several
times to comply with the trial court orders.100
Similarly, Custodio claimed that the August 5, 2003 Order of the Regional Trial Court was not a violation of
petitioners' right to due process. It was issued in connection with their motion to set aside the March 24,
2003 Order, which was heard. Moreover, the August 5, 2003 Order was a mere reiteration of the March 24,
2003 Order.101
Custodio held that the trial court orders are deemed valid and are entitled to respect while they are not yet
reversed by a higher court.102
Custodio averred that despite the trial court's rulings on the issues raised, petitioners insisted on filing
prohibited pleadings under A.M. No. 01- 2-04-SC, or the Interim Rules of Procedure for Intra-Corporate
Controversies. These pleadings by petitioners were their (i) Motion for Reconsideration dated November 8,
2002, (ii) Explanation, Manifestation, and Compliance dated February 19, 2003, (iii) Manifestation,
Observation, Compliance, Exception and Motion dated April 18, 2003, and (iv) Motion for Clarification
dated September 1, 2003.103
Custodio posited that in filing these pleadings, petitioners abused court processes as they served no purpose
other than to avoid compliance with the trial court orders. 104
She claimed that Alejandro and Atty. Silvestre were equally guilty of indirect contempt. Despite the fact that
they were not parties to the complaint, Alejandro collected the matriculation fees for the school while Atty.
Silvestre, as a member of the Board of Trustees, was empowered to cause compliance of court orders. 105
Lastly, Custodio pointed out that petitioners' raising of factual issues was not proper in a Petition for Review
on Certiorari.106
Petitioners filed their Reply.107
Later, the parties filed their respective Memoranda.108
Meanwhile, on December 3, 2014, during the pendency of this indirect contempt case, this Court issued a
Decision in G.R. No. 174996, which found that the assailed Orders dated August 5, 2003 and October 8,
2003 of the Regional Trial Court were valid. The dispositive portion of the December 3, 2014 Decision read:
WHEREFORE, premises considered, the petition is PARTLY GRANTED. The assailed Decision dated
September 16, 2005 and the Resolution dated October 9, 2006 of the Court of Appeals in CA-G.R. SP No.
79791 are hereby AFFIRMED in part insofar as they upheld the assailed August 5, 2003 and October 8,
2003 Orders of the trial court. They are REVERSED with respect to the assailed August 21, 2003 Status
Quo Order which is hereby SET ASIDE for having been issued with grave abuse of discretion. The trial
court is further DIRECTED to resolve respondent's application for injunctive relief with dispatch.
109
SO ORDERED.
For resolution is whether petitioners are guilty of indirect contempt.
To resolve this, it is important to determine:
First, whether petitioners are guilty of willful disobedience;
Second, whether petitioners can refuse to follow the orders of the Regional Trial Court on the premise that
their legality is being questioned in this Court; and
Finally, whether Alejandro N. Mojica and Atty. Silvestre Pascual are equally guilty of indirect contempt
despite the fact that they are not parties to the complaint.
I
This Court rules that petitioners Oca, Magbanua, Cirila, and Josefina are guilty of indirect contempt. There
is a contumacious refusal on their part to comply with the Regional Trial Court Orders.
516
Contempt of court is willful disobedience to the court and disregard or defiance of its authority, justice, and
dignity.110It constitutes conduct which "tends to bring the authority of the court and the administration of
law into disrepute or in some manner to impede the due administration of justice" or "interfere with or
prejudice parties['] litigant or their witnesses during litigation."111
All courts are given the inherent power to punish contempt. 112 This power is an essential necessity to
preserve order in judicial proceedings and to enforce the due administration of justice and the court's
mandates, orders, and judgments.113 It safeguards the respect due to the courts and, consequently, ensures
the stability of the judicial institution.114
In Sison v. Caoibes, Jr.:115
Thus, the power to declare a person in contempt of court and in dealing with him accordingly is an inherent
power lodged in courts of justice, to be used as a means to protect and preserve the dignity of the court, the
solemnity of the proceedings therein, and the administration of justice from callous misbehavior, offensive
personalities, and contumacious refusal to comply with court orders. Indeed, the power of contempt is power
assumed by a court or judge to coerce cooperation and punish disobedience, disrespect or interference with
the court's orderly process by exacting summary punishment. The contempt power was given to the courts in
trust for the public, by tradition and necessity, in as much as respect for the courts, which are ordained to
administer the laws which are necessary to the good order of society, is as necessary as respect for the laws
themselves.116(Citations omitted)
There are two (2) types of contempt of court: (i) direct contempt and (ii) indirect contempt.
Direct contempt consists of "misbehavior in the presence of or so near a court as to obstruct or interrupt the
proceedings before [it]."117 It includes: (i) disrespect to the court, (ii) offensive behavior against others, (iii)
refusal, despite being lawfully required, to be sworn in or to answer as a witness, or to subscribe an affidavit
or deposition. It can be punished summarily without a hearing. 118
Indirect contempt is committed through any of the acts enumerated under Rule 71, Section 3 of the Rules of
Court:
(a) Misbehavior of an officer of a court in the performance of his [or her] official duties or in his [or her]
official transactions;
(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court, including the act
of a person who, after being dispossessed or ejected from any real property by the judgment or process of
any court of competent jurisdiction, enters or attempts or induces another to enter into or upon such real
property, for the purpose of executing acts of ownership or possession, or in any manner disturbs the
possession given to the person adjudged to be entitled thereto;
(c) Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting
direct contempt under Section 1 of this Rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration
of justice;
(e) Assuming to be an attorney or an officer of a court, and acting as such without authority;
(f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an order
or process of a court held by him [or her]. 119 (Emphasis supplied)
Indirect contempt is only punished after a written petition is filed and an opportunity to be heard is given to
the party charged.120
In the case at bar, petitioners were charged with indirect contempt through "disobedience of or resistance to
a lawful writ, process, order, orjudgment of a court."
II
Petitioners insist that they have complied with the October 21, 2002 Order in good faith as they have already
turned over the matriculation fees to Reynante.121 They claim that this Order pertained to the matriculation
fees only, excluding any other fees, as it was issued in connection with Custodio's Motion for Clarification
dated October 14, 2002, which requested that the matriculation fees be turned over to
Reynante.122 Custodio's Motion for Clarification dated October 14, 2002 allegedly did not cover other
fees.123
However, the October 21, 2002 Order did not pertain to matriculation fees only:
Regarding the collection of matriculation fees and other collectibles, Ms. Herminia Reynante is hereby
designated by the Court to act as cashier of the school to the exclusion of others with authority to collect all
fees and, together with plaintiff Laurita Custodio, to pay all accounts. Said authority shall continue until the
matter of the application for temporary restraining order and preliminary injunction is heard and resolved.
This is hereby ordered so that an orderly operation of the school will be achieved.
Plaintiff and defendants, as well as Mr. Al Mojica, are directed to turn-over to Ms. Herminia Reynante all
money previously collected and to submit a report on what have been collected, how much, from whom and
the dates collected. Effective October 22, 2002, Ms. Herminia Reynante shall submit to the Court, to the
plaintiff and to all the defendants a monthly report of all receivables collected and all disbursements made.
SO ORDERED.124 (Emphasis supplied)
The wording of the October 21, 2002 Order is clear that the amounts do not pertain only to the matriculation
fees but to all collectibles, all fees, and all accounts. It also states that petitioners were to render a report and
turn over all the amounts they had previously collected. It does not state that only matriculation fees were to
be handed over.
Likewise, the subject of Custodio's Motion for Clarification dated October 14, 2002 did not solely cover
matriculation fees. Her prayer sought to clarify "where the matriculation fees and other fees should be paid
pending the hearing of the Complaint and the Manifestation and Motion." 125 She also prayed for other just
and equitable reliefs.126 Thus, the trial court ordered that all amounts be turned over to Reynante for the
517
orderly operation of the school.127Understandably, the school would operate better if all accounts were
handled by one (1) person and not divided into two (2) arguing factions.
Petitioners insist that Custodio's Comment to their February 19, 2003 Explanation, Manifestation and
Compliance surreptitiously included a prayer for the turnover of other funds, making it a litigated
motion.128 Petitioners claim that they were denied due process because the trial court did not set it for
hearing.129 Moreover, in its March 24, 2003 Order, the trial court allegedly required the turnover of
additional sums which were not included in the October 21, 2002 Order. 130
This Court finds that the subsequent trial court orders did not unduly expand the scope of the October 21,
2002 Order as petitioners argue. The October 21, 2002 Order itself already directed that all fees be turned
over to Reynante.
Furthermore, Custodio's Comment dated February 26, 2003 simply argued that petitioners did not comply
with the October 21, 2002 Order because they did not remit the following amounts:
1) ₱4,339,601.54 deposited in Special Savings Deposit No. 239 of the Rural Bank of General Trias, Inc.;
2) ₱5,639,856.ll deposited in Special Savings Deposit No. 459 of the Rural Bank of General Trias, Inc.;
3) ₱92,970.00 representing fees paid by the school canteen; and
4) All other fees collected from January 2003 to February 19, 2003. 131
Custodio pointed out that petitioners paid the salaries of four (4) other employees who had already resigned,
violating the court order that only Reynante and Custodio were authorized to pay the outstanding accounts
of St. Francis School.132
Thus, it cannot be said that Custodio inserted a surreptitious prayer for the turnover of funds not included in
the October 21, 2002 Order. She simply stated that petitioners failed to substantially comply with the
October 21, 2002 Order and specified the other amounts that petitioners needed to turn over. 133 When she
prayed for the turnover of the other amounts, she merely sought petitioners' compliance of the trial court
October 21, 2002 Order.134
The trial court reiterated this in its March 24, 2003 Order and specified more particularly the amounts that
needed to be remitted. It stated:
A perusal of the allegations of defendants' pleading shows that they merely turned-over a manager's check in
the amount of P397,127.64 representing money collected from the students from October 2002 to December
2002. The Order of October 21, 2002 directed plaintiff and defendants, as well as, Mr. Al Mojica to turn-
over to Ms. Herminia Reynante all money previously collected and to submit a report on what have been
collected, how much, from whom and the dates collected.
Defendants and Mr. Al Mojica are hereby directed, within ten days from receipt hereof, to submit a report
and to turn-over to Ms. Herminia Reynante all money collected by them, more particularly:
1. ₱4,339,601.54 deposited in Special Savings Deposit No. 239 (Rural Bank of Gen. Trias, Inc.);
2. ₱5,639,856. l 1 deposited in Special Savings Deposit No. 459 of (Rural Bank of Gen. Trias, Inc.);
3. ₱92,970.00 representing amount paid by the school canteen;
4. Other fees collected from January 2003 to February 19, 2003;
5. Accounting on how and how much defendants are paying Ms. Daisy Romero and three (3) other teachers
who already resigned.
SO ORDERED.135
Consequently, the Regional Trial Court did not unduly expand the scope of the October 21, 2002 Order
when it issued its March 24, 2003 Order.
However, despite its clear wording, petitioners still did not comply with the March 24, 2003 Order. Instead,
they filed a Manifestation, Observation, Compliance, Exception and Motion on April 18, 2003, praying that
the trial court exclude the other amounts, which were allegedly not included in the October 21, 2002
Order.136
The trial court denied petitioners' Manifestation, Observation,Compliance, Exception and Motion in its
August 5, 2003 Order for being a differently worded motion for reconsideration, which is a prohibited
pleading under Section 8 of the Interim Rules of Procedure for Intra-Corporate Controversies (A.M. No. 01-
2-04-SC).137 The trial court noted that petitioners still had not complied with its March 24, 2003 Order and
reiterated that they must submit a report and turn over all the money they had collected. 138
Still, petitioners refused to comply.
On August 21, 2003, the trial court granted Custodio's Manifestation and Motion dated October 9, 2002. It
issued a status quo order allowing Custodio to discharge her functions as school director and curriculum
administrator because it found that petitioners had already established a new school. 139
However, petitioners still did not comply despite this Order. Instead, they filed their September 1, 2003
Motion for Clarification, raising questions on Custodio's use of the turned over money, Custodio's and
Reynante's bonds as guaranty to the money's exclusive use as teachers' retirement fund, and petitioners'
liability in case of Custodio's misuse of this amount.140
This prompted Custodio to petition the trial court to cite petitioners in indirect contempt. 141
The trial court responded to petitioners' Motion for Clarification dated September 1, 2003 and issued its
October 8, 2003 Order, agreeing that the retirement fund would be merely held in trust by Custodio and
Reynante.142 It also directed Custodio and Reynante to file a bond of ₱300,000.00 each. Again, it ordered
petitioners to comply with the mandate in its March 24, 2003 and August 5, 2003 Orders and directed them
518
to inform the court the total amount of the money deposited and reserved for teachers' retirement and its
bank account details.143
Nonetheless, petitioners still did not comply. Instead, they argued in the contempt proceeding that the March
24, 2003 and August 5, 2003 Orders were unlawful and were being questioned in G.R. No. 174996. They
claimed that their availment of legal remedies showed their good faith. 144
All these acts show petitioners' contumacious refusal to abide by the orders of the trial court.
Again, the trial court did not exclude any other kind of money in its October 21, 2002, March 24, 2003, and
August 5, 2003 Orders, all of which directed petitioners to turn over all monies.145 Petitioners, however, still
insisted that they had complied because they had remitted the matriculation fees. Even after clarification,
petitioners were defiant.
The trial court also noted that even after petitioners had already established another competitor school and
Custodio and Reynante had already posted bond, petitioners still refused to comply. 146
The trial court reiterated the orders to turn over the amounts at least thrice. Petitioners' filing of numerous
pleadings reveals their contumacious refusal to comply and their abuse of court processes.
Their defense that they were denied due process deserves little consideration. Petitioners had attended
hearings and had filed several pleadings showing that they were given several opportunities to present their
position on the matter. All these were considered before the trial court rendered its orders.
In Oca vs. Custodio,147 this Court ruled on the validity of the trial court August 5, 2003 and October 8, 2003
Orders:
With regard to the right to due process, we have emphasized in jurisprudence that while it is true that the
right to due process safeguards the opportunity to be heard and to submit any evidence one may have in
support of his claim or defense, the Court has time and again held that where the opportunity to be heard,
either through verbal arguments or pleadings, is accorded, and the party can "present its side" or defend its
"interest in due course," there is no denial of due process because what the law proscribes is the lack of
opportunity to be heard.
In the case at bar, we find that petitioners were not denied due process by the trial court when it issued the
assailed Orders dated August 5, 2003, August 21, 2003 and October 8, 2003. The records would show that
petitioners were given the opportunity to ventilate their arguments through pleadings and that the same
pleadings were acknowledged in the text of the questioned rulings. Thus, petitioners cannot claim grave
abuse of discretion on the part of the trial court on the basis of denial of dueprocess.148(Citation omitted)
Thus, the question of whether petitioners were denied due process has already been settled.
This Court notes that petitioners' justification for refusing to turn over the stated amounts was that the
amounts constituted teachers' retirement fund, which consequently did not belong to St. Francis School and
was not covered by the assailed Orders.149 However, the trial court lent credence to Joseph's testimony that
the amounts deposited in the Special Savings Accounts were funds for the operations of the school. 150
In any case, whether the amounts are for the teachers' retirement fund or the school's operation fund, the trial
court had determined who was to have custody over these amounts during the pendency of the intra-
corporate case. Thus, it is not for petitioners to choose which amounts to turn over.
III
The same principle applies to petitioners' argument that the trial court orders were being questioned in G.R.
No. 174996.
In intra-corporate controversies, all orders of the trial court are immediately executory:151
Section 4. Executory nature of decisions and orders. - All decisions and orders issued under these Rules
shall immediately be executory except the awards for moral damages, exemplary damages and attorney's
fees, if any. No appeal or petition taken therefrom shall stay the enforcement or implementation of the
decision or order, unless restrained by an appellate court. Interlocutory orders shall not be subject to appeal.
Questioning the trial court orders does not stay its enforcement or implementation. There is no showing that
the trial court orders were restrained by the appellate court.
Hence, petitioners could not refuse to comply with the trial court orders just because they opined that they
were invalid. It is not for the parties to decide whether they should or should not comply with a court order.
Petitioners did not obtain any injunction to stop the implementation of the trial court orders nor was there an
injunction to prevent the trial court from hearing and ruling on the contempt case. 152 Petitioners' stubborn
refusal cannot be excused just because they were convinced of its invalidity. Their resort to the processes of
questioning the orders does not show that they are in good faith.
Petitioners likewise cannot invoke the principle of judicial courtesy.
Judicial courtesy is exercised by suspending a lower court's proceedings although there is no injunction or
an order from a higher court.153 The purpose is to avoid mooting the matter raised in the higher court. 154 It is
exercised as a matter of respect and for practical considerations.155
However, this principle applies only if the continuation of the lower court's proceedings will render moot the
issue raised in the higher court.156
In the two (2) cases involved, there are two (2) separate issues. In G.R. No. 174996, the issue was whether
the orders of the trial court were valid. In this indirect contempt case, the issue is whether petitioners
willfully disobeyed the orders of the trial court. Although this Court may find the orders invalid in G.R. No.
174996, the petitioners may still be cited in contempt for their contumacious refusal and defiance of the trial
court orders. Therefore, the finding of indirect contempt will not render moot this Court's ruling in G.R. No.
174996.
This Court has acknowledged the trial court's power to cite parties in indirect contempt for their refusal to
follow its orders, although the validity of the orders is being questioned in another proceeding.
519
In Roxas v. Tipon,157 this Court found a party guilty of contempt although the disobeyed order was the
subject of a pending petition before the Court of Appeals:
The issue of indirect contempt needs further discussion because while the Order of the RTC to allow audit
of books of HEVRI has been rendered moot, it does not change the fact that at the time that the Order was a
standing pronouncement, petitioners refused to heed it ...
....
Contempt of court is defined as a disobedience to the Court by acting in opposition to its authority, justice
and dignity. It signifies not only a willful disregard or disobedience of the court's orders, but such conduct
which tends to bring the authority of the court and the administration of law into disrepute or in some
manner to impede the due administration of justice. Contempt of court is a defiance of the authority, justice
or dignity of the court; such conduct as tends to bring the authority and administration of the law into
disrespect or to interfere with or prejudice parties-litigant or their witnesses during litigation. The
asseverations made by petitioners to justify their refusal to allow inspection or audit were rejected by the
trial court.
....
The RTC initiated the contempt charge. In the Order dated 9 January 2002, petitioners were directed to
appear in court and to show cause why they should not be held in contempt of court for their refusal to allow
Financial Catalyst, Inc. to audit the books of HEVRI. Petitioners filed an urgent motion for reconsideration
claiming that said order was the subject of a pending petition before the Court of Appeals and that they can
only be cited for contempt by the filing of a verified petition. The RTC denied the motion and reiterated in its
Order on 26 April 2002 explaining that it chose to initiate the contempt charge.
The RTC acted on the basis of the unjustified refusal of petitioners to abide by its lawful order. It is of no
moment that private respondents may have filed several pleadings to urge the R TC to cite petitioners in
contempt. Petitioners utterly violated an order issued by the trial court which act is considered
contemptuous. Thus, in Leonidas v. Judge Supnet, the MTC's order to the bank to show cause why it should
not be held in contempt, was adjudged as a legitimate exercise of the MTC's judicial discretion to determine
whether the bank should be sanctioned for disregarding its previous orders. 158 (Emphasis supplied, citations
omitted)
In this case, petitioners were given several opportunities to comply with the trial court orders. Even after the
trial court clarified which funds to turn over, they still refused to obey. While petitioners questioned the
legality of these orders, they are immediately executory. Moreover, the parties do not have the power to
determine for themselves what should and should not be excluded from the orders. Their failure to turn over
the amounts showed petitioners' defiance and disregard for the authority of the trial court.
Petitioners argue that contempt proceedings are similar to criminal proceedings, and thus, there must be
proof beyond reasonable doubt of their guilt. 159
The punishment for contempt is classified into two (2): civil contempt and criminal contempt.
Civil contempt is committed when a party fails to comply with an order of a court or judge "for the benefit
of the other party."160 A criminal contempt is committed when a party acts against the court's authority and
dignity or commits a forbidden act tending to disrespect the court or judge. 161
This stems from the two (2)-fold aspect of contempt which seeks: (i) to punish the party for disrespecting
the court or its orders; and (ii) to compel the party to do an act or duty which it refuses to perform. 162
In Halili v. Court of Industrial Relations:163
Due to this twofold aspect of the exercise of the power to punish them, contempts are classified as civil or
criminal. A civil contempt is the failure to do something ordered to be done by a court or a judge for the
benefit of the opposing party therein; and a criminal contempt, is conduct directed against the authority and
dignity of a court or of a judge, as in unlawfully assailing or discrediting the authority or dignity of the court
or judge, or in doing a duly forbidden act. Where the punishment imposed, whether against a party to a suit
or a stranger, is wholly or primarily to protect or vindicate the dignity and power of the court, either by fine
payable to the government or by imprisonment, or both, it is deemed a judgment in a criminal case. Where
the punishment is by fine directed to be paid to a party in the nature of damages for the wrong inflicted, or
by imprisonment as a coercive measure to enforce the performance of some act for the benefit of the party or
in aid of the final judgment or decree rendered in his behalf, the contempt judgment will, if made before
final decree, be treated as in the nature of an interlocutory order, or, if made after final decree, as remedial in
nature, and may be reviewed only on appeal from the final decree, or in such other mode as is appropriate to
the review of judgments in civil cases. . . . The question of whether the contempt committed is civil or
criminal, does not affect the jurisdiction or the power of a Court to punish the same .... 164 (Emphasis
supplied)
The difference between civil contempt and criminal contempt was further elaborated in People v. Godoy:165
It has been said that the real character of the proceedings is to be determined by the relief sought, or the
dominant purpose, and the proceedings are to be regarded as criminal when the purpose is primarily
punishment, and civil when the purpose is primarily compensatory or remedial.
Criminal contempt proceedings are generally held to be in the nature of criminal or quasi-criminal actions.
They are punitive in nature, and the Government, the courts, and the people are interested in their
prosecution. Their purpose is to preserve the power and vindicate the authority and dignity of the court, and
to punish for disobedience of its orders. Strictly speaking, however, they are not criminal proceedings or
prosecutions, even though the contemptuous act involved is also a crime. The proceeding has been
characterized as sui generis, partaking of some of the elements of both a civil and criminal proceeding, but
really constituting neither. In general, criminal contempt proceedings should be conducted in accordance
with the principles and rules applicable to criminal cases, in so far as such procedure is consistent with the
summary nature of contempt proceedings. So it has been held that the strict rules that govern criminal
prosecutions apply to a prosecution for criminal contempt, that the accused is to be afforded many of the
protections provided in regular criminal cases, and that proceedings under statutes governing them are to be
strictly construed. However, criminal proceedings are not required to take any particular form so long as the
substantial rights of the accused are preserved.
Civil contempt proceedings are generally held to be remedial and civil in their nature; that is, they are
proceedings for the enforcement of some duty, and essentially a remedy for coercing a person to do the
520
thing required. As otherwise expressed, a proceeding for civil contempt is one instituted to preserve and
enforce the rights of a private party to an action and to compel obedience to a judgment or decree intended
to benefit such a party litigant. So a proceeding is one for civil contempt, regardless of its form, if the act
charged is wholly the disobedience, by one party to a suit, of a special order made in behalf of the other
party and the disobeyed order may still be obeyed, and the purpose of the punishment is to aid in an
enforcement of obedience. The rules of procedure governing criminal contempt proceedings, or criminal
prosecutions, ordinarily are inapplicable to civil contempt proceedings ...
In general, civil contempt proceedings should be instituted by an aggrieved party, or his successor, or
someone who has a pecuniary interest in the right to be protected. In criminal contempt proceedings, it is
generally held that the State is the real prosecutor.
Contempt is not presumed. In proceedings for criminal contempt, the defendant is presumed innocent and
the burden is on the prosecution to prove the charges beyond reasonable doubt. In proceedings for civil
contempt, there is no presumption, although the burden of proof is on the complainant, and while the proof
need not be beyond reasonable doubt, it must amount to more than a mere preponderance of evidence. It
has been said that the burden of proof in a civil contempt proceeding lies somewhere between the criminal
"reasonable doubt" burden and the civil "fair preponderance" burden.166 (Citations omitted)
Civil contempt proceedings seek to compel the contemnor to obey acourt order, judgment, or decree which
he or she refuses to do for the benefit of another party. It is for the enforcement and the preservation of a
right of a private party, who is the real party in interest in the proceedings. The purpose of the contemnor's
punishment is to compel obedience to the order. Thus, civil contempt is not treated like a criminal
proceeding and proof beyond reasonable doubt is not necessary to prove it. 167
In the case at bar, the dispositive portion of the Decision of the trial court, as affirmed by the Court of
Appeals, read:
WHEREFORE, premises considered, judgment is hereby rendered finding the respondents, namely: Bro.
Bernard Oca, Bro. Dennis Magbanua, Ms. Cirila N. Mojica, Mrs. Josefina Pascual, Al N. Mojica, Atty.
Silvestre Pascual and St. Francis School of General Trias, Cavite, GUILTY of INDIRECT CONTEMPT of
Court against the Regional Trial Court, Branch 21, Imus, Cavite for their failure to comply with the Orders
of the Court dated October 21, 2002 and March 24, 2003, and they are hereby ordered to pay a FINE, jointly
and severally, in the amount of Php30,000.00 for the restoration of the dignity of the Court and to comply
with the Orders of the Court dated October 21, 2002 and March 24, 2003 within fifteen (15) days from
receipt of this judgment.
....
SO ORDERED.168
While the nature of the punishment imposed is a mixture of both criminal and civil, the contempt proceeding
in this case is more civil than criminal.
The purpose of the filing and the nature of the contempt proceeding show that Custodio was seeking
enforcement of the trial court orders in the intra-corporate controversy because petitioners refused to
comply. Hence, this is a civil contempt case, which does not need proof beyond reasonable doubt.
This Court has ruled that while the power to cite parties in contempt should be used sparingly, it should be
allowed to exercise its power of contempt to maintain the respect due to it and to ensure the infallibility of
justice where the defiance is so clear and contumacious and there is an evident refusal to obey.169
This Court finds that it was sufficiently proven that there was willful disobedience on the part of petitioners.
Therefore, petitioners ought to be cited in contempt.
IV
However, this Court rues that the charges against Alejandro and Atty. Silvestre ought to be dismissed.
While they were not parties to SEC Case No. 024-02, the trial court ruled that they were guilty of indirect
contempt on the following premise:
Alejandro merely collected the matriculation fees as a designated cashier who worked in the Rural Bank of
General Trias, Inc. He neither exercised power over the money nor had the authority to order how it would
be kept or disposed. Moreover, it has been established that the matriculation fees had already been turned
over to Reynante.
Atty. Silvestre was indeed a member of the Board of Trustees. However, decisions of the Board of Trustees
are not subject to the control of just one (1) person. While a board member may protest, the majority of the
board may overrule him or her. Thus, it is not correct to say that a board member is empowered to cause
compliance of the trial court orders. It does not matter if Atty. Silvestre was unable to prove his intention to
comply with the orders. The burden of proving contempt is upon complainants and there is no presumption
of guilt in contempt proceedings such that the party accused of contempt must prove that he is innocent. 174
In the absence of proof of conspiracy, it cannot be said that Alejandro and Atty. Silvestre are guilty of
contempt.
WHEREFORE, the Petition is DENIED. The May 25, 2011 Decision175 and December 19, 2011
Resolution176 of the Court of Appeals in CA-G.R. CR. No. 31985 are AFFIRMED. However, the complaint
against Alejandro Mojica and Atty. Silvestre Pascual is hereby DISMISSED.

The latter Orders are directed to "ALL" the defendants in SEC Case No. 024-02, namely: Bro. Bernard Oca,
SO ORDERED.
Bro. Dennis Magbanua, Ms. Cirila N. Mojica, Mrs. Josefina Pascual and St. Francis School; while the
respondent Al N. Mojica was particularly mentioned in the said orders in view of the fact that it was he that
collected matriculation fees, as a cashier. With respect to Atty. Silvestre Pascual, the latter was impleaded in
this case because he was a member of the Board of St. Francis School at the time the petition was filed, and
he is empowered to cause compliance with these Orders. His failure to prove that he has the intention to
comply with the subject orders showed his acquiescence to the collective act of defiance. 170

In Ferrer v. Rodriguez,171 this Court ruled that a non-litigant may be cited in contempt if he or she acted in
conspiracy with the parties in violating the court order:

Nevertheless, persons who are not parties in a proceeding may be declared guilty of contempt for willful
violation of an order issued in the case if said persons are guilty of conspiracy with any of the parties in
violating the court's order.

"In a proceeding to punish for criminal contempt for willful disobedience of an injunction, the fact that those
disobeying the injunction were not parties eo nomine to the action in which it was granted, and were not
personally served, is no defense, where the injunction restrains not only the parties, but those who act in
connection with the party as attorneys, agents, or employees, and the parties accused, with knowledge of the
order and its terms, acting as the employees of a party, willfully violate it." (People ex rel. Stearns, et
al. vs. Marr, et al., 74 N.E. 431.)172

However, there is no evidence of conspiracy in this case. The powerto punish contempt must be "exercised
cautiously, sparingly, and judiciously."173 Without evidence of conspiracy, it cannot be said that the non-
litigants are guilty of contempt.

This Court finds that there is no sufficient evidence of conspiracy to hold both Alejandro and Atty. Silvestre
liable for contempt.

521
 FIRST DIVISION
G.R. Nos. 208828-29 August 13, 2014
RICARDO C. SILVERIO, SR., Petitioner,
vs.
RICARDO S. SILVERIO, JR., CITRINE HOLDINGS, INC., MONICA P. OCAMPO and ZEE2
RESOURCES, INC.,Respondents.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure, as amended, to
reverse and set aside the Decision1 dated March 8, 2013 of the Court of Appeals (CA) insofar as CA-G.R.
SP Nos. 121173 and 122024 are concerned, and Resolution 2 dated July 4, 2013 denying petitioner's Motion
for Partial Reconsideration. The CA nullified the preliminary injunction issued by the Regional Trial Court
(RTC) of Makati City ("intestate court"), Branch 57 in Sp. Proc. No. M-2629 and reversed said court's Order
dated August 18, 2011 declaring the sales and derivative titles over two properties subject of intestate
proceedings as null and void.
The factual and procedural antecedents of the case, as summarized by the CA, are as follows: The late
Beatriz S. Silverio died without leaving a will on October 7, 1987. She was survived by her legal heirs,
namely: Ricardo C. Silverio, Sr. (husband), Edmundo S. Silverio (son), Edgardo S. Silverio (son), Ricardo
S. Silverio, Jr. (son), Nelia S.Silverio-Dee (daughter), and Ligaya S. Silverio (daughter). Subsequently, an
intestate proceeding (SP PROC. NO. M-2629) for the settlement of her estate was filed by SILVERIO, SR.
In the course of the proceedings, the parties filed different petitions and appeal challenging several orders
ofthe intestate court that went all the way up to the Supreme Court. To better understand the myriad of
factual and procedural antecedents leading to the instant consolidated case, this court will resolve the
petitions in seriatim.
The Petitions
CA-G.R. SP No. 121172
The first petition of the three consolidated petitions is CA-G.R. SP No. 121172 wherein petitioner,
RICARDO S. SILVERIO JR. ("SILVERIO JR.") assails the Order ofthe intestate court dated 16 June 2011
reinstating RICARDO SILVERIO SR. ("SILVERIO SR.") as administrator to the estate of the late Beatriz
Silverio.
The administrator first appointed by the Court was EDGARDO SILVERIO ("EDGARDO"), but by virtue of
a Joint Manifestation dated 3 November 1999 filed by the heirs of BEATRIZ D. SILVERIO, the motion to
withdraw as administrator filed by EDGARDO was approved by the intestate court and in his stead,
SILVERIO SR. was appointed as the new administrator. Thereafter, an active exchange of pleadings to
522
remove and appoint a new administrator ensued between SILVERIO SR. and SILVERIO JR. The flip-
flopping appointment of administrator is summarized below:
In an Order dated 3 January 2005, SILVERIO SR. was removed as administrator and in his stead,
SILVERIO, JR. was designated as the new administrator. A motion for reconsideration was separately filed
by SILVERIO SR. and Nelia Silverio-Dee ("SILVERIO-DEE") and on 31 May 2005, the intestate court
issued an Omnibus Order affirming among others, the Order of 3 January 2005. Inthe same Order, the
intestate court also granted the motion of SILVERIO JR. to take his oath as administrator effective upon
receipt of the order and expunged the inventory report filed by SILVERIO SR.
On 12 December 2005 the intestate court acting on the motion filed by SILVERIO SR. recalled the Order
granting letters of administration to SILVERIO JR. and reinstated SILVERIO SR. as administrator. Then
again, the intestate court acting on the motion for partial consideration to the Order dated 12 December 2005
filed by SILVERIO JR. issued an Omnibus Order dated 31 October 2006 upholding the grant of Letters of
Administration to SILVERIO JR. and removed SILVERIO SR., ad administrator for gross violation of his
duties and functions under Section 1, Rule 81 of the Rules of Court.
SILVERIO SR. moved for reconsideration of the above Order whereas SILVERIO-DEE on the other hand,
filed a Petition for Certiorari before the Court of Appeals docketed as CA-G.R. SP No. 97196. On 28
August 2008, the Court of Appeals (Seventh Division) rendered a decision reinstating SILVERIO, SR. as
administrator, the decretal portion of the Order reads:
"WHEREFORE, the petition is GRANTED. The portions of the Omnibus Order upholding the grant of
letters of administration to and the taking of an oath of administration by Ricardo Silverio, Jr., as well as the
removal of Ricardo Silverio, Sr. as administrator to the Estate of Beatriz Silverio, are declared NULL and
VOID. The writ of preliminary injunction earlier issued is MADE PERMANENT in regard to the said
portions. Respondent RTC is ORDERED to reinstate Ricardo Silverio, Sr. as administrator to the Estate of
Beatriz Silverio. Costs against the Private Respondents.
SO ORDERED."
SILVERIO JR. filed a Petition for review on Certioraribefore the Supreme Court docketed as G.R. No.
185619 challenging the 28 Augsut 2008 decision of the Court of Appeals. On 11 February 2009, the
Supreme Court issued a resolution denying the petition for failure to sufficiently show any reversible error
inthe assailed judgment to warrant the exercise by the Court of discretionary appellate jurisdiction. Acting
on SILVERIO JR.’s motion for reconsideration, the Supreme Court on 11 February 2011, denied the motion
with finality. An entry of judgment was made on 29 March 2011.
On 25 April 2011 SILVERIO SR. filed before the intestate court, an urgent motion to be reinstated as
administrator of the estate. Acting on the motion, the intestate court issued the now challenged Order dated
16 June 2011, the pertinent portion of the Order reads:
xxxx
"WHEREFORE, upon posting of a bond in the sum of TEN MILLION PESOS, the same to be approved by
this Court, Mr. Ricardo C. Silverio, Sr. is hereby ordered reinstated as the Administrator to the estate of the
late Beatriz Silverio and to immediately take his oath as such, and exercise his duties and functions as are
incumbent under the law upon the said position. xxx."
xxxx
CA-G.R. SP No. 121173
xxxx
On 15 March 2011, heirs SILVERIO JR., EDMUNDO and LIGAYA represented by her legal guardian
moved for the disqualification and/or inhibition of JUDGE GUANLAO, JR. based on the following
grounds: (1) Absence of the written consent of all parties in interest allowing JUDGE GUANLAO, JR. to
continue hearing the case considering that he appeared once as counsel in the intestate proceedings; (2)
JUDGE GUANLAO, JR. has shown bias and partiality in favor of SILVERIO SR. by allowing the latter to
pursue several motions and even issued a TRO in violation of the rules against forum shopping; (3) Heir
LIGAYA’s Petition for Support and Release of Funds for Medical Support has not been resolved; and (4) It
is in the best interest of all the heirs that the proceedings be presided and decided by the cold neutrality of an
impartial judge.
On 23 March 2011, JUDGE GUANLAO, JR. issued an order denying the Motion for Disqualification
and/or Inhibition. The movants filed a motion for reconsideration but the same was denied in an order dated
14 June 2011. Hence, the instant petition.
xxxx
CA-G.R. SP NO. 122024
xxxx
The intestate court in its Omnibus Order dated 31 October 2006, ordered among others, the sale of certain
properties belonging to the estate. The portion of the order which is pertinent to the present petition reads:
"WHEREFORE, above premises considered, this Court for the foregoing reasons resolves to grant the
following:
(1) xxx
(2) xxx
(3) Allowing the sale of the properties located at (1) No. 82 Cambridge Circle, Forbes Park,
Makati City, covered by T.C.T. No. 137155 issued by Register of Deeds of Makati City; (2) No. 3
Intsia Road, Forbes Park, Makati City covered by T.C.T. No. 4137154 issued by the Register of
Deeds of Makati City; and (3) No. 19 Taurus St., Bel-Air Subd. Makati City covered by TCT No.
137156 issued by the Register of Deeds of Makati City to partially settle the intestate estate of the
523
late Beatriz S. Silverio, and authorizing the Administrator to undertake the proper procedure or
transferring the titles involved to the name of the estate; and
(4) To apply the proceeds of the sale mentioned in Number 3 above to the payment of taxes,
interests, penalties and other charges, if any, and todistribute the residue among the heirs Ricardo
C. Silverio, Sr., Ricardo S. Silverio, Jr., Ligaya S. Silverio represented by Legal Guardian Nestor
S. Dela Merced II, Edmundo S. Silverio and Nelia S. SilverioDee in accordance with the law on
intestacy.
SO ORDERED."
By virtue of the aforesaid Order, SILVERIO, JR. on 16 October 2007 executed a Deed of Absolute Salein
favor of CITRINE HOLDINGS, Inc. ("CITRINE") over the property located at No. 3 Intsia Road, Forbes
Park, Makati City. CITRINE became the registered owner thereof on 06 September 2010 as evidenced by
TCT No. 006-201000063.
A Deed of Absolute Sale was likewise executed in favor of Monica P. Ocampo (notarized on September 16,
2010) for the lot located at No. 82 Cambridge Circle, Forbes Park, Makati City. On 23 December 2010, TCT
No. 006-2011000050 was issued toMonica P. Ocampo. The latter subsequently sold said property to ZEE2
Resources, Inc. (ZEE2) and TCT No. 006-2011000190 was issued on 11 February 2011 under its name.
In the interim, or on 12 December 2006 SILVERIO-DEE filed a petition for certioraribefore the Court of
Appeals docketed as CA-G.R. SP No. 97196 with prayer for injunctive relief. As prayed for, the Court of
Appeals issued a Temporary Restraining Order (TRO) on 5 February 2007. On 4 July 2007, the Court
issueda Writ of Preliminary Injunction conditioned upon the posting of the bond in the amount of two
million pesos (Php2,000,000.00). SILVERIO-DEE posted the required bond on February 5, 2007 but in an
order dated 3 January 2008, the Court ruled that the bond posted by SILVERIO-DEE failed to comply with
A.M. No. 04-7-02-SC. The Court, however, did not reverse the ruling granting the injunction but instead
ordered SILVERIO-DEE to comply with A.M. No. 04-7-02-SC. The Court also increased the bond from
two million to ten million. On 29 February 2008, the Court issued a Resolution approving the ten million
bond and issued the Writ of Preliminary Injunction. Eventually, on 28 August 2008 the Court of Appeals
(Seventh Division) issued a decision reinstating SILVERIO SR. as administrator and declaring the Writ of
Preliminary Injunction permanent in regard to the appointment of administrator.
On 04 February 2011 SILVERIO SR. filed an Urgent Application for the Issuance of Temporary
Restraining Order/Preliminary Prohibitory Injunction (With Motion For the Issuance of Subpoena Ad
Testificandum and Subpoena Duces Tecum) praying among others, that a TRO be issued restraining and/or
preventing SILVERIO, JR., MONICA OCAMPO, CITRINE HOLDINGS, INC. and their successors-in-
interest from committing any act that would affect the titles to the three properties.
On 14 February 2011, SILVERIO SR. filed an Urgent Omnibus Motion (a) To Declare as Null and Void the
Deed of Absolute Sale dated 16 September 2010; (b) To cancel the Transfer Certificate of Title No. 006-
2011000050; and (c) To reinstate the Transfer Certificate of Title No. 2236121 in the name of Ricardo C.
SilverioSr. and the Intestate Estate of the late Beatriz S. Silverio.
On 28 February 2011 the Intestate Court issued an Order granting a Temporary Restraining Order enjoining
SILVERIO JR., their agent or anybody acting in their behalf from committing any act that would affect the
titles to the properties and enjoining the Register of Deeds of Makati City from accepting, admitting,
approving, registering, annotating or in any way giving due course to whatever deeds, instruments or any
other documents involving voluntary or involuntary dealings which may have the effect of transferring,
conveying, encumbering, ceding, waiving, alienating, or disposing in favor of any individual or any entity of
the subject properties. Subpoena ad testificandumand duces tecumwas also issued by the intestate court
requiring SILVERIO, JR., MONICA OCAMPO and ALEXANDRA GARCIA of CITRINE to testify and
bring with them any books and documents under their control to shed light on the circumstances
surrounding the transaction involving the properties in question.
On 9 March 2011, SILVERIO Sr. filed a Supplement to the Urgent Omnibus Motion dated 14 February
2011. On 18 August 2011, the intestate court rendered the now assailed Order the decretal portion of the
Order is quoted hereunder:
"WHEREFORE, this Court hereby orders that:
1. The Deed of Absolute Sale dated 16 September 2010 as VOID:
2. The Transfer Certificate of Title No. 006-2011000050 in the name of defendant MONICA
OCAMPO or any of her successors-in-interestincluding all derivative titles, as NULL AND VOID;
3. The Transfer Certificate of Title TCT No. 006-2011000190 in the name of ZEE2 RESOURCES,
INC. or any of its successors-in-interest including all derivative titles, as NULL AND VOID;
4. (T)he Register of Deeds of Makati City to CANCEL Transfer Certificate of Title No. 006-
2011000050, Transfer Certificate of Title No. 006-2011000190 and all of its derivative titles; and
5. Reinstating the Transfer Certificate of Title No. 2236121 in the name of RICARDO C.
SILVERIO, SR. AND THE INTESTATE ESTATE OF THE LATE BEATRIZ SILVERIO, and
AS TO THE INTSIA PROPERTY:
1. The Register of Deeds ofMakati City to CANCEL Transfer Certificate ofTitle No.
006-2010000063, in the name of CITRINE HOLDINGS, INC. and all of its derivative
titles; and
2. The reinstatement of Transfer Certificate of Title No. 223612 in the name of
RICARDO C. SILVERIO, SR. and the INTESTATE ESTATE OF THE LATE
BEATRIZ SILVERIO.
SO ORDERED."
xxxx 3 Intsia properties. In the alternative, should the said sales be upheld, petitioner prays that this Court (1)
The consolidated petitions for certiorari filed by respondent Ricardo S. Silverio, Jr. ("Silverio, Jr.") before
the CA questioned the following issuances of the intestate court: CA-G.R. SP No. 121172 – Order dated
June 16, 2011 reinstating Silverio, Sr. as Administrator; CA-G.R. SP No. 121173 – (1) Order dated March
23,2011 granting Silverio, Sr.’s application for preliminary injunction enjoining Silverio, Jr. or anyone
acting on their behalf from committing any act that would affect the titles to the subject properties and
524
enjoining the Register of Deeds of Makati City from accepting, admitting, approving, registering, annotating
or in any way giving due course to whatever deeds, instruments or any other documents involving the
Cambridge and Intsia properties, (2) Order dated March 23, 2011 which denied Silverio, Jr.’s motion or
disqualification and/or inhibition of Judge Guanlao, Jr., and (3) Order dated June 14, 2011 denying the
motion for reconsideration of the March 23, 2011 Order (granting application for preliminary injunction);
and in CA-G.R. SP No. 122024 – Order dated August 18, 2011 declaring the Deed of Absolute Sale, TCT
and all derivative titles over the Cambridge and Intsiaproperties as null and void.
On March 8, 2013, the CA rendered its Decision, the falloof which reads:
WHEREFORE, based on the foregoing premises, the Court hereby disposes and orders the following:
1. The petition in CA G.R. SP No. 121172is DENIEDfor lack of merit. Accordingly, the 16 June
2011 Order of the Regional Trial Court of Makati City, Branch 57 reinstating MR. RICARDO C.
SILVERIO, SR. as Administrator is AFFIRMED.
2. The petition in CA GR. S.P. No. 121173is partly DENIEDfor lack of merit insofar as it
questions the 23 March 2011 Order denying RICARDO SILVERIO, JR’s Motion for
Disqualification and/or Inhibition of Judge Honorio E. Guanlao, Jr. The petition is partly
GRANTEDin that the Preliminary Injunction issued by the Regional Trial Court of Makati City,
Branch 57 is herebydeclared NULL and VOID for being issued with grave abuse of discretion.
3. The petition in CA G.R.-S.P. No. 122024is GRANTED. Accordingly, the 18 August 2011 Order
declaring the Deed of Absolute Sale, Transfer Certificate of Title and all derivative titles over the
Cambridge and Intsia Property null and void is hereby REVERSEDand SET ASIDE.
SO ORDERED.4
Ricardo C. Silverio, Sr. (petitioner) filed a Motion for Partial Reconsideration 5 "insofar as its ruling in CA-
G.R. SP No. 122024" praying that the August 18, 2011 Order of the intestate court be affirmed. By
Resolution dated July 4, 2013, the CA denied his motion for partial reconsideration.
Hence, this petition contending thatthe CA committed a reversible error in upholding the validity of the
Intsia and Cambridgeproperties upon the ground that the intestate court cannotannul the sales as it has a
limited jurisdiction only and which does not includeresolving issues of ownership. It is asserted that the CA
should nothave stopped there and looked into the nature of the properties sold, which formed part of the
conjugal partnership of Ricardo Silverio, Sr. and Beatriz S. Silverio.
Petitioner seeks the reinstatement of the order of the intestate court annulling the sales of the Cambridge and
declare the sales to be valid only to the extent of 50% net remainder share of the late Beatriz less the
corresponding shares therefrom of petitioner and the other legal compulsory heirs, and (2) order respondent
Silverio, Jr. to account for the proceeds of sales for distribution of the residue among the legal/compulsory
heirs.
In their Comment, respondents Silverio, Jr., Monica Ocampo and Citrine Holdings, Inc. argued that the
intestate court should not have ruled on the validity of the sale of the subject properties to third parties after
it itself had authorized their disposal in partial settlementof the estate, especially so when separate actions
assailing the new titles issued to said third parties were already instituted by petitioner.
As to the issue of alleged lack ofprior consent of petitioner to the aforesaid sales as the surviving spouses
with a 50% conjugal share in the subject properties, respondents point out that such is belied by the October
31, 2006 Order of the intestate court, which clearly showed that counsels of all the heirs were present at the
hearing of June 16, 2006 and no objection was made by them to the sale of the properties and the partial
settlement of the Estate of Beatriz S. Silverio, together with the transfer of titles of these properties in the
name of the Estate as prayed for in petitioner’s Manifestation and Motion dated April 19, 2006. Petitioner
had not challenged or appealed the said order authorizing the sale of the subject properties. Thus, it is too
late in the day for petitioner to raise this factual issue before this Court, not to mention that it cannot be
ventilated in the present appeal by certiorari as thisCourt is not a trier of facts.
Respondent ZEE2 Resources Corporation filed its Comment contending that the intestate court improperly
nullified the titles despite the fact that the present registered owners, who are indispensable parties, were not
impleaded. Indeed, a Torrens title cannot be collaterally attacked and may be cancelled only in a direct
proceeding brought for the purpose. Respondent points out that petitioner himself recognized thata direct
action is required to annul a Torrens title ashe initially instituted two civil complaints before the RTC of
Makati City seeking to annul, among others, the TCT’s issued to respondent Ocampo for the Cambridge
property. After failing to secure restraining orders in these two civil cases, petitioner filed in the intestate
court his Urgent OmnibusMotion dated February 14, 2011 to annul the said titles, including that of ZEE2. In
any case, respondent maintains that it is a buyer of good faith and for value, of which the intestate court
never made a determination nor did the aforesaid Urgent Omnibus Motion and Supplement to the Omnibus
Motion dated March 4, 2011 contain allegations indicating that respondent ZEE2 was not a buyer in good
faith and for value.
According to respondent ZEE2, petitioner’s act of filing a separate complaint with application for a
temporary restraining order (TRO) and preliminary injunction on January 31, 2011 in another court (Civil
Case Nos. 11-084 of the RTC of Makati City, Branch 143) constitutes willful and deliberate forum shopping
asthe former also prayedsimilar primary reliefs and setting up the alleged nullity of the subject deeds of
absolute sale as those raised in the Urgent Omnibus Motion and Supplement to the Urgent Omnibus Motion
filed in the intestate court.
At the outset, we emphasize that the probate court having jurisdiction over properties under administration
has the authority not only to approve any disposition or conveyance, but also to annul an unauthorized sale
by the prospective heirs or administrator. Thus we held in Lee v. Regional Trial Court of Quezon City,
Branch 856:
Juliana Ortañez and Jose Ortañez sold specific properties of the estate, without court approval. It is well-
settled that court approval is necessary for the validity of any disposition of the decedent’s estate. In the
early case of Godoy vs. Orellano, we laid down the rule that the sale of the property of the estate by an
administrator without the order of the probate court is void and passes no title to the purchaser. And in the
case of Dillena vs. Court of Appeals, we ruled that: x x x x
525
It being settled that property under administration needs the approval of the probate court before it can be
disposed of, any unauthorized disposition does not bind the estate and is null and void. Asearly as 1921 in
the case of Godoy vs. Orellano(42 Phil 347), We laid down the rule that a sale by an administrator of
property of the deceased, which is not authorized by the probate court is null and void and title does not pass
to the purchaser.
There is hardly any doubt that the probate court can declare null and void the disposition of the property
under administration, made by private respondent, the same having been effected without authority from
said court. It is the probate court that has the power to authorize and/or approve the sale (Section 4 and 7,
Rule 89), hence, a fortiori, it is said court that can declare it null and void for as long as the proceedings had
not been closed or terminated. To uphold petitioner’s contention that the probate court cannot annul the
unauthorized sale, would render meaningless the power pertaining to the said court. (Bonga vs. Soler, 2
SCRA 755). (italics ours) Our jurisprudence is therefore clear that (1) any disposition of estate property by
an administrator or prospective heir pending final adjudication requires court approval and (2) any
unauthorized disposition of estate property can be annulled by the probate court, there being no need for a
separate action to annul the unauthorized disposition. (Emphasis supplied.)
In this case, the sale of the subject properties was executed by respondent Silverio, Jr. with prior approval of
the intestate court under its Omnibus Order dated October 31, 2006. Subsequently, however, the sale was
annulled by the said court on motion by petitioner.
In reversing the intestate court’s order annulling the sale of the subject properties, the CA noted that said
ruling is anchored on the fact that the deeds of sale were executed at the time when the TRO and writ of
preliminary injunction issued in CA-G.R. SP No. 97196 was still in effect. It then concluded that the
eventual decision in the latter case making the writ of preliminary injunction permanent only with respect to
the appointment of petitioner as administrator and not to the grant of authority to sell mooted the issue of
whether the sale was executed at the time when the TRO and writ of preliminary injunction were in effect.
The CA’s ruling on this issue is hereunder quoted:
The more crucial question that needs to be addressed is: Whether the authority to sell the properties in
question granted under the October 31, 2006 Omnibus Order, was nullified by the decision of the Court of
Appeals in CA-G.R. SP No. 97196. A look at the dispositive portion of the decision in CA-G.R. SP No.
97196 would lead us to reasonably conclude that the grant of authority to sell is still good and valid. The
fallo of the decision reads:
"WHEREFORE, the petition is GRANTED. The portions of the Omnibus Order upholding the grant of
letters of administration to and the taking of an oath of administration by Ricardo Silverio, Jr., as well as the
removal of Ricardo Silverio, Sr. as administrator to the Estate of Beatriz Silverio, are declared NULL and
VOID. The writ of preliminary injunction earlier issued is made permanent in regard to the said portions.
Respondent RTC is ORDERED to reinstate Ricardo Silverio, Sr. as administrator of the Estate of Beatriz
Silverio. Costs against the Private Respondents.
SO ORDERED."
The October 31, 2006 Omnibus Order of the testate [sic] court in so far as it authorizes the saleof the three
properties in question was not declared by the Court of Appeals, Seventh Division as null and void.It is
axiomatic that it is the dispositive portion of the decision that finally invests rights upon the parties, sets
conditions for the exercise of those rights, and imposes the corresponding duties or obligations.
From all the foregoing, We declare that it was grave abuse of discretion on the part of the intestate court
when it ordered the sale of the Cambridge Property and Intsia Property as NULL and VOID citing as
justification the decision of the Court of Appeals, Seventh Division in CAG.R. SP No. 97196. To reiterate,
the injunction order which was made permanent by the Court of Appeals (Seventh Division) was declared to
be limited only to the portion ofthe Omnibus Order that upheld the grant of letters of administrationby
SILVERIO, JR. and the removal of SILVERIO, SR. as administrator and nothing else.
Ocampo, Citrine and ZEE2 should not be prejudiced by the flip-flopping appointment of Administrator by
the intestate court, having relied in good faith that the sale was authorized and with prior approval of the
intestate court under its Omnibus Order dated October 31, 2006 which remained valid and subsisting insofar
as it allowed the aforesaid sale.
WHEREFORE, the petition is DENIED. The Decision dated March 8, 2013 and Resolution dated July 4,
2013 of the Court of Appeals in CAG.R. SP Nos. 121173 and 122024 are AFFIRMED.
With costs against the petitioner.

Anent the preliminary injunction issued by the intestate court in its Order dated 23 March 2011 and SO ORDERED.
challenged by SILVERIO JR. in CA-G.R. SP No. 121173, we find that it was issued with grave abuse of
discretion as it was directed against acts which were already [fait]accompli. The preliminary injunction
sought to: 1) restrain SILVERIO JR., their agents, or anybody acting in their behalf or any person from
committing any act that would affect the titles to the subject properties belonging to the Intestate Estate of
the late Beatriz Silverio and (2) enjoining the Register of Deeds of Makati City from accepting, admitting,
approving, registering, annotating or in any giving due course to whatever deeds, instruments or any other
documents involving voluntary or involuntary dealings which may have the effect of transferring,
conveying, encumbering, ceding, waiving, alienating or disposing in favor of any individual or any entity
the above-enumerated properties belonging to the Intestate Estate of the late Beatriz Silverio. However, the
records show that when the preliminary injunction was issued on 23 March 2011 new titles over the disputed
properties were already issued to CITRINE HOLDINGS, INC. and ZEE2 RESOURCES INC. 7 (Emphasis
supplied.)

We affirm the CA.

It bears to stress that the October 31, 2006 Omnibus Order was issued by the intestate court acting upon
pending motions filed by petitioner and respondent Silverio, Jr., father and son, respectively, who are the
central figures in the now decade-old controversy over the Intestate Estate of the late Beatriz S. Silverio. The
intestate court flip-flopped in appointing as administrator of the estate petitioner and respondent Silverio, Jr.,
their personal conflicts becoming more evident to the intestate court as the proceedings suffered delays. At
the hearing of the urgent motion filed by Edmundo Silverio to sell the subject properties and partially settle
the estate, the much awaited opportunity came when the heirs represented by their respective counsels
interposed no objection to the same.

While it is true that petitioner was eventually reinstated as Administrator pursuant to the August 28, 2008
decision in CA-G.R. SP No. 97196 (petition for certiorari filed by Nelia Silverio-Dee), weagree with the CA
that the permanent injunction issued under the said decision, as explicitly stated in its fallo, pertained only to
the portions of the October 31, 2006 Omnibus Order upholding the grant of letters of administration to and
taking of an oath of administration by respondent Silverio, Jr., as otherwise the CA would have expressly set
aside as well the directive in the same Omnibus Order allowing the sale of the subject properties. Moreover,
the CA Decision attained finality only on February 11, 2011 when this Court denied with finality respondent
Silverio, Jr.’s motion for reconsideration of the February 11, 2009 Resolution denyinghis petition for review
(G.R. No. 185619).1âwphi1

The CA therefore did not err in reversing the August 18, 2011 Order of the intestate court annulling the sale
of the subject properties grounded solely on the injunction issued in CA-G.R. SP No. 97196. Respondents

526
 THIRD DIVISION
G.R. No. 133743 February 6, 2007
EDGAR SAN LUIS, Petitioner,
vs.
FELICIDAD SAN LUIS, Respondent.
x ---------------------------------------------------- x
G.R. No. 134029 February 6, 2007
RODOLFO SAN LUIS, Petitioner,
vs.
FELICIDAD SAGALONGOS alias FELICIDAD SAN LUIS, Respondent.
DECISION
YNARES-SANTIAGO, J.:
Before us are consolidated petitions for review assailing the February 4, 1998 Decision 1 of the Court of
Appeals in CA-G.R. CV No. 52647, which reversed and set aside the September 12, 1995 2 and January 31,
1996 3Resolutions of the Regional Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and its
May 15, 1998 Resolution 4 denying petitioners’ motion for reconsideration.
The instant case involves the settlement of the estate of Felicisimo T. San Luis (Felicisimo), who was the
former governor of the Province of Laguna. During his lifetime, Felicisimo contracted three marriages. His
first marriage was with Virginia Sulit on March 17, 1942 out of which were born six children, namely:
Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On August 11, 1963, Virginia predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son, Tobias.
However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for Divorce 5 before the
Family Court of the First Circuit, State of Hawaii, United States of America (U.S.A.), which issued a Decree
Granting Absolute Divorce and Awarding Child Custody on December 14, 1973. 6
On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then surnamed Sagalongos, before
Rev. Fr. William Meyer, Minister of the United Presbyterian at Wilshire Boulevard, Los Angeles,
California, U.S.A. 7 He had no children with respondent but lived with her for 18 years from the time of
their marriage up to his death on December 18, 1992.
Thereafter, respondent sought the dissolution of their conjugal partnership assets and the settlement of
Felicisimo’s estate. On December 17, 1993, she filed a petition for letters of administration 8 before the
Regional Trial Court of Makati City, docketed as SP. Proc. No. M-3708 which was raffled to Branch 146
thereof.
Respondent alleged that she is the widow of Felicisimo; that, at the time of his death, the decedent was
residing at 100 San Juanico Street, New Alabang Village, Alabang, Metro Manila; that the decedent’s
surviving heirs are respondent as legal spouse, his six children by his first marriage, and son by his second
marriage; that the decedent left real properties, both conjugal and exclusive, valued at ₱30,304,178.00 more
or less; that the decedent does not have any unpaid debts. Respondent prayed that the conjugal partnership
assets be liquidated and that letters of administration be issued to her.
On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by his first marriage,
filed a motion to dismiss 9 on the grounds of improper venue and failure to state a cause of action. Rodolfo
claimed that the petition for letters of administration should have been filed in the Province of Laguna
because this was Felicisimo’s place of residence prior to his death. He further claimed that respondent has
no legal personality to file the petition because she was only a mistress of Felicisimo since the latter, at the
time of his death, was still legally married to Merry Lee.
On February 15, 1994, Linda invoked the same grounds and joined her brother Rodolfo in seeking the
dismissal 10of the petition. On February 28, 1994, the trial court issued an Order 11 denying the two motions
to dismiss.
Unaware of the denial of the motions to dismiss, respondent filed on March 5, 1994 her
opposition 12 thereto. She submitted documentary evidence showing that while Felicisimo exercised the
527
powers of his public office in Laguna, he regularly went home to their house in New Alabang Village,
Alabang, Metro Manila which they bought sometime in 1982. Further, she presented the decree of absolute
divorce issued by the Family Court of the First Circuit, State of Hawaii to prove that the marriage of
Felicisimo to Merry Lee had already been dissolved. Thus, she claimed that Felicisimo had the legal
capacity to marry her by virtue of paragraph 2, 13 Article 26 of the Family Code and the doctrine laid down
in Van Dorn v. Romillo, Jr. 14
Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately filed motions for
reconsideration from the Order denying their motions to dismiss. 15 They asserted that paragraph 2, Article
26 of the Family Code cannot be given retroactive effect to validate respondent’s bigamous marriage with
Felicisimo because this would impair vested rights in derogation of Article 256 16 of the Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage, filed a motion to disqualify
Acting Presiding Judge Anthony E. Santos from hearing the case.
On October 24, 1994, the trial court issued an Order 17 denying the motions for reconsideration. It ruled that
respondent, as widow of the decedent, possessed the legal standing to file the petition and that venue was
properly laid. Meanwhile, the motion for disqualification was deemed moot and academic 18 because then
Acting Presiding Judge Santos was substituted by Judge Salvador S. Tensuan pending the resolution of said
motion.
Mila filed a motion for inhibition 19 against Judge Tensuan on November 16, 1994. On even date, Edgar also
filed a motion for reconsideration 20 from the Order denying their motion for reconsideration arguing that it
does not state the facts and law on which it was based.
On November 25, 1994, Judge Tensuan issued an Order 21 granting the motion for inhibition. The case was
re-raffled to Branch 134 presided by Judge Paul T. Arcangel.
On April 24, 1995, 22 the trial court required the parties to submit their respective position papers on the twin
issues of venue and legal capacity of respondent to file the petition. On May 5, 1995, Edgar
manifested 23 that he is adopting the arguments and evidence set forth in his previous motion for
reconsideration as his position paper. Respondent and Rodolfo filed their position papers on June 14, 24 and
June 20, 25 1995, respectively.
On September 12, 1995, the trial court dismissed the petition for letters of administration. It held that, at the
time of his death, Felicisimo was the duly elected governor and a resident of the Province of Laguna. Hence,
the petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It also ruled that respondent
was without legal capacity to file the petition for letters of administration because her marriage with
Felicisimo was bigamous, thus, void ab initio. It found that the decree of absolute divorce dissolving
Felicisimo’s marriage to Merry Lee was not valid in the Philippines and did not bind Felicisimo who was a
Filipino citizen. It also ruled that paragraph 2, Article 26 of the Family Code cannot be retroactively applied
because it would impair the vested rights of Felicisimo’s legitimate children.
Respondent moved for reconsideration 26 and for the disqualification 27 of Judge Arcangel but said motions
were denied. 28
Respondent appealed to the Court of Appeals which reversed and set aside the orders of the trial court in its
assailed Decision dated February 4, 1998, the dispositive portion of which states:
WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996 are hereby REVERSED and
SET ASIDE; the Orders dated February 28 and October 24, 1994 are REINSTATED; and the records of the
case is REMANDED to the trial court for further proceedings. 29
The appellante court ruled that under Section 1, Rule 73 of the Rules of Court, the term "place of residence"
of the decedent, for purposes of fixing the venue of the settlement of his estate, refers to the personal, actual
or physical habitation, or actual residence or place of abode of a person as distinguished from legal
residence or domicile. It noted that although Felicisimo discharged his functions as governor in Laguna, he
actually resided in Alabang, Muntinlupa. Thus, the petition for letters of administration was properly filed in
Makati City.
The Court of Appeals also held that Felicisimo had legal capacity to marry respondent by virtue of
paragraph 2, Article 26 of the Family Code and the rulings in Van Dorn v. Romillo, Jr. 30 and Pilapil v. Ibay-
Somera. 31 It found that the marriage between Felicisimo and Merry Lee was validly dissolved by virtue of
the decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii. As a result,
under paragraph 2, Article 26, Felicisimo was capacitated to contract a subsequent marriage with
respondent. Thus –
With the well-known rule – express mandate of paragraph 2, Article 26, of the Family Code of the
Philippines, the doctrines in Van Dorn, Pilapil, and the reason and philosophy behind the enactment of E.O.
No. 227, — there is no justiciable reason to sustain the individual view — sweeping statement — of Judge
Arc[h]angel, that "Article 26, par. 2 of the Family Code, contravenes the basic policy of our state against
divorce in any form whatsoever." Indeed, courts cannot deny what the law grants. All that the courts should
do is to give force and effect to the express mandate of the law. The foreign divorce having been obtained by
the Foreigner on December 14, 1992, 32 the Filipino divorcee, "shall x x x have capacity to remarry under
Philippine laws". For this reason, the marriage between the deceased and petitioner should not be
denominated as "a bigamous marriage.
Therefore, under Article 130 of the Family Code, the petitioner as the surviving spouse can institute the
judicial proceeding for the settlement of the estate of the deceased. x x x 33
Edgar, Linda, and Rodolfo filed separate motions for reconsideration 34 which were denied by the Court of
Appeals.
On July 2, 1998, Edgar appealed to this Court via the instant petition for review on certiorari. 35 Rodolfo
later filed a manifestation and motion to adopt the said petition which was granted. 36
In the instant consolidated petitions, Edgar and Rodolfo insist that the venue of the subject petition for
letters of administration was improperly laid because at the time of his death, Felicisimo was a resident of
Sta. Cruz, Laguna. They contend that pursuant to our rulings in Nuval v. Guray 37 and Romualdez v. RTC,
Br. 7, Tacloban City, 38"residence" is synonymous with "domicile" which denotes a fixed permanent
residence to which when absent, one intends to return. They claim that a person can only have one domicile
at any given time. Since Felicisimo never changed his domicile, the petition for letters of administration
should have been filed in Sta. Cruz, Laguna.
Petitioners also contend that respondent’s marriage to Felicisimo was void and bigamous because it was
performed during the subsistence of the latter’s marriage to Merry Lee. They argue that paragraph 2, Article
26 cannot be retroactively applied because it would impair vested rights and ratify the void bigamous
marriage. As such, respondent cannot be considered the surviving wife of Felicisimo; hence, she has no
legal capacity to file the petition for letters of administration.
The issues for resolution: (1) whether venue was properly laid, and (2) whether respondent has legal
capacity to file the subject petition for letters of administration.
The petition lacks merit.
Under Section 1, 39 Rule 73 of the Rules of Court, the petition for letters of administration of the estate of
Felicisimo should be filed in the Regional Trial Court of the province "in which he resides at the time of his
death." In the case of Garcia Fule v. Court of Appeals, 40 we laid down the doctrinal rule for determining the
residence – as contradistinguished from domicile – of the decedent for purposes of fixing the venue of the
settlement of his estate:
[T]he term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or
domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be interpreted
in the light of the object or purpose of the statute or rule in which it is employed. In the application of venue
statutes and rules – Section 1, Rule 73 of the Revised Rules of Court is of such nature – residence rather
than domicile is the significant factor. Even where the statute uses the word "domicile" still it is construed as
meaning residence and not domicile in the technical sense. Some cases make a distinction between the terms
"residence" and "domicile" but as generally used in statutes fixing venue, the terms are synonymous, and
convey the same meaning as the term "inhabitant." In other words, "resides" should be viewed or understood
528
in its popular sense, meaning, the personal, actual or physical habitation of a person, actual residence or
place of abode. It signifies physical presence in a place and actual stay thereat. In this popular sense, the
term means merely residence, that is, personal residence, not legal residence or domicile. Residence simply
requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that
place and also an intention to make it one’s domicile. No particular length of time of residence is required
though; however, the residence must be more than temporary. 41 (Emphasis supplied)
It is incorrect for petitioners to argue that "residence," for purposes of fixing the venue of the settlement of
the estate of Felicisimo, is synonymous with "domicile." The rulings in Nuval and Romualdez are
inapplicable to the instant case because they involve election cases. Needless to say, there is a distinction
between "residence" for purposes of election laws and "residence" for purposes of fixing the venue of
actions. In election cases, "residence" and "domicile" are treated as synonymous terms, that is, the fixed
permanent residence to which when absent, one has the intention of returning. 42 However, for purposes of
fixing venue under the Rules of Court, the "residence" of a person is his personal, actual or physical
habitation, or actual residence or place of abode, which may not necessarily be his legal residence or
domicile provided he resides therein with continuity and consistency. 43 Hence, it is possible that a person
may have his residence in one place and domicile in another.
In the instant case, while petitioners established that Felicisimo was domiciled in Sta. Cruz, Laguna,
respondent proved that he also maintained a residence in Alabang, Muntinlupa from 1982 up to the time of
his death. Respondent submitted in evidence the Deed of Absolute Sale 44 dated January 5, 1983 showing
that the deceased purchased the aforesaid property. She also presented billing statements 45 from the
Philippine Heart Center and Chinese General Hospital for the period August to December 1992 indicating
the address of Felicisimo at "100 San Juanico, Ayala Alabang, Muntinlupa." Respondent also presented
proof of membership of the deceased in the Ayala Alabang Village Association 46 and Ayala Country Club,
Inc., 47 letter-envelopes 48 from 1988 to 1990 sent by the deceased’s children to him at his Alabang address,
and the deceased’s calling cards 49 stating that his home/city address is at "100 San Juanico, Ayala Alabang
Village, Muntinlupa" while his office/provincial address is in "Provincial Capitol, Sta. Cruz, Laguna."
From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for purposes of fixing
the venue of the settlement of his estate. Consequently, the subject petition for letters of administration was
validly filed in the Regional Trial Court 50 which has territorial jurisdiction over Alabang, Muntinlupa. The
subject petition was filed on December 17, 1993. At that time, Muntinlupa was still a municipality and the
branches of the Regional Trial Court of the National Capital Judicial Region which had territorial
jurisdiction over Muntinlupa were then seated in Makati City as per Supreme Court Administrative Order
No. 3. 51 Thus, the subject petition was validly filed before the Regional Trial Court of Makati City.
Anent the issue of respondent Felicidad’s legal personality to file the petition for letters of administration,
we must first resolve the issue of whether a Filipino who is divorced by his alien spouse abroad may validly
remarry under the Civil Code, considering that Felicidad’s marriage to Felicisimo was solemnized on June
20, 1974, or before the Family Code took effect on August 3, 1988. In resolving this issue, we need not
retroactively apply the provisions of the Family Code, particularly Art. 26, par. (2) considering that there is
sufficient jurisprudential basis allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr. 52 involved a marriage between a foreigner and his Filipino wife,
which marriage was subsequently dissolved through a divorce obtained abroad by the latter. Claiming that
the divorce was not valid under Philippine law, the alien spouse alleged that his interest in the properties
from their conjugal partnership should be protected. The Court, however, recognized the validity of the
divorce and held that the alien spouse had no interest in the properties acquired by the Filipino wife after the
divorce. Thus:
In this case, the divorce in Nevada released private respondent from the marriage from the standards of
American law, under which divorce dissolves the marriage. As stated by the Federal Supreme Court of the
United States in Atherton vs. Atherton, 45 L. Ed. 794, 799:
"The purpose and effect of a decree of divorce from the bond of matrimony by a competent jurisdiction are
to change the existing status or domestic relation of husband and wife, and to free them both from the bond.
The marriage tie, when thus severed as to one party, ceases to bind either. A husband without a wife, or a
wife without a husband, is unknown to the law. When the law provides, in the nature of a penalty, that the
guilty party shall not marry again, that party, as well as the other, is still absolutely freed from the bond of
the former marriage."
Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would have
no standing to sue in the case below as petitioner’s husband entitled to exercise control over conjugal assets.
As he is bound by the Decision of his own country’s Court, which validly exercised jurisdiction over him,
and whose decision he does not repudiate, he is estopped by his own representation before said Court from
asserting his right over the alleged conjugal property. 53
As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longer be considered
married to the alien spouse. Further, she should not be required to perform her marital duties and
obligations. It held:
To maintain, as private respondent does, that, under our laws, petitioner has to be considered still marriedto
private respondent and still subject to a wife's obligations under Article 109, et. seq. of the Civil
Code cannot be just. Petitioner should not be obliged to live together with, observe respect and fidelity, and
render support to private respondent. The latter should not continue to be one of her heirs with possible
rights to conjugal property. She should not be discriminated against in her own country if the ends of justice
are to be served.54 (Emphasis added)
This principle was thereafter applied in Pilapil v. Ibay-Somera 55 where the Court recognized the validity of
a divorce obtained abroad. In the said case, it was held that the alien spouse is not a proper party in filing the
adultery suit against his Filipino wife. The Court stated that "the severance of the marital bond had the effect
of dissociating the former spouses from each other, hence the actuations of one would not affect or cast
obloquy on the other." 56
Likewise, in Quita v. Court of Appeals, 57 the Court stated that where a Filipino is divorced by his
naturalized foreign spouse, the ruling in Van Dorn applies. 58 Although decided on December 22, 1998, the
divorce in the said case was obtained in 1954 when the Civil Code provisions were still in effect.
The significance of the Van Dorn case to the development of limited recognition of divorce in the
Philippines cannot be denied. The ruling has long been interpreted as severing marital ties between parties in
a mixed marriage and capacitating the Filipino spouse to remarry as a necessary consequence of upholding
the validity of a divorce obtained abroad by the alien spouse. In his treatise, Dr. Arturo M. Tolentino
cited Van Dorn stating that "if the foreigner obtains a valid foreign divorce, the Filipino spouse shall have
capacity to remarry under Philippine law." 59In Garcia v. Recio, 60 the Court likewise cited the
aforementioned case in relation to Article 26. 61
In the recent case of Republic v. Orbecido III, 62 the historical background and legislative intent behind
paragraph 2, Article 26 of the Family Code were discussed, to wit:
Brief Historical Background
On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise known
as the "Family Code," which took effect on August 3, 1988. Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited
under Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was
likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. A second paragraph was
added to Article 26. As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there as such, shall also be valid in this country, except those
prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
529
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall have capacity to remarry under Philippine law. (Emphasis supplied)
xxxx
Legislative Intent
Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2 of
Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to
avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after
obtaining a divorce, is no longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo,
Jr. The Van Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court held
therein that a divorce decree validly obtained by the alien spouse is valid in the Philippines, and
consequently, the Filipino spouse is capacitated to remarry under Philippine law. 63 (Emphasis added)
As such, the Van Dorn case is sufficient basis in resolving a situation where a divorce is validly obtained
abroad by the alien spouse. With the enactment of the Family Code and paragraph 2, Article 26 thereof, our
lawmakers codified the law already established through judicial precedent.1awphi1.net
Indeed, when the object of a marriage is defeated by rendering its continuance intolerable to one of the
parties and productive of no possible good to the community, relief in some way should be
obtainable. 64 Marriage, being a mutual and shared commitment between two parties, cannot possibly be
productive of any good to the society where one is considered released from the marital bond while the other
remains bound to it. Such is the state of affairs where the alien spouse obtains a valid divorce abroad against
the Filipino spouse, as in this case.
Petitioners cite Articles 15 65 and 17 66 of the Civil Code in stating that the divorce is void under Philippine
law insofar as Filipinos are concerned. However, in light of this Court’s rulings in the cases discussed
above, the Filipino spouse should not be discriminated against in his own country if the ends of justice are to
be served. 67 In Alonzo v. Intermediate Appellate Court, 68 the Court stated:
But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its purposes.
It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should be to
discover in its provisions the intent of the lawmaker. Unquestionably, the law should never be interpreted in
such a way as to cause injustice as this is never within the legislative intent. An indispensable part of that
intent, in fact, for we presume the good motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice
are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may
seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation,
we are not bound, because only of our nature and functions, to apply them just the same, in slavish
obedience to their language. What we do instead is find a balance between the word and the will, that justice
may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded,
yielding like robots to the literal command without regard to its cause and consequence. "Courts are apt to
err by sticking too closely to the words of a law," so we are warned, by Justice Holmes again, "where these
words import a policy that goes beyond them."
xxxx
More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to render every
one his due." That wish continues to motivate this Court when it assesses the facts and the law in every case
brought to it for decision. Justice is always an essential ingredient of its decisions. Thus when the facts
warrants, we interpret the law in a way that will render justice, presuming that it was the intention of the
lawmaker, to begin with, that the law be dispensed with justice. 69
Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry Lee which
absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal personality to file the
present petition as Felicisimo’s surviving spouse. However, the records show that there is insufficient up to the extent of the proven actual contribution of money, property or industry. Absent proof of the extent
evidence to prove the validity of the divorce obtained by Merry Lee as well as the marriage of respondent thereof, their contributions and corresponding shares shall be presumed to be equal.
and Felicisimo under the laws of the U.S.A. In Garcia v. Recio, 70 the Court laid down the specific xxxx
guidelines for pleading and proving foreign law and divorce judgments. It held that presentation solely of In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-ownership of
the divorce decree is insufficient and that proof of its authenticity and due execution must be presented. properties acquired by the parties to a bigamous marriage and an adulterous relationship, respectively, we
Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or official record of ruled that proof of actual contribution in the acquisition of the property is essential. x x x
a foreign country by either (1) an official publication or (2) a copy thereof attested by the officer having As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the
legal custody of the document. If the record is not kept in the Philippines, such copy must be (a) nature of the case, asserts an affirmative issue. Contentions must be proved by competent evidence and
accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign reliance must be had on the strength of the party’s own evidence and not upon the weakness of the
service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his opponent’s defense. x x x 81
office. 71 In view of the foregoing, we find that respondent’s legal capacity to file the subject petition for letters of
With regard to respondent’s marriage to Felicisimo allegedly solemnized in California, U.S.A., she administration may arise from her status as the surviving wife of Felicisimo or as his co-owner under Article
submitted photocopies of the Marriage Certificate and the annotated text 72 of the Family Law Act of 144 of the Civil Code or Article 148 of the Family Code.
California which purportedly show that their marriage was done in accordance with the said law. As stated WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals reinstating and affirming the
in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be alleged and February 28, 1994 Order of the Regional Trial Court which denied petitioners’ motion to dismiss and its
proved. 73 October 24, 1994 Order which dismissed petitioners’ motion for reconsideration is AFFIRMED. Let this
Therefore, this case should be remanded to the trial court for further reception of evidence on the divorce case be REMANDED to the trial court for further proceedings.
decree obtained by Merry Lee and the marriage of respondent and Felicisimo. SO ORDERED.
Even assuming that Felicisimo was not capacitated to marry respondent in 1974, nevertheless, we find that
the latter has the legal personality to file the subject petition for letters of administration, as she may be
considered the co-owner of Felicisimo as regards the properties that were acquired through their joint efforts
during their cohabitation.
Section 6, 74 Rule 78 of the Rules of Court states that letters of administration may be granted to the
surviving spouse of the decedent. However, Section 2, Rule 79 thereof also provides in part:
SEC. 2. Contents of petition for letters of administration. – A petition for letters of administration must be
filed by an interested person and must show, as far as known to the petitioner: x x x.
An "interested person" has been defined as one who would be benefited by the estate, such as an heir, or one
who has a claim against the estate, such as a creditor. The interest must be material and direct, and not
merely indirect or contingent. 75
In the instant case, respondent would qualify as an interested person who has a direct interest in the estate of
Felicisimo by virtue of their cohabitation, the existence of which was not denied by petitioners. If she proves
the validity of the divorce and Felicisimo’s capacity to remarry, but fails to prove that her marriage with him
was validly performed under the laws of the U.S.A., then she may be considered as a co-owner under Article
144 76 of the Civil Code. This provision governs the property relations between parties who live together as
husband and wife without the benefit of marriage, or their marriage is void from the beginning. It provides
that the property acquired by either or both of them through their work or industry or their wages and
salaries shall be governed by the rules on co-ownership. In a co-ownership, it is not necessary that the
property be acquired through their joint labor, efforts and industry. Any property acquired during the union
is prima facie presumed to have been obtained through their joint efforts. Hence, the portions belonging to
the co-owners shall be presumed equal, unless the contrary is proven. 77
Meanwhile, if respondent fails to prove the validity of both the divorce and the marriage, the applicable
provision would be Article 148 of the Family Code which has filled the hiatus in Article 144 of the Civil
Code by expressly regulating the property relations of couples living together as husband and wife but are
incapacitated to marry. 78 In Saguid v. Court of Appeals, 79 we held that even if the cohabitation or the
acquisition of property occurred before the Family Code took effect, Article 148 governs. 80 The Court
described the property regime under this provision as follows:
The regime of limited co-ownership of property governing the union of parties who are not legally
capacitated to marry each other, but who nonetheless live together as husband and wife, applies to properties
acquired during said cohabitation in proportion to their respective contributions. Co-ownership will only be

530
 SECOND DIVISION possess the desire to earn. They claimed that the best interests of the estate dictate that Joseph be appointed
G.R. No. 177099 June 8, 2011 as special or regular administrator.
EDUARDO G. AGTARAP, Petitioner, On February 16, 1995, the RTC issued a resolution appointing Eduardo as regular administrator of Joaquin’s
vs. estate. Consequently, it issued him letters of administration.
SEBASTIAN AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER DE SANTOS, and On September 16, 1995, Abelardo Dagoro filed an answer in intervention, alleging that Mercedes is
ABELARDO DAGORO, Respondents. survived not only by her daughter Cecile, but also by him as her husband. He also averred that there is a
x - - - - - - - - - - - - - - - - - - - - - - -x need to appoint a special administrator to the estate, but claimed that Eduardo is not the person best qualified
G.R. No. 177192 for the task.
SEBASTIAN G. AGTARAP, Petitioner, After the parties were given the opportunity to be heard and to submit their respective proposed projects of
vs. partition, the RTC, on October 23, 2000, issued an Order of Partition, 8 with the following disposition—
EDUARDO G. AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER DE SANTOS, and In the light of the filing by the heirs of their respective proposed projects of partition and the payment of
ABELARDO DAGORO, Respondents. inheritance taxes due the estate as early as 1965, and there being no claim in Court against the estate of the
DECISION deceased, the estate of JOAQUIN AGTARAP is now consequently – ripe – for distribution among the heirs
NACHURA, J.: minus the surviving spouse Caridad Garcia who died on August 25, 1999.
Before us are the consolidated petitions for review on certiorari of petitioners Sebastian G. Agtarap Considering that the bulk of the estate property were acquired during the existence of the second marriage as
(Sebastian)1 and Eduardo G. Agtarap (Eduardo),2 assailing the Decision dated November 21, 20063 and the shown by TCT No. (38254) and TCT No. (38255) which showed on its face that decedent was married to
Resolution dated March 27, 20074 of the Court of Appeals (CA) in CA-G.R. CV No. 73916. Caridad Garcia, which fact oppositors failed to contradict by evidence other than their negative allegations,
The antecedent facts and proceedings— the greater part of the estate is perforce accounted by the second marriage and the compulsory heirs
On September 15, 1994, Eduardo filed with the Regional Trial Court (RTC), Branch 114, Pasay City, a thereunder.
verified petition for the judicial settlement of the estate of his deceased father Joaquin Agtarap (Joaquin). It The Administrator, Eduardo Agtarap rendered a true and just accounting of his administration from his date
was docketed as Special Proceedings No. 94-4055. of assumption up to the year ending December 31, 1996 per Financial and Accounting Report dated June 2,
The petition alleged that Joaquin died intestate on November 21, 1964 in Pasay City without any known 1997 which was approved by the Court. The accounting report included the income earned and received for
debts or obligations. During his lifetime, Joaquin contracted two marriages, first with Lucia Garcia the period and the expenses incurred in the administration, sustenance and allowance of the widow. In
(Lucia),5 and second with Caridad Garcia (Caridad). Lucia died on April 24, 1924. Joaquin and Lucia had accordance with said Financial and Accounting Report which was duly approved by this Court in its
three children—Jesus (died without issue), Milagros, and Jose (survived by three children, namely, Resolution dated July 28, 1998 – the deceased JOAQUIN AGTARAP left real properties consisting of the
Gloria,6 Joseph, and Teresa7). Joaquin married Caridad on February 9, 1926. They also had three children— following:
Eduardo, Sebastian, and Mercedes (survived by her daughter Cecile). At the time of his death, Joaquin left I LAND:
two parcels of land with improvements in Pasay City, covered by Transfer Certificates of Title (TCT) Nos. Two lots and two buildings with one garage quarter located at #3030 Agtarap St., Pasay City, covered by
873-(38254) and 874-(38255). Joseph, a grandson of Joaquin, had been leasing and improving the said Transfer Certificate of Title Nos. 38254 and 38255 and registered with the Registry of Deeds of Pasay City,
realties and had been appropriating for himself ₱26,000.00 per month since April 1994. Metro Manila, described as follows:
Eduardo further alleged that there was an imperative need to appoint him as special administrator to take
TCT NO. LOT NO. AREA/SQ.M. ZONAL VALUE AMOUNT
possession and charge of the estate assets and their civil fruits, pending the appointment of a regular
administrator. In addition, he prayed that an order be issued (a) confirming and declaring the named 38254 745-B-1 1,335 sq. m. ₱5,000.00 ₱6,675,000.00
compulsory heirs of Joaquin who would be entitled to participate in the estate; (b) apportioning and
allocating unto the named heirs their aliquot shares in the estate in accordance with law; and (c) entitling the 38255 745-B-2 1,331 sq. m. ₱5,000.00 ₱6,655,000.00
distributees the right to receive and enter into possession those parts of the estate individually awarded to
them.
On September 26, 1994, the RTC issued an order setting the petition for initial hearing and directing TOTAL------------------------------------------------------------- ₱13,330,000.00
Eduardo to cause its publication.
II BUILDINGS AND IMPROVEMENTS:
On December 28, 1994, Sebastian filed his comment, generally admitting the allegations in the petition, and
conceding to the appointment of Eduardo as special administrator. BUILDING I (Lot # 745-B-1) ------------------------------ ₱350,000.00
Joseph, Gloria, and Teresa filed their answer/opposition. They alleged that the two subject lots belong to the
conjugal partnership of Joaquin with Lucia, and that, upon Lucia’s death in April 1924, they became the pro BUILDING II (Lot # 745-B-2) ----------------------------- 320,000.00
indiviso owners of the subject properties. They said that their residence was built with the exclusive money
of their late father Jose, and the expenses of the extensions to the house were shouldered by Gloria and Building Improvements -------------------------------------- 97,500.00
Teresa, while the restaurant (Manong’s Restaurant) was built with the exclusive money of Joseph and his Restaurant ------------------------------------------------------ 80,000.00
business partner. They opposed the appointment of Eduardo as administrator on the following grounds: (1)
he is not physically and mentally fit to do so; (2) his interest in the lots is minimal; and (3) he does not

531
 TOTAL --------------------------------------------------------- ₱847,500.00 HEIRS OF THE FIRST MARRIAGE:
1avvphi1
TOTAL NET WORTH ----------------------------------------- ₱14,177,500.00 1) JOSEPH AGTARAP - ₱236,291.66 – share from Milagros Agtarap
WHEREFORE, the net assets of the estate of the late JOAQUIN AGTARAP with a total value of ₱295,364.57 – as compulsory heir of
₱14,177,500.00, together with whatever interest from bank deposits and all other incomes or increments ₱531,656.23 Jose Agtarap
thereof accruing after the Accounting Report of December 31, 1996, after deducting therefrom the
compensation of the administrator and other expenses allowed by the Court, are hereby ordered distributed 2) TERESA AGTARAP - ₱236,291.66 – share from Milagros Agtarap
as follows: ₱295,364.57 – as compulsory heir of
TOTAL ESTATE – ₱14,177,500.00 ₱531,656.23 Jose Agtarap
CARIDAD AGTARAP – ½ of the estate as her conjugal share – ₱7,088,750.00, the other half of 3) WALTER DE SANTOS - ₱236,291.66 – share from Milagros Agtarap
₱7,088,750.00 – to be divided among the compulsory heirs as follows: ₱295,364.57 – as compulsory heir of
1) JOSE (deceased) - ₱1,181,548.30 ₱531,656.23 Jose Agtarap

2) MILAGROS (deceased) - ₱1,181,548.30 HEIRS OF THE SECOND MARRIAGE:

a) CARIDAD AGTARAP - died on August 25, 1999
3) MERCEDES (deceased) - ₱1,181,548.30
₱7,088,750.00 - as conjugal share
4) SEBASTIAN - ₱1,181,548.30
₱1,181,458.30 - as compulsory heir
5) EDUARDO - ₱1,181,548.30

6) CARIDAD - ₱1,181,548.30 Total of ₱8,270,208.30

The share of Milagros Agtarap as compulsory heir in the amount of ₱1,181,548.30 and who died in 1996
will go to Teresa Agtarap and Joseph Agtarap, Walter de Santos and half brothers Eduardo and Sebastian b) SEBASTIAN AGTARAP - ₱1,181,458.38 – as compulsory heir
Agtarap in equal proportions. ₱ 236,291.66 – share from Milagros
TERESA AGTARAP - ₱236,291.66
c) EDUARDO AGTARAP - ₱1,181,458.38 – as compulsory heir
JOSEPH AGTARAP - ₱236,291.66
₱ 236,291.66 – share from Milagros
WALTER DE SANTOS - ₱236,291.66
d) MERCEDES - as represented by Abelardo Dagoro as the
SEBASTIAN AGTARAP - ₱236,291.66 surviving spouse of a compulsory heir

EDUARDO AGTARAP - ₱236,291.66 ₱1,181,458.38

Jose Agtarap died in 1967. His compulsory heirs are as follows: REMAINING HEIRS OF CARIDAD AGTARAP:
COMPULSORY HEIRS: 1) SEBASTIAN AGTARAP
2) EDUARDO AGTARAP
1) GLORIA – (deceased) – represented by Walter de Santos –
MERCEDES AGTARAP (Predeceased Caridad Agtarap)
- ₱295,364.57 In sum, Sebastian Agtarap and Eduardo Agtarap stand to inherit:
SEBASTIAN – ₱4,135,104.10 – share from Caridad Garcia
2) JOSEPH AGTARAP - ₱295,364.57 ₱1,181,458.30 - as compulsory heir
₱ 236,291.66 - share from Milagros
3) TERESA AGTARAP - ₱295,364.57

4) PRISCILLA AGTARAP - ₱295,364.57 ₱5,522,854.06

Hence, Priscilla Agtarap will inherit ₱295,364.57. EDUARDO – ₱4,135,104.10 – share from Caridad Garcia
Adding their share from Milagros Agtarap, the following heirs of the first marriage stand to receive the total ₱1,181,458.30 – as compulsory heir
amount of:

532
 ₱ 236,291.66 – share from Milagros
₱5,522,854.06
9
SO ORDERED.
Eduardo, Sebastian, and oppositors Joseph and Teresa filed their respective motions for reconsideration.
On August 27, 2001, the RTC issued a resolution 10 denying the motions for reconsideration of Eduardo and
Sebastian, and granting that of Joseph and Teresa. It also declared that the real estate properties belonged to
the conjugal partnership of Joaquin and Lucia. It also directed the modification of the October 23, 2000
Order of Partition to reflect the correct sharing of the heirs. However, before the RTC could issue a new
order of partition, Eduardo and Sebastian both appealed to the CA.
On November 21, 2006, the CA rendered its Decision, the dispositive portion of which reads—
WHEREFORE, premises considered, the instant appeals are DISMISSED for lack of merit. The assailed
Resolution dated August 27, 2001 is AFFIRMED and pursuant thereto, the subject properties (Lot No. 745-
B-1 [TCT No. 38254] and Lot No. 745-B-2 [TCT No. 38255]) and the estate of the late Joaquin Agtarap are
hereby partitioned as follows:
The two (2) properties, together with their improvements, embraced by TCT No. 38254 and TCT No.
38255, respectively, are first to be distributed among the following:
Lucia Mendietta - ½ of the property. But since she is deceased, her share shall be inherited by Joaquin,
Jesus, Milagros and Jose in equal shares.
Joaquin Agtarap - ½ of the property and ¼ of the other half of the property which pertains to Lucia
Mendietta’s share.
Jesus Agtarap - ¼ of Lucia Mendietta’s share. But since he is already deceased (and died without issue), his
inheritance shall, in turn, be acquired by Joaquin Agtarap.
Milagros Agtarap - ¼ of Lucia Mendietta’s share. But since she died in 1996 without issue, 5/8 of her
inheritance shall be inherited by Gloria (represented by her husband Walter de Santos and her daughter
Samantha), Joseph Agtarap and Teresa Agtarap, (in representation of Milagros’ brother Jose Agtarap) and
1/8 each shall be inherited by Mercedes (represented by her husband Abelardo Dagoro and her daughter
Cecile), Sebastian Eduardo, all surnamed Agtarap.
Jose Agtarap - ¼ of Lucia Mendietta’s share. But since he died in 1967, his inheritance shall be acquired by
his wife Priscilla, and children Gloria (represented by her husband Walter de Santos and her daughter
Samantha), Joseph Agtarap and Teresa in equal shares.
Then, Joaquin Agtarap’s estate, comprising three-fourths (3/4) of the subject properties and its
improvements, shall be distributed as follows:
Caridad Garcia - 1/6 of the estate. But since she died in 1999, her share shall be inherited by her children
namely Mercedes Agtarap (represented by her husband Abelardo Dagoro and her daughter Cecilia),
Sebastian Agtarap and Eduardo Agtarap in their own right, dividing the inheritance in equal shares.
Milagros Agtarap - 1/6 of the estate. But since she died in 1996 without issue, 5/8 of her inheritance shall be
inherited by Gloria (represented by her husband Walter de Santos and her daughter Samantha), Joseph
Agtarap and Teresa Agtarap, (in representation of Milagros’ brother Jose Agtarap) and 1/8 each shall be
inherited by Mercedes (represented by her husband Abelardo Dagoro and her daughter Cecile), Sebastian
and Eduardo, all surnamed Agtarap.
Jose Agtarap - 1/6 of the estate. But since he died in 1967, his inheritance shall be acquired by his wife
Priscilla, and children Gloria (represented by her husband Walter de Santos and her daughter Samantha),
Joseph Agtarap and Teresa Agtarap in equal shares.
Mercedes Agtarap - 1/6 of the estate. But since she died in 1984, her inheritance shall be acquired by her
husband Abelardo Dagoro and her daughter Cecile in equal shares.
Sebastian Agtarap - 1/6 of the estate.
Eduardo Agtarap - 1/6 of the estate.
533
SO ORDERED.11
Aggrieved, Sebastian and Eduardo filed their respective motions for reconsideration.
In its Resolution dated March 27, 2007, the CA denied both motions. Hence, these petitions ascribing to the
appellate court the following errors:
G.R. No. 177192
1. – The Court of Appeals erred in not considering the aforementioned important facts 12 which
alter its Decision;
2. – The Court of Appeals erred in not considering the necessity of hearing the issue of legitimacy
of respondents as heirs;
3. – The Court of Appeals erred in allowing violation of the law and in not applying the doctrines
of collateral attack, estoppel, and res judicata.13
G.R. No. 177099
THE COURT OF APPEALS (FORMER TWELFTH DIVISION) DID NOT ACQUIRE JURISDICTION
OVER THE ESTATE OF MILAGROS G. AGTARAP AND ERRED IN DISTRIBUTING HER
INHERITANCE FROM THE ESTATE OF JOAQUIN AGTARAP NOTWITHSTANDING THE
EXISTENCE OF HER LAST WILL AND TESTAMENT IN VIOLATION OF THE DOCTRINE OF
PRECEDENCE OF TESTATE PROCEEDINGS OVER INTESTATE PROCEEDINGS.
II.
THE COURT OF APPEALS (FORMER TWELFTH DIVISION) ERRED IN DISMISSING THE
DECISION APPEALED FROM FOR LACK OF MERIT AND IN AFFIRMING THE ASSAILED
RESOLUTION DATED AUGUST 27, 2001 OF THE LOWER COURT HOLDING THAT THE
PARCELS OF LAND COVERED BY TCT NO. 38254 AND TCT (NO.) 38255 OF THE REGISTRY OF
DEEDS FOR THE CITY OF PASAY BELONG TO THE CONJUGAL PARTNERSHIP OF JOAQUIN
AGTARAP MARRIED TO LUCIA GARCIA MENDIETTA NOTWITHSTANDING THEIR
REGISTRATION UNDER THEIR EXISTING CERTIFICATES OF TITLE AS REGISTERED IN THE
NAME OF JOAQUIN AGTARAP, CASADO CON CARIDAD GARCIA. UNDER EXISTING
JURISPRUDENCE, THE PROBATE COURT HAS NO POWER TO DETERMINE THE OWNERSHIP
OF THE PROPERTY DESCRIBED IN THESE CERTIFICATES OF TITLE WHICH SHOULD BE
RESOLVED IN AN APPROPRIATE SEPARATE ACTION FOR A TORRENS TITLE UNDER THE
LAW IS ENDOWED WITH INCONTESTABILITY UNTIL IT HAS BEEN SET ASIDE IN THE
MANNER INDICATED IN THE LAW ITSELF.14
As regards his first and second assignments of error, Sebastian contends that Joseph and Teresa failed to
establish by competent evidence that they are the legitimate heirs of their father Jose, and thus of their
grandfather Joaquin. He draws attention to the certificate of title (TCT No. 8026) they submitted, stating that
the wife of their father Jose is Presentacion Garcia, while they claim that their mother is Priscilla. He avers
that the marriage contracts proffered by Joseph and Teresa do not qualify as the best evidence of Jose’s
marriage with Priscilla, inasmuch as they were not authenticated and formally offered in evidence. Sebastian
also asseverates that he actually questioned the legitimacy of Joseph and Teresa as heirs of Joaquin in his
motion to exclude them as heirs, and in his reply to their opposition to the said motion. He further claims
that the failure of Abelardo Dagoro and Walter de Santos to oppose his motion to exclude them as heirs had
the effect of admitting the allegations therein. He points out that his motion was denied by the RTC without
a hearing.
With respect to his third assigned error, Sebastian maintains that the certificates of title of real estate
properties subject of the controversy are in the name of Joaquin Agtarap, married to Caridad Garcia, and as
such are conclusive proof of their ownership thereof, and thus, they are not subject to collateral attack, but
should be threshed out in a separate proceeding for that purpose. He likewise argues that estoppel applies
against the children of the first marriage, since none of them registered any objection to the issuance of the
TCTs in the name of Caridad and Joaquin only. He avers that the estate must have already been settled in
light of the payment of the estate and inheritance tax by Milagros, Joseph, and Teresa, resulting to the
issuance of TCT No. 8925 in Milagros’ name and of TCT No. 8026 in the names of Milagros and Jose. He
also alleges that res judicata is applicable as the court order directing the deletion of the name of Lucia, and
replacing it with the name of Caridad, in the TCTs had long become final and executory.
In his own petition, with respect to his first assignment of error, Eduardo alleges that the CA erroneously
settled, together with the settlement of the estate of Joaquin, the estates of Lucia, Jesus, Jose, Mercedes,
Gloria, and Milagros, in contravention of the principle of settling only one estate in one proceeding. He
particularly questions the distribution of the estate of Milagros in the intestate proceedings despite the fact
that a proceeding was conducted in another court for the probate of the will of Milagros, bequeathing all to
Eduardo whatever share that she would receive from Joaquin’s estate. He states that this violated the rule on
precedence of testate over intestate proceedings.
Anent his second assignment of error, Eduardo contends that the CA gravely erred when it affirmed that the
bulk of the realties subject of this case belong to the first marriage of Joaquin to Lucia, notwithstanding that
the certificates of title were registered in the name of Joaquin Agtarap casado con ("married to") Caridad
Garcia. According to him, the RTC, acting as an intestate court with limited jurisdiction, was not vested with
the power and authority to determine questions of ownership, which properly belongs to another court with
general jurisdiction.
The Court’s Ruling
As to Sebastian’s and Eduardo’s common issue on the ownership of the subject real properties, we hold that
the RTC, as an intestate court, had jurisdiction to resolve the same.
The general rule is that the jurisdiction of the trial court, either as a probate or an intestate court, relates only
to matters having to do with the probate of the will and/or settlement of the estate of deceased persons, but
does not extend to the determination of questions of ownership that arise during the proceedings. 15 The
patent rationale for this rule is that such court merely exercises special and limited jurisdiction.16 As held in
several cases,17 a probate court or one in charge of estate proceedings, whether testate or intestate, cannot
adjudicate or determine title to properties claimed to be a part of the estate and which are claimed to belong
to outside parties, not by virtue of any right of inheritance from the deceased but by title adverse to that of
the deceased and his estate. All that the said court could do as regards said properties is to determine
whether or not they should be included in the inventory of properties to be administered by the
administrator. If there is no dispute, there poses no problem, but if there is, then the parties, the
administrator, and the opposing parties have to resort to an ordinary action before a court exercising general
jurisdiction for a final determination of the conflicting claims of title.
However, this general rule is subject to exceptions as justified by expediency and convenience.
First, the probate court may provisionally pass upon in an intestate or a testate proceeding the question of
inclusion in, or exclusion from, the inventory of a piece of property without prejudice to the final
determination of ownership in a separate action.18 Second, if the interested parties are all heirs to the estate,
or the question is one of collation or advancement, or the parties consent to the assumption of jurisdiction by
the probate court and the rights of third parties are not impaired, then the probate court is competent to
resolve issues on ownership.19 Verily, its jurisdiction extends to matters incidental or collateral to the
settlement and distribution of the estate, such as the determination of the status of each heir and whether the
property in the inventory is conjugal or exclusive property of the deceased spouse. 20
We hold that the general rule does not apply to the instant case considering that the parties are all heirs of
Joaquin and that no rights of third parties will be impaired by the resolution of the ownership issue. More
importantly, the determination of whether the subject properties are conjugal is but collateral to the probate
court’s jurisdiction to settle the estate of Joaquin.1auuphi1
It should be remembered that when Eduardo filed his verified petition for judicial settlement of Joaquin’s
estate, he alleged that the subject properties were owned by Joaquin and Caridad since the TCTs state that
the lots were registered in the name of Joaquin Agtarap, married to Caridad Garcia. He also admitted in his
petition that Joaquin, prior to contracting marriage with Caridad, contracted a first marriage with Lucia.
Oppositors to the petition, Joseph and Teresa, however, were able to present proof before the RTC that TCT
534
Nos. 38254 and 38255 were derived from a mother title, TCT No. 5239, dated March 17, 1920, in the name
of FRANCISCO VICTOR BARNES Y JOAQUIN AGTARAP, el primero casado con Emilia Muscat, y el
Segundo con Lucia Garcia Mendietta (FRANCISCO VICTOR BARNES y JOAQUIN AGTARAP, the first
married to Emilia Muscat, and the second married to Lucia Garcia Mendietta). 21 When TCT No. 5239 was
divided between Francisco Barnes and Joaquin Agtarap, TCT No. 10864, in the name of Joaquin Agtarap,
married to Lucia Garcia Mendietta, was issued for a parcel of land, identified as Lot No. 745 of the
Cadastral Survey of Pasay, Cadastral Case No. 23, G.L.R.O. Cadastral Record No. 1368, consisting of 8,872
square meters. This same lot was covered by TCT No. 5577 (32184) 22 issued on April 23, 1937, also in the
name of Joaquin Agtarap, married to Lucia Garcia Mendietta.
The findings of the RTC and the CA show that Lucia died on April 24, 1924, and subsequently, on February
9, 1926, Joaquin married Caridad. It is worthy to note that TCT No. 5577 (32184) contained an annotation,
which reads—
Ap-4966 – NOTA: Se ha enmendado el presente certificado de titulo, tal como aparece, tanchando las
palabras "con Lucia Garcia Mendiet[t]a" y poniendo en su lugar, entre lineas y en tinta encarnada, las
palabras "en segundas nupcias con Caridad Garcia", en complimiento de un orden de fecha 28 de abril de
1937, dictada por el Hon. Sixto de la Costa, juez del Juzgado de Primera Instancia de Rizal, en el expediente
cadastal No. 23, G.L.R.O. Cad. Record No. 1368; copia de cual orden has sido presentada con el No. 4966
del Libro Diario, Tomo 6.0 y, archivada en el Legajo T-No. 32184.
Pasig, Rizal, a 29 abril de 1937.23
Thus, per the order dated April 28, 1937 of Hon. Sixto de la Costa, presiding judge of the Court of First
Instance of Rizal, the phrase con Lucia Garcia Mendiet[t]a was crossed out and replaced by en segundas
nuptias con Caridad Garcia, referring to the second marriage of Joaquin to Caridad. It cannot be gainsaid,
therefore, that prior to the replacement of Caridad’s name in TCT No. 32184, Lucia, upon her demise,
already left, as her estate, one-half (1/2) conjugal share in TCT No. 32184. Lucia’s share in the property
covered by the said TCT was carried over to the properties covered by the certificates of title derivative of
TCT No. 32184, now TCT Nos. 38254 and 38255. And as found by both the RTC and the CA, Lucia was
survived by her compulsory heirs – Joaquin, Jesus, Milagros, and Jose.
Section 2, Rule 73 of the Rules of Court provides that when the marriage is dissolved by the death of the
husband or the wife, the community property shall be inventoried, administered, and liquidated, and the
debts thereof paid; in the testate or intestate proceedings of the deceased spouse, and if both spouses have
died, the conjugal partnership shall be liquidated in the testate or intestate proceedings of either. Thus, the
RTC had jurisdiction to determine whether the properties are conjugal as it had to liquidate the conjugal
partnership to determine the estate of the decedent. In fact, should Joseph and Teresa institute a settlement
proceeding for the intestate estate of Lucia, the same should be consolidated with the settlement proceedings
of Joaquin, being Lucia’s spouse.24 Accordingly, the CA correctly distributed the estate of Lucia, with
respect to the properties covered by TCT Nos. 38254 and 38255 subject of this case, to her compulsory
heirs.
Therefore, in light of the foregoing evidence, as correctly found by the RTC and the CA, the claim of
Sebastian and Eduardo that TCT Nos. 38254 and 38255 conclusively show that the owners of the properties
covered therein were Joaquin and Caridad by virtue of the registration in the name of Joaquin Agtarap
casado con (married to) Caridad Garcia, deserves scant consideration. This cannot be said to be a collateral
attack on the said TCTs. Indeed, simple possession of a certificate of title is not necessarily conclusive of a
holder’s true ownership of property.25 A certificate of title under the Torrens system aims to protect
dominion; it cannot be used as an instrument for the deprivation of ownership. 26 Thus, the fact that the
properties were registered in the name of Joaquin Agtarap, married to Caridad Garcia, is not sufficient proof
that the properties were acquired during the spouses’ coverture. 27The phrase "married to Caridad Garcia" in
the TCTs is merely descriptive of the civil status of Joaquin as the registered owner, and does not
necessarily prove that the realties are their conjugal properties.28
Neither can Sebastian’s claim that Joaquin’s estate could have already been settled in 1965 after the of Lucia, Jesus, Jose, Mercedes, and Gloria in the distribution of the shares was merely a necessary
payment of the inheritance tax be upheld. Payment of the inheritance tax, per se, does not settle the estate of consequence of the settlement of Joaquin’s estate, they being his legal heirs.
a deceased person. As provided in Section 1, Rule 90 of the Rules of Court— However, we agree with Eduardo’s position that the CA erred in distributing Joaquin’s estate pertinent to the
SECTION 1. When order for distribution of residue made. -- When the debts, funeral charges, and expenses share allotted in favor of Milagros. Eduardo was able to show that a separate proceeding was instituted for
of administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in the probate of the will allegedly executed by Milagros before the RTC, Branch 108, Pasay City. 34 While
accordance with law, have been paid, the court, on the application of the executor or administrator, or of a there has been no showing that the alleged will of Milagros, bequeathing all of her share from Joaquin’s
person interested in the estate, and after hearing upon notice, shall assign the residue of the estate to the estate in favor of Eduardo, has already been probated and approved, prudence dictates that this Court refrain
persons entitled to the same, naming them and the proportions, or parts, to which each is entitled, and such from distributing Milagros’ share in Joaquin’s estate.
persons may demand and recover their respective shares from the executor or administrator, or any other It is also worthy to mention that Sebastian died on January 15, 2010, per his Certificate of Death. 35 He is
person having the same in his possession. If there is a controversy before the court as to who are the lawful survived by his wife Teresita B. Agtarap (Teresita) and his children Joaquin Julian B. Agtarap (Joaquin
heirs of the deceased person or as to the distributive share to which each person is entitled under the law, the Julian) and Ana Ma. Agtarap Panlilio (Ana Ma.).
controversy shall be heard and decided as in ordinary cases. Henceforth, in light of the foregoing, the assailed November 21, 2006 Decision and the March 27, 2007
No distribution shall be allowed until the payment of the obligations above mentioned has been made or Resolution of the CA should be affirmed with modifications such that the share of Milagros shall not yet be
provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, distributed until after the final determination of the probate of her purported will, and that Sebastian shall be
conditioned for the payment of said obligations within such time as the court directs. represented by his compulsory heirs.
Thus, an estate is settled and distributed among the heirs only after the payment of the debts of the estate, WHEREFORE, the petition in G.R. No. 177192 is DENIED for lack of merit, while the petition in G.R. No.
funeral charges, expenses of administration, allowance to the widow, and inheritance tax. The records of 177099 is PARTIALLY GRANTED, such that the Decision dated November 21, 2006 and the Resolution
these cases do not show that these were complied with in 1965. dated March 27, 2007 of the Court of Appeals are AFFIRMED with the following MODIFICATIONS: that
As regards the issue raised by Sebastian on the legitimacy of Joseph and Teresa, suffice it to say that both the share awarded in favor of Milagros Agtarap shall not be distributed until the final determination of the
the RTC and the CA found them to be the legitimate children of Jose. The RTC found that Sebastian did not probate of her will, and that petitioner Sebastian G. Agtarap, in view of his demise on January 15, 2010,
present clear and convincing evidence to support his averments in his motion to exclude them as heirs of shall be represented by his wife Teresita B. Agtarap and his children Joaquin Julian B. Agtarap and Ana Ma.
Joaquin, aside from his negative allegations. The RTC also noted the fact of Joseph and Teresa being the Agtarap Panlilio.
children of Jose was never questioned by Sebastian and Eduardo, and the latter two even admitted this in These cases are hereby remanded to the Regional Trial Court, Branch 114, Pasay City, for further
their petitions, as well as in the stipulation of facts in the August 21, 1995 hearing. 29 Furthermore, the CA proceedings in the settlement of the estate of Joaquin Agtarap. No pronouncement as to costs.
affirmed this finding of fact in its November 21, 2006 Decision. 30 SO ORDERED.
Also, Sebastian’s insistence that Abelardo Dagoro and Walter de Santos are not heirs to the estate of Joaquin
cannot be sustained. Per its October 23, 2000 Order of Partition, the RTC found that Gloria Agtarap de
Santos died on May 4, 1995, and was later substituted in the proceedings below by her husband Walter de
Santos. Gloria begot a daughter with Walter de Santos, Georgina Samantha de Santos. The RTC likewise
noted that, on September 16, 1995, Abelardo Dagoro filed a motion for leave of court to intervene, alleging
that he is the surviving spouse of Mercedes Agtarap and the father of Cecilia Agtarap Dagoro, and his
answer in intervention. The RTC later granted the motion, thereby admitting his answer on October 18,
1995.31 The CA also noted that, during the hearing of the motion to intervene on October 18, 1995,
Sebastian and Eduardo did not interpose any objection when the intervention was submitted to the RTC for
resolution.32
Indeed, this Court is not a trier of facts, and there appears no compelling reason to hold that both courts
erred in ruling that Joseph, Teresa, Walter de Santos, and Abelardo Dagoro rightfully participated in the
estate of Joaquin. It was incumbent upon Sebastian to present competent evidence to refute his and
Eduardo’s admissions that Joseph and Teresa were heirs of Jose, and thus rightful heirs of Joaquin, and to
timely object to the participation of Walter de Santos and Abelardo Dagoro. Unfortunately, Sebastian failed
to do so. Nevertheless, Walter de Santos and Abelardo Dagoro had the right to participate in the estate in
representation of the Joaquin’s compulsory heirs, Gloria and Mercedes, respectively. 33
This Court also differs from Eduardo’s asseveration that the CA erred in settling, together with Joaquin’s
estate, the respective estates of Lucia, Jesus, Jose, Mercedes, and Gloria. A perusal of the November 21,
2006 CA Decision would readily show that the disposition of the properties related only to the settlement of
the estate of Joaquin. Pursuant to Section 1, Rule 90 of the Rules of Court, as cited above, the RTC was
specifically granted jurisdiction to determine who are the lawful heirs of Joaquin, as well as their respective
shares after the payment of the obligations of the estate, as enumerated in the said provision. The inclusion

535
 SECOND SPECIAL DIVISION
G.R. No. 183053 October 10, 2012
EMILIO A.M. SUNTAY III, Petitioner,
vs.
ISABEL COJUANGCO-SUNTAY, Respondent.
RESOLUTION
PEREZ, J.:
The now overly prolonged, all-too familiar and too-much-stretched imbroglio over the estate of Cristina
Aguinaldo-Suntay has continued. We issued a Decision in the dispute as in Inter Caetera.1 We now find a
need to replace the decision.
Before us is a Motion for Reconsideration filed by respondent Isabel Cojuangco-Suntay (respondent Isabel)
of our Decision2 in G.R. No. 183053 dated 16 June 2010, directing the issuance of joint letters of
administration to both petitioner Emilio A.M. Suntay III (Emilio III) and respondent. The dispositive portion
thereof reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No.
74949 is REVERSED and SET ASIDE. Letters of Administration over the estate of decedent Cristina
Aguinaldo-Suntay shall issue to both petitioner Emilio A.M. Suntay III and respondent Isabel Cojuangco-
Suntay upon payment by each of a bond to be set by the Regional Trial Court, Branch 78, Malolos, Bulacan,
in Special Proceeding Case No. 117-M-95. The Regional Trial Court, Branch 78, Malolos, Bulacan is
likewise directed to make a determination and to declare the heirs of decedent Cristina Aguinaldo-Suntay
according to the actual factual milieu as proven by the parties, and all other persons with legal interest in the
subject estate. It is further directed to settle the estate of decedent Cristina Aguinaldo-Suntay with dispatch.
No costs.3
We are moved to trace to its roots the controversy between the parties.
The decedent Cristina Aguinaldo-Suntay (Cristina) died intestate on 4 June 1990. Cristina was survived by
her spouse, Dr. Federico Suntay (Federico) and five grandchildren: three legitimate grandchildren, including
herein respondent, Isabel; and two illegitimate grandchildren, including petitioner Emilio III, all by
Federico’s and Cristina’s only child, Emilio A. Suntay (Emilio I), who predeceased his parents.
The illegitimate grandchildren, Emilio III and Nenita, were both reared from infancy by the spouses
Federico and Cristina. Their legitimate grandchildren, Isabel and her siblings, Margarita and Emilio II, lived
with their mother Isabel Cojuangco, following the separation of Isabel’s parents, Emilio I and Isabel
Cojuangco. Isabel’s parents, along with her paternal grandparents, were involved in domestic relations
cases, including a case for parricide filed by Isabel Cojuangco against Emilio I. Emilio I was eventually
acquitted.
In retaliation, Emilio I filed a complaint for legal separation against his wife, charging her among others
with infidelity. The trial court declared as null and void and of no effect the marriage of Emilio I and Isabel
Cojuangco on the finding that:
From February 1965 thru December 1965 plaintiff was confined in the Veterans memorial Hospital.
Although at the time of the trial of parricide case (September 8, 1967) the patient was already out of the
hospital, he continued to be under observation and treatment.
It is the opinion of Dr. Aramil that the symptoms of the plaintiffs mental aberration classified as
schizophernia (sic) had made themselves manifest even as early as 1955; that the disease worsened with
time, until 1965 when he was actually placed under expert neuro-psychiatrist (sic) treatment; that even if the
subject has shown marked progress, the remains bereft of adequate understanding of right and wrong.
There is no controversy that the marriage between the parties was effected on July 9, 1958, years after
plaintiffs mental illness had set in. This fact would justify a declaration of nullity of the marriage under
Article 85 of the Civil Code which provides:
Art. 95. (sic) A marriage may be annulled for any of the following causes after (sic) existing at the time of
the marriage:
536
xxxx
(3) That either party was of unsound mind, unless such party, after coming to reason, freely cohabited with
the other as husband or wife.
There is a dearth of proof at the time of the marriage defendant knew about the mental condition of plaintiff;
and there is proof that plaintiff continues to be without sound reason. The charges in this very complaint add
emphasis to the findings of the neuro-psychiatrist handling the patient, that plaintiff really lives more in
fancy than in reality, a strong indication of schizophernia (sic).4
Intent on maintaining a relationship with their grandchildren, Federico and Isabel filed a complaint for
visitation rights to spend time with Margarita, Emilio II, and Isabel in the same special lower court. The
Juvenile Domestic Relations Court in Quezon City (JDRC-QC) granted their prayer for one hour a month of
visitation rights which was subsequently reduced to thirty minutes, and ultimately stopped, because of
respondent Isabel’s testimony in court that her grandparents’ visits caused her and her siblings stress and
anxiety.5
On 27 September 1993, more than three years after Cristina’s death, Federico adopted his illegitimate
grandchildren, Emilio III and Nenita.
On 26 October 1995, respondent Isabel, filed before the Regional Trial Court (RTC), Malolos, Bulacan, a
petition for the issuance of letters of administration over Cristina’s estate docketed as Special Proceeding
Case No. 117-M-95. Federico, opposed the petition, pointing out that: (1) as the surviving spouse of the
decedent, he should be appointed administrator of the decedent’s estate; (2) as part owner of the mass of
conjugal properties left by the decedent, he must be accorded preference in the administration thereof; (3)
Isabel and her siblings had been alienated from their grandparents for more than thirty (30) years; (4) the
enumeration of heirs in the petition was incomplete as it did not mention the other children of his son,
Emilio III and Nenita; (5) even before the death of his wife, Federico had administered their conjugal
properties, and thus, is better situated to protect the integrity of the decedent’s estate; (6) the probable value
of the estate as stated in the petition was grossly overstated; and (7) Isabel’s allegation that some of the
properties are in the hands of usurpers is untrue.
Federico filed a Motion to Dismiss Isabel’s petition for letters of administration on the ground that Isabel
had no right of representation to the estate of Cristina, she being an illegitimate grandchild of the latter as a
result of Isabel’s parents’ marriage being declared null and void. However, in Suntay v. Cojuangco-Suntay,
we categorically declared that Isabel and her siblings, having been born of a voidable marriage as opposed
to a void marriage based on paragraph 3, Article 85 of the Civil Code, were legitimate children of Emilio I,
who can all represent him in the estate of their legitimate grandmother, the decedent, Cristina.
Undaunted by the set back, Federico nominated Emilio III to administer the decedent’s estate on his behalf
in the event letters of administration issues to Federico. Consequently, Emilio III filed an Opposition-In-
Intervention, echoing the allegations in his grandfather’s opposition, alleging that Federico, or in his stead,
Emilio III, was better equipped than respondent to administer and manage the estate of the decedent,
Cristina.
On 13 November 2000, Federico died.
Almost a year thereafter or on 9 November 2001, the trial court rendered a decision appointing Emilio III as
administrator of decedent Cristina’s intestate estate:
WHEREFORE, the petition of Isabel Cojuangco-Suntay is DENIED and the Opposition-in-Intervention is
GRANTED.
Accordingly, the Intervenor, Emilio A.M. Suntay, III (sic) is hereby appointed administrator of the estate of
the decedent Cristina Aguinaldo Suntay, who shall enter upon the execution of his trust upon the filing of a
bond in the amount of ₱ 200,000.00, conditioned as follows:
(1) To make and return within three (3) months, a true and complete inventory;
(2) To administer the estate and to pay and discharge all debts, legatees, and charge on the same, or
dividends thereon;
(3) To render a true and just account within one (1) year, and at any other time when required by the court,
and
(4) To perform all orders of the Court.
Once the said bond is approved by the court, let Letters of Administration be issued in his favor. 6
On appeal, the Court of Appeals reversed and set aside the decision of the RTC, revoked the Letters of
Administration issued to Emilio III, and appointed respondent as administratrix of the subject estate:
WHEREFORE, in view of all the foregoing, the assailed decision dated November 9, 2001 of Branch 78,
Regional Trial Court of Malolos, Bulacan in SPC No. 117-M-95 is REVERSED and SET ASIDE and the
letters of administration issued by the said court to Emilio A.M. Suntay III, if any, are consequently
revoked. Petitioner Isabel Cojuangco-Suntay is hereby appointed administratrix of the intestate estate of
Cristina Aguinaldo Suntay. Let letters of administration be issued in her favor upon her filing of a bond in
the amount of Two Hundred Thousand (₱ 200,000.00) Pesos. 7
As previously adverted to, on appeal by certiorari, we reversed and set aside the ruling of the appellate court.
We decided to include Emilio III as co-administrator of Cristina’s estate, giving weight to his interest in
Federico’s estate. In ruling for co-administration between Emilio III and
Isabel, we considered that:
1. Emilio III was reared from infancy by the decedent, Cristina, and her husband, Federico, who
both acknowledged him as their grandchild;
2. Federico claimed half of the properties included in the estate of the decedent, Cristina, as
forming part of their conjugal partnership of gains during the subsistence of their marriage;
3. Cristina’s properties, forming part of her estate, are still commingled with those of her husband,
Federico, because her share in the conjugal partnership remains undetermined and unliquidated;
and
4. Emilio III is a legally adopted child of Federico, entitled to share in the distribution of the
latter’s estate as a direct heir, one degree from Federico, and not simply in representation of his
deceased illegitimate father, Emilio I.
In this motion, Isabel pleads for total affirmance of the Court of Appeals’ Decision in favor of her sole
administratorship based on her status as a legitimate grandchild of Cristina, whose estate she seeks to
administer.
Isabel contends that the explicit provisions of Section 6, Rule 78 of the Rules of Court on the order of
preference for the issuance of letters of administration cannot be ignored and that Article 992 of the Civil
Code must be followed. Isabel further asserts that Emilio III had demonstrated adverse interests and
disloyalty to the estate, thus, he does not deserve to become a co-administrator thereof.
Specifically, Isabel bewails that: (1) Emilio III is an illegitimate grandchild and therefore, not an heir of the
decedent; (2) corollary thereto, Emilio III, not being a "next of kin" of the decedent, has no interest in the
estate to justify his appointment as administrator thereof; (3) Emilio III’s actuations since his appointment as
administrator by the RTC on 9 November 2001 emphatically demonstrate the validity and wisdom of the
order of preference in Section 6, Rule 78 of the Rules of Court; and (4) there is no basis for joint
administration as there are no "opposing parties or factions to be represented."
To begin with, the case at bar reached us on the issue of who, as between Emilio III and Isabel, is better
qualified to act as administrator of the decedent’s estate. We did not choose. Considering merely his
demonstrable interest in the subject estate, we ruled that Emilio III should likewise administer the estate of
his illegitimate grandmother, Cristina, as a co-administrator. In the context of this case, we have to make a
choice and therefore, reconsider our decision of 16 June 2010.
The general rule in the appointment of administrator of the estate of a decedent is laid down in Section 6,
Rule 78 of the Rules of Court:
SEC. 6. When and to whom letters of administration granted. – If no executor is named in the will, or the
executor or executors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate,
administration shall be granted:
537
(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion of the
court, or to such person as such surviving husband or wife, or next of kin, requests to have appointed, if
competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by them, be
incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty (30) days after the
death of the person to apply for administration or to request that administration be granted to some other
person, it may be granted to one or more of the principal creditors, if competent and willing to serve;
(c) If there is not such creditor competent and willing to serve, it may be granted to such other person as the
court may select.
Textually, the rule lists a sequence to be observed, an order of preference, in the appointment of an
administrator. This order of preference, which categorically seeks out the surviving spouse, the next of kin
and the creditors in the appointment of an administrator, has been reinforced in jurisprudence. 8
The paramount consideration in the appointment of an administrator over the estate of a decedent is the
prospective administrator’s interest in the estate.9 This is the same consideration which Section 6, Rule 78
takes into account in establishing the order of preference in the appointment of administrator for the estate.
The rationale behind the rule is that those who will reap the benefit of a wise, speedy and economical
administration of the estate, or, in the alternative, suffer the consequences of waste, improvidence or
mismanagement, have the highest interest and most influential motive to administer the estate correctly.10 In
all, given that the rule speaks of an order of preference, the person to be appointed administrator of a
decedent’s estate must demonstrate not only an interest in the estate, but an interest therein greater than any
other candidate.
To illustrate, the preference bestowed by law to the surviving spouse in the administration of a decedent’s
estate presupposes the surviving spouse’s interest in the conjugal partnership or community property
forming part of the decedent’s estate.11 Likewise, a surviving spouse is a compulsory heir of a
decedent12 which evinces as much, if not more, interest in administering the entire estate of a decedent, aside
from her share in the conjugal partnership or absolute community property.
It is to this requirement of observation of the order of preference in the appointment of administrator of a
decedent’s estate, that the appointment of co-administrators has been allowed, but as an exception. We again
refer to Section 6(a) of Rule 78 of the Rules of Court which specifically states that letters of administration
may be issued to both the surviving spouse and the next of kin. In addition and impliedly, we can refer to
Section 2 of Rule 82 of the Rules of Court which say that "x x x when an executor or administrator dies,
resigns, or is removed, the remaining executor or administrator may administer the trust alone, x x x."
In a number of cases, we have sanctioned the appointment of more than one administrator for the benefit of
the estate and those interested therein.13 We recognized that the appointment of administrator of the estate of
a decedent or the determination of a person’s suitability for the office of judicial administrator rests, to a
great extent, in the sound judgment of the court exercising the power of appointment. 14
Under certain circumstances and for various reasons well-settled in Philippine and American jurisprudence,
we have upheld the appointment of co-administrators: (1) to have the benefits of their judgment and perhaps
at all times to have different interests represented;15 (2) where justice and equity demand that opposing
parties or factions be represented in the management of the estate of the deceased; (3) where the estate is
large or, from any cause, an intricate and perplexing one to settle; 16 (4) to have all interested persons
satisfied and the representatives to work in harmony for the best interests of the estate;17 and when a person
entitled to the administration of an estate desires to have another competent person associated with him in
the office.18
In the frequently cited Matias v. Gonzales, we dwelt on the appointment of special co-administrators during
the pendency of the appeal for the probate of the decedent’s will. Pending the probate thereof, we
recognized Matias’ special interest in the decedent’s estate as universal heir and executrix designated in the
instrument who should not be excluded in the administration thereof. Thus, we held that justice and equity
demands that the two (2) factions among the non-compulsory heirs of the decedent, consisting of an
instituted heir (Matias) and intestate heirs (respondents thereat), should be represented in the management of
the decedent’s estate.19
Another oft-cited case is Vda. de Dayrit v. Ramolete, where we held that "inasmuch as petitioner-wife owns
one-half of the conjugal properties and that she, too, is a compulsory heir of her husband, to deprive her of
any hand in the administration of the estate prior to the probate of the will would be unfair to her proprietary
interests."20
Hewing closely to the aforementioned cases is our ruling in Ventura v. Ventura 21 where we allowed the
appointment of the surviving spouse and legitimate children of the decedent as co-administrators. However,
we drew a distinction between the heirs categorized as next of kin, the nearest of kin in the category being
preferred, thus:
In the case at bar, the surviving spouse of the deceased Gregorio Ventura is Juana Cardona while the next of
kin are: Mercedes and Gregoria Ventura and Maria and Miguel Ventura. The "next of kin" has been defined
as those persons who are entitled under the statute of distribution to the decedent’s property (citations
omitted). It is generally said that "the nearest of kin, whose interest in the estate is more preponderant, is
preferred in the choice of administrator. ‘Among members of a class the strongest ground for preference is
the amount or preponderance of interest. As between next of kin, the nearest of kin is to be preferred.’"
(citations omitted)
As decided by the lower court and sustained by the Supreme Court, Mercedes and Gregoria Ventura are the
legitimate children of Gregorio Ventura and his wife, the late Paulina Simpliciano. Therefore, as the nearest
of kin of Gregorio Ventura, they are entitled to preference over the illegitimate children of Gregorio
Ventura, namely: Maria and Miguel Ventura. Hence, under the aforestated preference provided in Section 6
of Rule 78, the person or persons to be appointed administrator are Juana Cardona, as the surviving spouse,
or Mercedes and Gregoria Ventura as nearest of kin, or Juana Cardona and Mercedes and Gregoria Ventura
in the discretion of the Court, in order to represent both interests. 22 (Emphasis supplied)
In Silverio, Sr. v. Court of Appeals,23 we maintained that the order of preference in the appointment of an
administrator depends on the attendant facts and circumstances. In that case, we affirmed the legitimate
child’s appointment as special administrator, and eventually as regular administrator, of the decedent’s
estate as against the surviving spouse who the lower court found unsuitable. Reiterating Sioca v. Garcia 24 as
good law, we pointed out that unsuitableness for appointment as administrator may consist in adverse
interest of some kind or hostility to those immediately interested in the estate.
In Valarao v. Pascual,25 we see another story with a running theme of heirs squabbling over the estate of a
decedent. We found no reason to set aside the probate court’s refusal to appoint as special co-administrator
Diaz, even if he had a demonstrable interest in the estate of the decedent and represented one of the factions
of heirs, because the evidence weighed by the probate court pointed to Diaz’s being remiss in his previous
duty as co-administrator of the estatein the early part of his administration. Surveying the previously
discussed cases of Matias, Corona, and Vda. de Dayrit, we clarified, thus:
Respondents cannot take comfort in the cases of Matias v. Gonzales, Corona v. Court of Appeals, and Vda.
de Dayrit v. Ramolete, cited in the assailed Decision. Contrary to their claim, these cases do not establish an
absolute right demandable from the probate court to appoint special co-administrators who would represent
the respective interests of squabbling heirs. Rather, the cases constitute precedents for the authority of the
probate court to designate not just one but also two or more special co-administrators for a single estate.
Now whether the probate court exercises such prerogative when the heirs are fighting among themselves is a
matter left entirely to its sound discretion.
Furthermore, the cases of Matias, Corona and Vda. de Dayrit hinge upon factual circumstances other than
the incompatible interests of the heirs which are glaringly absent from the instant case. In Matias this Court
ordered the appointment of a special co-administrator because of the applicant's status as the universal heir
and executrix designated in the will, which we considered to be a "special interest" deserving protection
during the pendency of the appeal. Quite significantly, since the lower court in Matias had already deemed it
538
best to appoint more than one special administrator, we found grave abuse of discretion in the act of the
lower court in ignoring the applicant's distinctive status in the selection of another special administrator.
In Corona we gave "highest consideration" to the "executrix's choice of Special Administrator, considering
her own inability to serve and the wide latitude of discretion given her by the testatrix in her will," for this
Court to compel her appointment as special co-administrator. It is also manifest from the decision in Corona
that the presence of conflicting interests among the heirs therein was not per se the key factor in the
designation of a second special administrator as this fact was taken into account only to disregard or, in the
words of Corona, to "overshadow" the objections to the appointment on grounds of "impracticality and lack
of kinship."
Finally in Vda. de Dayrit we justified the designation of the wife of the decedent as special co-administrator
because it was "our considered opinion that inasmuch as petitioner-wife owns one-half of the conjugal
properties and that she, too, is a compulsory heir of her husband, to deprive her of any hand in the
administration of the estate prior to the probate of the will would be unfair to her proprietary interests." The
special status of a surviving spouse in the special administration of an estate was also emphasized in Fule v.
Court of Appeals where we held that the widow would have more interest than any other next of kin in the
proper administration of the entire estate since she possesses not only the right of succession over a portion
of the exclusive property of the decedent but also a share in the conjugal partnership for which the good or
bad administration of the estate may affect not just the fruits but more critically the naked ownership
thereof. And in Gabriel v. Court of Appeals we recognized the distinctive status of a surviving spouse
applying as regular administrator of the deceased spouse's estate when we counseled the probate court that
"there must be a very strong case to justify the exclusion of the widow from the administration."
Clearly, the selection of a special co-administrator in Matias, Corona and Vda. de Dayrit was based upon the
independent proprietary interests and moral circumstances of the appointee that were not necessarily related
to the demand for representation being repeatedly urged by respondents.26(Emphasis supplied)
In Gabriel v. Court of Appeals, we unequivocally declared the mandatory character of the rule on the order
of preference for the issuance of letters of administration:
Evidently, the foregoing provision of the Rules prescribes the order of preference in the issuance of letters of
administration, it categorically seeks out the surviving spouse, the next of kin and the creditors, and requires
that sequence to be observed in appointing an administrator. It would be a grave abuse of discretion for the
probate court to imperiously set aside and insouciantly ignore that directive without any valid and sufficient
reason therefor.27
Subsequently, in Angeles v. Angeles-Maglaya,28 we expounded on the legal contemplation of a "next of kin,"
thus:
Finally, it should be noted that on the matter of appointment of administrator of the estate of the deceased,
the surviving spouse is preferred over the next of kin of the decedent. When the law speaks of "next of kin,"
the reference is to those who are entitled, under the statute of distribution, to the decedent's property; one
whose relationship is such that he is entitled to share in the estate as distributed, or, in short, an heir. In
resolving, therefore, the issue of whether an applicant for letters of administration is a next of kin or an heir
of the decedent, the probate court perforce has to determine and pass upon the issue of filiation. A separate
action will only result in a multiplicity of suits. Upon this consideration, the trial court acted within bounds
when it looked into and passed upon the claimed relationship of respondent to the late Francisco Angeles. 29
Finally, in Uy v. Court of Appeals,30 we took into consideration the size of, and benefits to, the estate should
respondent therein be appointed as co-administrator. We emphasized that where the estate is large or, from
any cause, an intricate and perplexing one to settle, the appointment of co-administrators may be sanctioned
by law.
In our Decision under consideration, we zeroed in on Emilio III’s demonstrable interest in the estate and
glossed over the order of preference set forth in the Rules. We gave weight to Emilio III’s demonstrable
interest in Cristina’s estate and without a closer scrutiny of the attendant facts and circumstances, directed
co-administration thereof. We are led to a review of such position by the foregoing survey of cases.
The collected teaching is that mere demonstration of interest in the estate to be settled does not ipso facto
entitle an interested person to co-administration thereof. Neither does squabbling among the heirs nor
adverse interests necessitate the discounting of the order of preference set forth in Section 6, Rule 78.
Indeed, in the appointment of administrator of the estate of a deceased person, the principal consideration
reckoned with is the interest in said estate of the one to be appointed as administrator. 31 Given Isabel’s
unassailable interest in the estate as one of the decedent’s legitimate grandchildren and undoubted nearest
"next of kin," the appointment of Emilio III as co-administrator of the same estate, cannot be a demandable
right. It is a matter left entirely to the sound discretion of the Court 32 and depends on the facts and the
attendant circumstances of the case.33
Thus, we proceed to scrutinize the attendant facts and circumstances of this case even as we reiterate
Isabel’s and her sibling’s apparent greater interest in the estate of Cristina.
These considerations do not warrant the setting aside of the order of preference mapped out in Section 6,
Rule 78 of the Rules of Court. They compel that a choice be made of one over the other.
1. The bitter estrangement and long-standing animosity between Isabel, on the one hand, and
Emilio III, on the other, traced back from the time their paternal grandparents were alive, which
can be characterized as adverse interest of some kind by, or hostility of, Emilio III to Isabel who is
immediately interested in the estate;
2. Corollary thereto, the seeming impossibility of Isabel and Emilio III working harmoniously as
co-administrators may result in prejudice to the decedent’s estate, ultimately delaying settlement
thereof; and
3. Emilio III, for all his claims of knowledge in the management of Cristina’s estate, has not
looked after the estate’s welfare and has acted to the damage and prejudice thereof.
Contrary to the assumption made in the Decision that Emilio III’s demonstrable interest in the estate makes
him a suitable co-administrator thereof, the evidence reveals that Emilio III has turned out to be an
unsuitable administrator of the estate. Respondent Isabel points out that after Emilio III’s appointment as
administrator of the subject estate in 2001, he has not looked after the welfare of the subject estate and has
actually acted to the damage and prejudice thereof as evidenced by the following:
1. Emilio III, despite several orders from the probate court for a complete inventory, omitted in the
partial inventories34 he filed therewith properties of the estate35 including several parcels of land,
cash, bank deposits, jewelry, shares of stock, motor vehicles, and other personal properties,
contrary to Section 1,36paragraph a, Rule 81 of the Rules of Court.
2. Emilio III did not take action on both occasions against Federico’s settlement of the decedent’s
estate which adjudicated to himself a number of properties properly belonging to said estate
(whether wholly or partially), and which contained a declaration that the decedent did not leave
any descendants or heirs, except for Federico, entitled to succeed to her estate.37
In compliance to our Resolution dated 18 April 2012 requiring Emilio III to respond to the following
imputations of Isabel that:
1. Emilio III did not file an inventory of the assets until November 14, 2002;
2. The inventory Emilio III submitted did not include several properties of the decedent;
3. That properties belonging to the decedent have found their way to different individuals or persons; several
properties to Federico Suntay himself; and
4. While some properties have found their way to Emilio III, by reason of falsified documents; 38
Emilio III refutes Isabel’s imputations that he was lackadaisical in assuming and performing the functions of
administrator of Cristina’s estate:
1. From the time of the RTC’s Order appointing Emilio III as administrator, Isabel, in her
pleadings before the RTC, had vigorously opposed Emilio III’s assumption of that office, arguing
that "the decision of the RTC dated 9 November 2001 is not among the judgments authorized by
the Rules of Court which may be immediately implemented or executed;"
539
2. The delay in Emilio III’s filing of an inventory was due to Isabel’s vociferous objections to
Emilio III’s attempts to act as administrator while the RTC decision was under appeal to the Court
of Appeals;
3. The complained partial inventory is only initiatory, inherent in the nature thereof, and one of the
first steps in the lengthy process of settlement of a decedent’s estate, such that it cannot constitute a
complete and total listing of the decedent’s properties; and
4. The criminal cases adverted to are trumped-up charges where Isabel, as private complainant, has
been unwilling to appear and testify, leading the Judge of the Regional Trial Court, Branch 44 of
Mamburao, Occidental Mindoro, to warn the prosecutor of a possible motu propio dismissal of the
cases.
While we can subscribe to Emilio III’s counsel’s explanation for the blamed delay in the filing of an
inventory and his exposition on the nature thereof, partial as opposed to complete, in the course of the
settlement of a decedent’s estate, we do not find any clarification on Isabel’s accusation that Emilio III had
deliberately omitted properties in the inventory, which properties of Cristina he knew existed and which he
claims to be knowledgeable about.
The general denial made by Emilio III does not erase his unsuitability as administrator rooted in his failure
to "make and return x x x a true and complete inventory" which became proven fact when he actually filed
partial inventories before the probate court and by his inaction on two occasions of Federico’s exclusion of
Cristina’s other compulsory heirs, herein Isabel and her siblings, from the list of heirs.
As administrator, Emilio III enters into the office, posts a bond and executes an oath to faithfully discharge
the duties of settling the decedent’s estate with the end in view of distribution to the heirs, if any. This he
failed to do. The foregoing circumstances of Emilio III’s omission and inaction become even more
significant and speak volume of his unsuitability as administrator as it demonstrates his interest adverse to
those immediately interested in the estate of the decedent, Cristina.
In this case, palpable from the evidence on record, the pleadings, and the protracted litigation, is the
inescapable fact that Emilio III and respondent Isabel have a deep aversion for each other.1awp++i1 To our
mind, it becomes highly impractical, nay, improbable, for the two to work as co-administrators of their
grandmother’s estate. The allegations of Emilio III, the testimony of Federico and the other witnesses for
Federico and Emilio III that Isabel and her siblings were estranged from their grandparents further drive
home the point that Emilio III bears hostility towards Isabel. More importantly, it appears detrimental to the
decedent’s estate to appoint a co-administrator (Emilio III) who has shown an adverse interest of some kind
or hostility to those, such as herein respondent Isabel, immediately interested in the said estate.
Bearing in mind that the issuance of letters of administration is simply a preliminary order to facilitate the
settlement of a decedent’s estate, we here point out that Emilio III is not without remedies to protect his
interests in the estate of the decedent. In Hilado v. Court of Appeals, 39 we mapped out as among the
allowable participation of "any interested persons" or "any persons interested in the estate" in either testate
or intestate proceedings:
xxxx
4. Section 640 of Rule 87, which allows an individual interested in the estate of the deceased "to complain to
the court of the concealment, embezzlement, or conveyance of any asset of the decedent, or of evidence of
the decedent’s title or interest therein;"
5. Section 1041 of Rule 85, which requires notice of the time and place of the examination and allowance of
the Administrator’s account "to persons interested;"
6. Section 7(b)42 of Rule 89, which requires the court to give notice "to the persons interested" before it may
hear and grant a petition seeking the disposition or encumbrance of the properties of the estate; and
7. Section 1,43 Rule 90, which allows "any person interested in the estate" to petition for an order for the
distribution of the residue of the estate of the decedent, after all obligations are either satisfied or provided
for.44
In addition to the foregoing, Emilio III may likewise avail of the remedy found in Section 2, Rule 82 of the raffle by a new ponente who shall be chosen among the new Members of the Division who participated in
Rules of Court, to wit: the rendition of the decision or signed resolution and who concurred therein. If only one Member of the
Sec. 2. Court may remove or accept resignation of executor or administrator. Proceedings upon death, Court who participated and concurred in the rendition of the decision or signed resolution remains, he or she
resignation, or removal. – If an executor or administrator neglects to render his account and settle the estate shall be designated as the new ponente.
according to law, or to perform an order or judgment of the court, or a duty expressly provided by these If a Member (not the ponente) of the Division which rendered the decision or signed resolution has retired,
rules, or absconds, or becomes insane, or otherwise incapable or unsuitable to discharge the trust, the court is no longer a Member of the Court, is disqualified, or has inhibited himself or herself from acting on the
may remove him, or, in its discretion, may permit him to resign. When an executor or administrator dies, motion for reconsideration or clarification, he or she shall be replaced through raffle by a replacement
resigns, or is removed, the remaining executor or administrator may administer the trust alone, unless the Member who shall be chosen from the other Divisions until a new Justice is appointed as replacement for
court grants letters to someone to act with him. If there is no remaining executor or administrator, the retired Justice. Upon the appointment of a new Justice, he or she shall replace the designated Justice as
administration may be granted to any suitable person. replacement Member of the Special Division.
Once again, as we have done in the Decision, we exercise judicial restraint: we uphold that the question of Any vacancy or vacancies in the Special Division shall be filled by raffle from among the other Members of
who are the heirs of the decedent Cristina is not yet upon us. Article 992 of the Civil Code or the curtain bar the Court to constitute a Special Division of five (5) Members.
rule is inapplicable in resolving the issue of who is better qualified to administer the estate of the decedent. If the ponente and all the Members of the Division that rendered the Decision or signed Resolution are no
Thus, our disquisition in the assailed Decision: longer Members of the Court, the case shall be raffled to any Member of the Court and the motion shall be
Nonetheless, it must be pointed out that judicial restraint impels us to refrain from making a final declaration acted upon by him or her with the participation of the other Members of the Division to which he or she
of heirship and distributing the presumptive shares of the parties in the estates of Cristina and Federico, belongs.
considering that the question on who will administer the properties of the long deceased couple has yet to be If there are pleadings, motions or incidents subsequent to the denial of the motion for reconsideration or
settled. clarification, the case shall be acted upon by the ponente on record with the participation of the other
Our holding in Capistrano v. Nadurata on the same issue remains good law: Members of the Division to which he or she belongs at the time said pleading, motion or incident is to be
The declaration of heirs made by the lower court is premature, although the evidence sufficiently shows who taken up by the Court. (Emphasis supplied)
are entitled to succeed the deceased. The estate had hardly been judicially opened, and the proceeding has As regards the operation thereof in Baguio City, such is simply a change in venue for the Supreme Court's
not as yet reached the stage of distribution of the estate which must come after the inheritance is liquidated. summer session held last April.48
Section 1, Rule 90 of the Rules of Court does not depart from the foregoing admonition: WHEREFORE, the Motion for Reconsideration is PARTIALLY GRANTED. Our Decision in G.R. No.
Sec. 1. When order for distribution of residue is made. - x x x. If there is a controversy before the court as to 183053 dated 16 June 2010 is MODIFIED. Letters of Administration over the estate of decedent Cristina
who are the lawful heirs of the deceased person or as to the distributive shares to which each person is Aguinaldo-Suntay shall solely issue to respondent Isabel Cojuangco-Suntay upon payment of a bond to be
entitled under the law, the controversy shall be heard and decided as in ordinary cases. set by the Regional Trial Court, Branch 78, Malolos, Bulacan, in Special Proceeding Case No. 117-M-95.
No distribution shall be allowed until the payment of the obligations above mentioned has been made or The Regional Trial Court, Branch 78, Malolos, Bulacan is likewise directed to settle the estate of decedent
provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, Cristina Aguinaldo-Suntay with dispatch. No costs.
conditioned for the payment of said obligations within such time as the court directs. 45 SO ORDERED.
Lastly, we dispose of a peripheral issue raised in the Supplemental Comment 46 of Emilio III questioning the
Special Second Division which issued the 18 April 2012 Resolution. Emilio III asseverates that "the
operation of the Special Second Division in Baguio is unconstitutional and void" as the Second Division in
Manila had already promulgated its Decision on 16 June 2010 on the petition filed by him:
7. The question is: who created the Special Second Division in Baguio, acting separately from the Second
Division of the Supreme Court in Manila? There will then be two Second Divisions of the Supreme Court:
one acting with the Supreme Court in Manila, and another Special Second Division acting independently of
the Second Division of the Supreme Court in Manila.47
For Emilio III’s counsels’ edification, the Special Second Division in Baguio is not a different division
created by the Supreme Court.
The Second Division which promulgated its Decision on this case on 16 June 2010, penned by Justice
Antonio Eduardo B. Nachura, now has a different composition, with the advent of Justice Nachura’s
retirement on 13 June 2011. Section 7, Rule 2 of the Internal Rules of the Supreme Court provides:
Sec. 7. Resolutions of motions for reconsideration or clarification of decisions or signed resolutions and all
other motions and incidents subsequently filed; creation of a Special Division. – Motions for reconsideration
or clarification of a decision or of a signed resolution and all other motions and incidents subsequently filed
in the case shall be acted upon by the ponente and the other Members of the Division who participated in the
rendition of the decision or signed resolution.
If the ponente has retired, is no longer a Member of the Court, is disqualified, or has inhibited himself or
herself from acting on the motion for reconsideration or clarification, he or she shall be replaced through

540
 THIRD DIVISION
G.R. No. 146006 February 23, 2004
JOSE C. LEE AND ALMA AGGABAO, in their capacities as President and Corporate Secretary,
respectively, of Philippines International Life Insurance Company, and FILIPINO LOAN ASSISTANCE
GROUP, petitioners
vs.
REGIONAL TRIAL COURT OF QUEZON CITY BRANCH 85 presided by JUDGE PEDRO M.
AREOLA, BRANCH CLERK OF COURT JANICE Y. ANTERO, DEPUTY SHERIFFS ADENAUER G.
RIVERA and PEDRO L. BORJA, all of the Regional Trial Court of Quezon City Branch 85, MA. DIVINA
ENDERES claiming to be Special Administratrix, and other persons/ public officers acting for and in their
behalf, respondents.
DECISION
CORONA, J.:
This is a petition for review under Rule 45 of the Rules of Court seeking to reverse and set aside the
decision1 of the Court of Appeals, First Division, dated July 26, 2000, in CA G.R. 59736, which dismissed
the petition for certiorari filed by petitioners Jose C. Lee and Alma Aggabao (in their capacities as president
and secretary, respectively, of Philippine International Life Insurance Company) and Filipino Loan
Assistance Group.
The antecedent facts follow.
Dr. Juvencio P. Ortañez incorporated the Philippine International Life Insurance Company, Inc. on July 6,
1956. At the time of the company’s incorporation, Dr. Ortañez owned ninety percent (90%) of the
subscribed capital stock.
On July 21, 1980, Dr. Ortañez died. He left behind a wife (Juliana Salgado Ortañez), three legitimate
children (Rafael, Jose and Antonio Ortañez) and five illegitimate children by Ligaya Novicio (herein private
respondent Ma. Divina Ortañez-Enderes and her siblings Jose, Romeo, Enrico Manuel and Cesar, all
surnamed Ortañez).2
On September 24, 1980, Rafael Ortañez filed before the Court of First Instance of Rizal, Quezon City
Branch (now Regional Trial Court of Quezon City) a petition for letters of administration of the intestate
estate of Dr. Ortañez, docketed as SP Proc. Q-30884 (which petition to date remains pending at Branch 85
thereof).
Private respondent Ma. Divina Ortañez-Enderes and her siblings filed an opposition to the petition for letters
of administration and, in a subsequent urgent motion, prayed that the intestate court appoint a special
administrator.
On March 10, 1982, Judge Ernani Cruz Paño, then presiding judge of Branch 85, appointed Rafael and Jose
Ortañez joint special administrators of their father’s estate. Hearings continued for the appointment of a
regular administrator (up to now no regular administrator has been appointed).
As ordered by the intestate court, special administrators Rafael and Jose Ortañez submitted an inventory of
the estate of their father which included, among other properties, 2,029 3 shares of stock in Philippine
International Life Insurance Company (hereafter Philinterlife), representing 50.725% of the company’s
outstanding capital stock.
On April 15, 1989, the decedent’s wife, Juliana S. Ortañez, claiming that she owned 1,0144 Philinterlife
shares of stock as her conjugal share in the estate, sold said shares with right to repurchase in favor of herein
petitioner Filipino Loan Assistance Group (FLAG), represented by its president, herein petitioner Jose C.
Lee. Juliana Ortañez failed to repurchase the shares of stock within the stipulated period, thus ownership
thereof was consolidated by petitioner FLAG in its name.
On October 30, 1991, Special Administrator Jose Ortañez, acting in his personal capacity and claiming that
he owned the remaining 1,0115 Philinterlife shares of stocks as his inheritance share in the estate, sold said
shares with right to repurchase also in favor of herein petitioner FLAG, represented by its president, herein
541
petitioner Jose C. Lee. After one year, petitioner FLAG consolidated in its name the ownership of the
Philinterlife shares of stock when Jose Ortañez failed to repurchase the same.
It appears that several years before (but already during the pendency of the intestate proceedings at the
Regional Trial Court of Quezon City, Branch 85), Juliana Ortañez and her two children, Special
Administrators Rafael and Jose Ortañez, entered into a memorandum of agreement dated March 4, 1982 for
the extrajudicial settlement of the estate of Dr. Juvencio Ortañez, partitioning the estate (including the
Philinterlife shares of stock) among themselves. This was the basis of the number of shares separately sold
by Juliana Ortañez on April 15, 1989 (1,014 shares) and by Jose Ortañez on October 30, 1991 (1,011 shares)
in favor of herein petitioner FLAG.
On July 12, 1995, herein private respondent Ma. Divina Ortañez–Enderes and her siblings (hereafter
referred to as private respondents Enderes et al.) filed a motion for appointment of special administrator of
Philinterlife shares of stock. This move was opposed by Special Administrator Jose Ortañez.
On November 8, 1995, the intestate court granted the motion of private respondents Enderes et al. and
appointed private respondent Enderes special administratrix of the Philinterlife shares of stock.
On December 20, 1995, Special Administratrix Enderes filed an urgent motion to declare void ab initio the
memorandum of agreement dated March 4, 1982. On January 9, 1996, she filed a motion to declare the
partial nullity of the extrajudicial settlement of the decedent’s estate. These motions were opposed by
Special Administrator Jose Ortañez.
On March 22, 1996, Special Administratrix Enderes filed an urgent motion to declare void ab initio the
deeds of sale of Philinterlife shares of stock, which move was again opposed by Special Administrator Jose
Ortañez.
On February 4, 1997, Jose Ortañez filed an omnibus motion for (1) the approval of the deeds of sale of the
Philinterlife shares of stock and (2) the release of Ma. Divina Ortañez-Enderes as special administratrix of
the Philinterlife shares of stock on the ground that there were no longer any shares of stock for her to
administer.
On August 11, 1997, the intestate court denied the omnibus motion of Special Administrator Jose Ortañez
for the approval of the deeds of sale for the reason that:
Under the Godoy case, supra, it was held in substance that a sale of a property of the estate without an Order
of the probate court is void and passes no title to the purchaser. Since the sales in question were entered into
by Juliana S. Ortañez and Jose S. Ortañez in their personal capacity without prior approval of the Court, the
same is not binding upon the Estate.
WHEREFORE, the OMNIBUS MOTION for the approval of the sale of Philinterlife shares of stock and
release of Ma. Divina Ortañez-Enderes as Special Administratrix is hereby denied.6
On August 29, 1997, the intestate court issued another order granting the motion of Special Administratrix
Enderes for the annulment of the March 4, 1982 memorandum of agreement or extrajudicial partition of
estate. The court reasoned that:
In consonance with the Order of this Court dated August 11, 1997 DENYING the approval of the sale of
Philinterlife shares of stocks and release of Ma. Divina Ortañez-Enderes as Special Administratrix, the
"Urgent Motion to Declare Void Ab Initio Memorandum of Agreement" dated December 19, 1995. . . is
hereby impliedly partially resolved insofar as the transfer/waiver/renunciation of the Philinterlife shares of
stock are concerned, in particular, No. 5, 9(c), 10(b) and 11(d)(ii) of the Memorandum of Agreement.
WHEREFORE, this Court hereby declares the Memorandum of Agreement dated March 4, 1982 executed
by Juliana S. Ortañez, Rafael S. Ortañez and Jose S. Ortañez as partially void ab initio insofar as the
transfer/waiver/renunciation of the Philinterlife shares of stocks are concerned. 7
Aggrieved by the above-stated orders of the intestate court, Jose Ortañez filed, on December 22, 1997, a
petition for certiorari in the Court of Appeals. The appellate court denied his petition, however, ruling that
there was no legal justification whatsoever for the extrajudicial partition of the estate by Jose Ortañez, his
brother Rafael Ortañez and mother Juliana Ortañez during the pendency of the settlement of the estate of Dr.
Ortañez, without the requisite approval of the intestate court, when it was clear that there were other heirs to
the estate who stood to be prejudiced thereby. Consequently, the sale made by Jose Ortañez and his mother
Juliana Ortañez to FLAG of the shares of stock they invalidly appropriated for themselves, without approval
of the intestate court, was void.8
Special Administrator Jose Ortañez filed a motion for reconsideration of the Court of Appeals decision but it
was denied. He elevated the case to the Supreme Court via petition for review under Rule 45 which the
Supreme Court dismissed on October 5, 1998, on a technicality. His motion for reconsideration was denied
with finality on January 13, 1999. On February 23, 1999, the resolution of the Supreme Court dismissing the
petition of Special Administrator Jose Ortañez became final and was subsequently recorded in the book of
entries of judgments.
Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with the rest of the FLAG-controlled board of
directors, increased the authorized capital stock of Philinterlife, diluting in the process the 50.725%
controlling interest of the decedent, Dr. Juvencio Ortañez, in the insurance company.9 This became the
subject of a separate action at the Securities and Exchange Commission filed by private respondent-Special
Administratrix Enderes against petitioner Jose Lee and other members of the FLAG-controlled board of
Philinterlife on November 7, 1994. Thereafter, various cases were filed by Jose Lee as president of
Philinterlife and Juliana Ortañez and her sons against private respondent-Special Administratrix Enderes in
the SEC and civil courts.10 Somehow, all these cases were connected to the core dispute on the legality of
the sale of decedent Dr. Ortañez’s Philinterlife shares of stock to petitioner FLAG, represented by its
president, herein petitioner Jose Lee who later became the president of Philinterlife after the controversial
sale.
On May 2, 2000, private respondent-Special Administratrix Enderes and her siblings filed a motion for
execution of the Orders of the intestate court dated August 11 and August 29, 1997 because the orders of the
intestate court nullifying the sale (upheld by the Court of Appeals and the Supreme Court) had long became
final. Respondent-Special Administratrix Enderes served a copy of the motion to petitioners Jose Lee and
Alma Aggabao as president and secretary, respectively, of Philinterlife, 11 but petitioners ignored the same.
On July 6, 2000, the intestate court granted the motion for execution, the dispositive portion of which read:
WHEREFORE, premises considered, let a writ of execution issue as follows:
1. Confirming the nullity of the sale of the 2,029 Philinterlife shares in the name of the Estate of
Dr. Juvencio Ortañez to Filipino Loan Assistance Group (FLAG);
2. Commanding the President and the Corporate Secretary of Philinterlife to reinstate in the stock
and transfer book of Philinterlife the 2,029 Philinterlife shares of stock in the name of the Estate of
Dr. Juvencio P. Ortañez as the owner thereof without prejudice to other claims for violation of pre-
emptive rights pertaining to the said 2,029 Philinterlife shares;
3. Directing the President and the Corporate Secretary of Philinterlife to issue stock certificates of
Philinterlife for 2,029 shares in the name of the Estate of Dr. Juvencio P. Ortañez as the owner
thereof without prejudice to other claims for violations of pre-emptive rights pertaining to the said
2,029 Philinterlife shares and,
4. Confirming that only the Special Administratrix, Ma. Divina Ortañez-Enderes, has the power to
exercise all the rights appurtenant to the said shares, including the right to vote and to receive
dividends.
5. Directing Philinterlife and/or any other person or persons claiming to represent it or otherwise,
to acknowledge and allow the said Special Administratrix to exercise all the aforesaid rights on the
said shares and to refrain from resorting to any action which may tend directly or indirectly to
impede, obstruct or bar the free exercise thereof under pain of contempt.
6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or any other person
or persons claiming to represent it or otherwise, are hereby directed to comply with this order
within three (3) days from receipt hereof under pain of contempt.
7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to implement the writ
of execution with dispatch to forestall any and/or further damage to the Estate.
542
SO ORDERED.12
In the several occasions that the sheriff went to the office of petitioners to execute the writ of execution, he
was barred by the security guard upon petitioners’ instructions. Thus, private respondent-Special
Administratrix Enderes filed a motion to cite herein petitioners Jose Lee and Alma Aggabao (president and
secretary, respectively, of Philinterlife) in contempt.13
Petitioners Lee and Aggabao subsequently filed before the Court of Appeals a petition for certiorari,
docketed as CA G.R. SP No. 59736. Petitioners alleged that the intestate court gravely abused its discretion
in (1) declaring that the ownership of FLAG over the Philinterlife shares of stock was null and void; (2)
ordering the execution of its order declaring such nullity and (3) depriving the petitioners of their right to
due process.
On July 26, 2000, the Court of Appeals dismissed the petition outright:
We are constrained to DISMISS OUTRIGHT the present petition for certiorari and prohibition with prayer
for a temporary restraining order and/or writ of preliminary injunction in the light of the following
considerations:
1. The assailed Order dated August 11, 1997 of the respondent judge had long become final and
executory;
2. The certification on non-forum shopping is signed by only one (1) of the three (3) petitioners in
violation of the Rules; and
3. Except for the assailed orders and writ of execution, deed of sale with right to repurchase, deed
of sale of shares of stocks and omnibus motion, the petition is not accompanied by such pleadings,
documents and other material portions of the record as would support the allegations therein in
violation of the second paragraph, Rule 65 of the 1997 Rules of Civil Procedure, as amended.
Petition is DISMISSED.
SO ORDERED.14
The motion for reconsideration filed by petitioners Lee and Aggabao of the above decision was denied by
the Court of Appeals on October 30, 2000:
This resolves the "urgent motion for reconsideration" filed by the petitioners of our resolution of July 26,
2000 dismissing outrightly the above-entitled petition for the reason, among others, that the assailed Order
dated August 11, 1997 of the respondent Judge had long become final and executory.
Dura lex, sed lex.
WHEREFORE, the urgent motion for reconsideration is hereby DENIED, for lack of merit.
SO ORDERED.15
On December 4, 2000, petitioners elevated the case to the Supreme Court through a petition for review
under Rule 45 but on December 13, 2000, we denied the petition because there was no showing that the
Court of Appeals in CA G.R. SP No. 59736 committed any reversible error to warrant the exercise by the
Supreme Court of its discretionary appellate jurisdiction. 16
However, upon motion for reconsideration filed by petitioners Lee and Aggabao, the Supreme Court granted
the motion and reinstated their petition on September 5, 2001. The parties were then required to submit their
respective memoranda.
Meanwhile, private respondent-Special Administratrix Enderes, on July 19, 2000, filed a motion to direct
the branch clerk of court in lieu of herein petitioners Lee and Aggabao to reinstate the name of Dr. Ortañez
in the stock and transfer book of Philinterlife and issue the corresponding stock certificate pursuant to
Section 10, Rule 39 of the Rules of Court which provides that "the court may direct the act to be done at the
cost of the disobedient party by some other person appointed by the court and the act when so done shall
have the effect as if done by the party." Petitioners Lee and Aggabao opposed the motion on the ground that
the intestate court should refrain from acting on the motion because the issues raised therein were directly
related to the issues raised by them in their petition for certiorari at the Court of Appeals docketed as CA-
G.R. SP No. 59736. On October 30, 2000, the intestate court granted the motion, ruling that there was no
prohibition for the intestate court to execute its orders inasmuch as the appellate court did not issue any TRO
or writ of preliminary injunction.
On December 3, 2000, petitioners Lee and Aggabao filed a petition for certiorari in the Court of Appeals,
docketed as CA-G.R. SP No. 62461, questioning this time the October 30, 2000 order of the intestate court
directing the branch clerk of court to issue the stock certificates. They also questioned in the Court of
Appeals the order of the intestate court nullifying the sale made in their favor by Juliana Ortañez and Jose
Ortañez. On November 20, 2002, the Court of Appeals denied their petition and upheld the power of the
intestate court to execute its order. Petitioners Lee and Aggabao then filed motion for reconsideration which
at present is still pending resolution by the Court of Appeals.
Petitioners Jose Lee and Alma Aggabao (president and secretary, respectively, of Philinterlife) and FLAG
now raise the following errors for our consideration:
The Court of Appeals committed grave reversible ERROR:
A. In failing to reconsider its previous resolution denying the petition despite the fact that the
appellate court’s mistake in apprehending the facts had become patent and evident from the motion
for reconsideration and the comment of respondent Enderes which had admitted the factual
allegations of petitioners in the petition as well as in the motion for reconsideration. Moreover, the
resolution of the appellate court denying the motion for reconsideration was contained in only one
page without even touching on the substantive merits of the exhaustive discussion of facts and
supporting law in the motion for reconsideration in violation of the Rule on administrative due
process;
B. in failing to set aside the void orders of the intestate court on the erroneous ground that the
orders were final and executory with regard to petitioners even as the latter were never notified of
the proceedings or order canceling its ownership;
C. in not finding that the intestate court committed grave abuse of discretion amounting to excess
of jurisdiction (1) when it issued the Omnibus Order nullifying the ownership of petitioner FLAG
over shares of stock which were alleged to be part of the estate and (2) when it issued a void writ
of execution against petitioner FLAG as present owner to implement merely provisional orders,
thereby violating FLAG’s constitutional right against deprivation of property without due process;
D. In failing to declare null and void the orders of the intestate court which nullified the sale of
shares of stock between the legitimate heir Jose S. Ortañez and petitioner FLAG because of settled
law and jurisprudence, i.e., that an heir has the right to dispose of the decedent’s property even if
the same is under administration pursuant to Civil Code provision that possession of hereditary
property is transmitted to the heir the moment of death of the decedent (Acedebo vs. Abesamis,
217 SCRA 194);
E. In disregarding the final decision of the Supreme Court in G.R. No. 128525 dated December 17,
1999 involving substantially the same parties, to wit, petitioners Jose C. Lee and Alma Aggabao
were respondents in that case while respondent Ma. Divina Enderes was the petitioner therein.
That decision, which can be considered law of the case, ruled that petitioners cannot be enjoined
by respondent Enderes from exercising their power as directors and officers of Philinterlife and
that the intestate court in charge of the intestate proceedings cannot adjudicate title to properties
claimed to be part of the estate and which are equally CLAIMED BY petitioner FLAG. 17
The petition has no merit.
Petitioners Jose Lee and Alma Aggabao, representing Philinterlife and FLAG, assail before us not only the
validity of the writ of execution issued by the intestate court dated July 7, 2000 but also the validity of the
August 11, 1997 order of the intestate court nullifying the sale of the 2,029 Philinterlife shares of stock
made by Juliana Ortañez and Jose Ortañez, in their personal capacities and without court approval, in favor
of petitioner FLAG.
We cannot allow petitioners to reopen the issue of nullity of the sale of the Philinterlife shares of stock in
their favor because this was already settled a long time ago by the Court of Appeals in its decision dated
543
June 23, 1998 in CA-G.R. SP No. 46342. This decision was effectively upheld by us in our resolution dated
October 9, 1998 in G.R. No. 135177 dismissing the petition for review on a technicality and thereafter
denying the motion for reconsideration on January 13, 1999 on the ground that there was no compelling
reason to reconsider said denial.18 Our decision became final on February 23, 1999 and was accordingly
entered in the book of entry of judgments. For all intents and purposes therefore, the nullity of the sale of the
Philinterlife shares of stock made by Juliana Ortañez and Jose Ortañez in favor of petitioner FLAG is
already a closed case. To reopen said issue would set a bad precedent, opening the door wide open for
dissatisfied parties to relitigate unfavorable decisions no end. This is completely inimical to the orderly and
efficient administration of justice.
The said decision of the Court of Appeals in CA-G.R. SP No. 46342 affirming the nullity of the sale made
by Jose Ortañez and his mother Juliana Ortañez of the Philinterlife shares of stock read:
Petitioner’s asseverations relative to said [memorandum] agreement were scuttled during the hearing before
this Court thus:
JUSTICE AQUINO:
Counsel for petitioner, when the Memorandum of Agreement was executed, did the children of
Juliana Salgado know already that there was a claim for share in the inheritance of the children of
Novicio?
ATTY. CALIMAG:
Your Honor please, at that time, Your Honor, it is already known to them.
JUSTICE AQUINO:
What can be your legal justification for extrajudicial settlement of a property subject of intestate
proceedings when there is an adverse claim of another set of heirs, alleged heirs? What would be
the legal justification for extra-judicially settling a property under administration without the
approval of the intestate court?
ATTY. CALIMAG:
Well, Your Honor please, in that extra-judicial settlement there is an approval of the honorable
court as to the property’s partition x x x. There were as mentioned by the respondents’ counsel,
Your Honor.
ATTY. BUYCO:
No…
JUSTICE AQUINO:
The point is, there can be no adjudication of a property under intestate proceedings without the
approval of the court. That is basic unless you can present justification on that. In fact, there are
two steps: first, you ask leave and then execute the document and then ask for approval of the
document executed. Now, is there any legal justification to exclude this particular transaction from
those steps?
ATTY. CALIMAG:
None, Your Honor.
ATTY. BUYCO:
With that admission that there is no legal justification, Your Honor, we rest the case for the private
respondent. How can the lower court be accused of abusing its discretion? (pages 33-35, TSN of
January 29, 1998).
Thus, We find merit in the following postulation by private respondent:
What we have here is a situation where some of the heirs of the decedent without securing court approval
have appropriated as their own personal property the properties of [the] Estate, to the exclusion and the
extreme prejudice of the other claimant/heirs. In other words, these heirs, without court approval, have
distributed the asset of the estate among themselves and proceeded to dispose the same to third parties even
in the absence of an order of distribution by the Estate Court. As admitted by petitioner’s counsel, there was
absolutely no legal justification for this action by the heirs. There being no legal justification, petitioner has
no basis for demanding that public respondent [the intestate court] approve the sale of the Philinterlife
shares of the Estate by Juliana and Jose Ortañez in favor of the Filipino Loan Assistance Group.
It is an undisputed fact that the parties to the Memorandum of Agreement dated March 4, 1982 (see Annex 7
of the Comment). . . are not the only heirs claiming an interest in the estate left by Dr. Juvencio P. Ortañez.
The records of this case. . . clearly show that as early as March 3, 1981 an Opposition to the Application for
Issuance of Letters of Administration was filed by the acknowledged natural children of Dr. Juvencio P.
Ortañez with Ligaya Novicio. . . This claim by the acknowledged natural children of Dr. Juvencio P.
Ortañez is admittedly known to the parties to the Memorandum of Agreement before they executed the
same. This much was admitted by petitioner’s counsel during the oral argument. xxx
Given the foregoing facts, and the applicable jurisprudence, public respondent can never be faulted for not
approving. . . the subsequent sale by the petitioner [Jose Ortañez] and his mother [Juliana Ortañez] of the
Philinterlife shares belonging to the Estate of Dr. Juvencio P. Ortañez." (pages 3-4 of Private Respondent’s
Memorandum; pages 243-244 of the Rollo)
Amidst the foregoing, We found no grave abuse of discretion amounting to excess or want of jurisdiction
committed by respondent judge.19
From the above decision, it is clear that Juliana Ortañez, and her three sons, Jose, Rafael and Antonio, all
surnamed Ortañez, invalidly entered into a memorandum of agreement extrajudicially partitioning the
intestate estate among themselves, despite their knowledge that there were other heirs or claimants to the
estate and before final settlement of the estate by the intestate court. Since the appropriation of the estate
properties by Juliana Ortañez and her children (Jose, Rafael and Antonio Ortañez) was invalid, the
subsequent sale thereof by Juliana and Jose to a third party (FLAG), without court approval, was likewise
void.
An heir can sell his right, interest, or participation in the property under administration under Art. 533 of the
Civil Code which provides that possession of hereditary property is deemed transmitted to the heir without
interruption from the moment of death of the decedent.20 However, an heir can only alienate such portion of
the estate that may be allotted to him in the division of the estate by the probate or intestate court after final
adjudication, that is, after all debtors shall have been paid or the devisees or legatees shall have been given
their shares.21 This means that an heir may only sell his ideal or undivided share in the estate, not any
specific property therein. In the present case, Juliana Ortañez and Jose Ortañez sold specific properties of
the estate (1,014 and 1,011 shares of stock in Philinterlife) in favor of petitioner FLAG. This they could not
lawfully do pending the final adjudication of the estate by the intestate court because of the undue prejudice
it would cause the other claimants to the estate, as what happened in the present case.
Juliana Ortañez and Jose Ortañez sold specific properties of the estate, without court approval. It is well-
settled that court approval is necessary for the validity of any disposition of the decedent’s estate. In the
early case of Godoy vs. Orellano,22 we laid down the rule that the sale of the property of the estate by an
administrator without the order of the probate court is void and passes no title to the purchaser. And in the
case of Dillena vs. Court of Appeals,23 we ruled that:
[I]t must be emphasized that the questioned properties (fishpond) were included in the inventory of
properties of the estate submitted by then Administratrix Fausta Carreon Herrera on November 14, 1974.
Private respondent was appointed as administratrix of the estate on March 3, 1976 in lieu of Fausta Carreon
Herrera. On November 1, 1978, the questioned deed of sale of the fishponds was executed between
petitioner and private respondent without notice and approval of the probate court. Even after the sale,
administratrix Aurora Carreon still included the three fishponds as among the real properties of the estate in
her inventory submitted on August 13, 1981. In fact, as stated by the Court of Appeals, petitioner, at the
time of the sale of the fishponds in question, knew that the same were part of the estate under administration.
xxx xxx xxx
The subject properties therefore are under the jurisdiction of the probate court which according to our settled
jurisprudence has the authority to approve any disposition regarding properties under administration. . .
More emphatic is the declaration We made in Estate of Olave vs. Reyes (123 SCRA 767) where We stated
544
that when the estate of the deceased person is already the subject of a testate or intestate proceeding, the
administrator cannot enter into any transaction involving it without prior approval of the probate court.
Only recently, in Manotok Realty, Inc. vs. Court of Appeals (149 SCRA 174), We held that the sale of an
immovable property belonging to the estate of a decedent, in a special proceedings, needs court approval. . .
This pronouncement finds support in the previous case of Dolores Vda. De Gil vs. Agustin Cancio (14
SCRA 797) wherein We emphasized that it is within the jurisdiction of a probate court to approve the sale of
properties of a deceased person by his prospective heirs before final adjudication. x x x
It being settled that property under administration needs the approval of the probate court before it can be
disposed of, any unauthorized disposition does not bind the estate and is null and void. As early as 1921 in
the case of Godoy vs. Orellano (42 Phil 347), We laid down the rule that a sale by an administrator of
property of the deceased, which is not authorized by the probate court is null and void and title does not pass
to the purchaser.
There is hardly any doubt that the probate court can declare null and void the disposition of the property
under administration, made by private respondent, the same having been effected without authority from
said court. It is the probate court that has the power to authorize and/or approve the sale (Section 4 and 7,
Rule 89), hence, a fortiori, it is said court that can declare it null and void for as long as the proceedings
had not been closed or terminated. To uphold petitioner’s contention that the probate court cannot annul the
unauthorized sale, would render meaningless the power pertaining to the said court. (Bonga vs. Soler, 2
SCRA 755). (emphasis ours)
Our jurisprudence is therefore clear that (1) any disposition of estate property by an administrator or
prospective heir pending final adjudication requires court approval and (2) any unauthorized disposition of
estate property can be annulled by the probate court, there being no need for a separate action to annul the
unauthorized disposition.
The question now is: can the intestate or probate court execute its order nullifying the invalid sale?
We see no reason why it cannot. The intestate court has the power to execute its order with regard to the
nullity of an unauthorized sale of estate property, otherwise its power to annul the unauthorized or
fraudulent disposition of estate property would be meaningless. In other words, enforcement is a necessary
adjunct of the intestate or probate court’s power to annul unauthorized or fraudulent transactions to prevent
the dissipation of estate property before final adjudication.
Moreover, in this case, the order of the intestate court nullifying the sale was affirmed by the appellate
courts (the Court of Appeals in CA-G.R. SP No. 46342 dated June 23, 1998 and subsequently by the
Supreme Court in G.R. No. 135177 dated October 9, 1998). The finality of the decision of the Supreme
Court was entered in the book of entry of judgments on February 23, 1999. Considering the finality of the
order of the intestate court nullifying the sale, as affirmed by the appellate courts, it was correct for private
respondent-Special Administratrix Enderes to thereafter move for a writ of execution and for the intestate
court to grant it.
Petitioners Jose Lee, Alma Aggabao and FLAG, however, contend that the probate court could not issue a
writ of execution with regard to its order nullifying the sale because said order was merely provisional:
The only authority given by law is for respondent judge to determine provisionally whether said shares are
included or excluded in the inventory… In ordering the execution of the orders, respondent judge acted in
excess of his jurisdiction and grossly violated settled law and jurisprudence, i.e., that the determination by a
probate or intestate court of whether a property is included or excluded in the inventory of the estate being
provisional in nature, cannot be the subject of execution.24 (emphasis ours)
Petitioners’ argument is misplaced. There is no question, based on the facts of this case, that the Philinterlife
shares of stock were part of the estate of Dr. Juvencio Ortañez from the very start as in fact these shares
were included in the inventory of the properties of the estate submitted by Rafael Ortañez after he and his
brother, Jose Ortañez, were appointed special administrators by the intestate court.25
The controversy here actually started when, during the pendency of the settlement of the estate of Dr.
Ortañez, his wife Juliana Ortañez sold the 1,014 Philinterlife shares of stock in favor petitioner FLAG
without the approval of the intestate court. Her son Jose Ortañez later sold the remaining 1,011 Philinterlife
shares also in favor of FLAG without the approval of the intestate court.
We are not dealing here with the issue of inclusion or exclusion of properties in the inventory of the estate
because there is no question that, from the very start, the Philinterlife shares of stock were owned by the
decedent, Dr. Juvencio Ortañez. Rather, we are concerned here with the effect of the sale made by the
decedent’s heirs, Juliana Ortañez and Jose Ortañez, without the required approval of the intestate court. This
being so, the contention of petitioners that the determination of the intestate court was merely provisional
and should have been threshed out in a separate proceeding is incorrect.
The petitioners Jose Lee and Alma Aggabao next contend that the writ of execution should not be executed
against them because they were not notified, nor they were aware, of the proceedings nullifying the sale of
the shares of stock.
We are not persuaded. The title of the purchaser like herein petitioner FLAG can be struck down by the
intestate court after a clear showing of the nullity of the alienation. This is the logical consequence of our
ruling in Godoy andin several subsequent cases.26 The sale of any property of the estate by an administrator
or prospective heir without order of the probate or intestate court is void and passes no title to the
purchaser. Thus, in Juan Lao et al. vs. Hon. Melencio Geneto, G.R. No. 56451, June 19, 1985, we ordered
the probate court to cancel the transfer certificate of title issued to the vendees at the instance of the
administrator after finding that the sale of real property under probate proceedings was made without the
prior approval of the court. The dispositive portion of our decision read:
IN VIEW OF THE FOREGOING CONSIDERATIONS, the assailed Order dated February 18, 1981 of the
respondent Judge approving the questioned Amicable Settlement is declared NULL and VOID and hereby
SET ASIDE. Consequently, the sale in favor of Sotero Dioniosio III and by the latter to William Go is
likewise declared NULL and VOID. The Transfer Certificate of Title issued to the latter is hereby ordered
cancelled.
It goes without saying that the increase in Philinterlife’s authorized capital stock, approved on the vote of
petitioners’ non-existent shareholdings and obviously calculated to make it difficult for Dr. Ortañez’s estate
to reassume its controlling interest in Philinterlife, was likewise void ab initio.
Petitioners next argue that they were denied due process.
We do not think so.
The facts show that petitioners, for reasons known only to them, did not appeal the decision of the intestate
court nullifying the sale of shares of stock in their favor. Only the vendor, Jose Ortañez, appealed the case.
A careful review of the records shows that petitioners had actual knowledge of the estate settlement
proceedings and that they knew private respondent Enderes was questioning therein the sale to them of the
Philinterlife shares of stock.
It must be noted that private respondent-Special Administratrix Enderes filed before the intestate court (RTC
of Quezon City, Branch 85) a "Motion to Declare Void Ab Initio Deeds of Sale of Philinterlife Shares of
Stock" on March 22, 1996. But as early as 1994, petitioners already knew of the pending settlement
proceedings and that the shares they bought were under the administration by the intestate court because
private respondent Ma. Divina Ortañez-Enderes and her mother Ligaya Novicio had filed a case against
them at the Securities and Exchange Commission on November 7, 1994, docketed as SEC No. 11-94-4909,
for annulment of transfer of shares of stock, annulment of sale of corporate properties, annulment of
subscriptions on increased capital stocks, accounting, inspection of corporate books and records and
damages with prayer for a writ of preliminary injunction and/or temporary restraining order. 27 In said case,
Enderes and her mother questioned the sale of the aforesaid shares of stock to petitioners. The SEC hearing
officer in fact, in his resolution dated March 24, 1995, deferred to the jurisdiction of the intestate court to
rule on the validity of the sale of shares of stock sold to petitioners by Jose Ortañez and Juliana Ortañez:
Petitioners also averred that. . . the Philinterlife shares of Dr. Juvencio Ortañez who died, in 1980, are part of
his estate which is presently the subject matter of an intestate proceeding of the RTC of Quezon City,
Branch 85. Although, private respondents [Jose Lee et al.] presented the documents of partition whereby the
545
foregoing share of stocks were allegedly partitioned and conveyed to Jose S. Ortañez who allegedly
assigned the same to the other private respondents, approval of the Court was not presented. Thus, the
assignments to the private respondents [Jose Lee et al.] of the subject shares of stocks are void.
xxx xxx xxx
With respect to the alleged extrajudicial partition of the shares of stock owned by the late Dr. Juvencio
Ortañez, we rule that the matter properly belongs to the jurisdiction of the regular court where the intestate
proceedings are currently pending.28
With this resolution of the SEC hearing officer dated as early as March 24, 1995 recognizing the jurisdiction
of the intestate court to determine the validity of the extrajudicial partition of the estate of Dr. Ortañez and
the subsequent sale by the heirs of the decedent of the Philinterlife shares of stock to petitioners, how can
petitioners claim that they were not aware of the intestate proceedings?
Furthermore, when the resolution of the SEC hearing officer reached the Supreme Court in 1996 (docketed
as G.R. 128525), herein petitioners who were respondents therein filed their answer which contained
statements showing that they knew of the pending intestate proceedings:
[T]he subject matter of the complaint is not within the jurisdiction of the SEC but with the Regional Trial
Court; Ligaya Novicio and children represented themselves to be the common law wife and illegitimate
children of the late Ortañez; that on March 4, 1982, the surviving spouse Juliana Ortañez, on her behalf and
for her minor son Antonio, executed a Memorandum of Agreement with her other sons Rafael and Jose,
both surnamed Ortañez, dividing the estate of the deceased composed of his one-half (1/2) share in the
conjugal properties; that in the said Memorandum of Agreement, Jose S. Ortañez acquired as his share of the
estate the 1,329 shares of stock in Philinterlife; that on March 4, 1982, Juliana and Rafael assigned their
respective shares of stock in Philinterlife to Jose; that contrary to the contentions of petitioners, private
respondents Jose Lee, Carlos Lee, Benjamin Lee and Alma Aggabao became stockholders of Philinterlife on
March 23, 1983 when Jose S. Ortañez, the principal stockholder at that time, executed a deed of sale of his
shares of stock to private respondents; and that the right of petitioners to question the Memorandum of
Agreement and the acquisition of shares of stock of private respondent is barred by prescription.29
Also, private respondent-Special Administratrix Enderes offered additional proof of actual knowledge of the
settlement proceedings by petitioners which petitioners never denied: (1) that petitioners were represented
by Atty. Ricardo Calimag previously hired by the mother of private respondent Enderes to initiate cases
against petitioners Jose Lee and Alma Aggabao for the nullification of the sale of the shares of stock but said
counsel made a conflicting turn-around and appeared instead as counsel of petitioners, and (2) that the deeds
of sale executed between petitioners and the heirs of the decedent (vendors Juliana Ortañez and Jose
Ortañez) were acknowledged before Atty. Ramon Carpio who, during the pendency of the settlement
proceedings, filed a motion for the approval of the sale of Philinterlife shares of stock to the Knights of
Columbus Fraternal Association, Inc. (which motion was, however, later abandoned). 30 All this sufficiently
proves that petitioners, through their counsels, knew of the pending settlement proceedings.
Finally, petitioners filed several criminal cases such as libel (Criminal Case No. 97-7179-81), grave coercion
(Criminal Case No. 84624) and robbery (Criminal Case No. Q-96-67919) against private respondent’s
mother Ligaya Novicio who was a director of Philinterlife,31 all of which criminal cases were related to the
questionable sale to petitioners of the Philinterlife shares of stock.
Considering these circumstances, we cannot accept petitioners’ claim of denial of due process. The essence
of due process is the reasonable opportunity to be heard. Where the opportunity to be heard has been
accorded, there is no denial of due process.32 In this case, petitioners knew of the pending instestate
proceedings for the settlement of Dr. Juvencio Ortañez’s estate but for reasons they alone knew, they never
intervened. When the court declared the nullity of the sale, they did not bother to appeal. And when they
were notified of the motion for execution of the Orders of the intestate court, they ignored the same. Clearly,
petitioners alone should bear the blame.
Petitioners next contend that we are bound by our ruling in G.R. No. 128525 entitled Ma. Divina Ortañez-
Enderes vs. Court of Appeals, dated December 17, 1999, where we allegedly ruled that the intestate court
"may not pass upon the title to a certain property for the purpose of determining whether the same should or
should not be included in the inventory but such determination is not conclusive and is subject to final
decision in a separate action regarding ownership which may be constituted by the parties."
We are not unaware of our decision in G.R. No. 128525. The issue therein was whether the Court of
Appeals erred in affirming the resolution of the SEC that Enderes et al. were not entitled to the issuance of
the writ of preliminary injunction. We ruled that the Court of Appeals was correct in affirming the resolution
of the SEC denying the issuance of the writ of preliminary injunction because injunction is not designed to
protect contingent rights. Said case did not rule on the issue of the validity of the sale of shares of stock
belonging to the decedent’s estate without court approval nor of the validity of the writ of execution issued
by the intestate court. G.R. No. 128525 clearly involved a different issue and it does not therefore apply to
the present case.
Petitioners and all parties claiming rights under them are hereby warned not to further delay the execution of
the Orders of the intestate court dated August 11 and August 29, 1997.
WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals in CA-G.R. S.P. No.
59736 dated July 26, 2000, dismissing petitioners’ petition for certiorari and affirming the July 6, 2000
order of the trial court which ordered the execution of its (trial court’s) August 11 and 29, 1997 orders, is
hereby AFFIRMED.
SO ORDERED.

546
 SECOND DIVISION
G.R. No. 118671 January 29, 1996
THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ, Executor, petitioner,
vs.
THE COURT OF APPEALS (Former Special Sixth Division), MARIA PILAR RUIZ-MONTES, MARIA
CATHRYN RUIZ, CANDICE ALBERTINE RUIZ, MARIA ANGELINE RUIZ and THE PRESIDING
JUDGE OF THE REGIONAL TRIAL COURT OF PASIG, respondents.
DECISION
PUNO, J.:
This petition for review on certiorari seeks to annul and set aside the decision dated November 10, 1994 and
the resolution dated January 5, 1995 of the Court of Appeals in CA-G.R. SP No. 33045.
The facts show that on June 27, 1987, Hilario M. Ruiz 1 executed a holographic will naming as his heirs his
only son, Edmond Ruiz, his adopted daughter, private respondent Maria Pilar Ruiz Montes, and his three
granddaughters, private respondents Maria Cathryn, Candice Albertine and Maria Angeline, all children of
Edmond Ruiz. The testator bequeathed to his heirs substantial cash, personal and real properties and named
Edmond Ruiz executor of his estate.2
On April 12, 1988, Hilario Ruiz died. Immediately thereafter, the cash component of his estate was
distributed among Edmond Ruiz and private respondents in accordance with the decedent's will. For
unbeknown reasons, Edmond, the named executor, did not take any action for the probate of his father's
holographic will.
On June 29, 1992, four years after the testator's death, it was private respondent Maria Pilar Ruiz Montes
who filed before the Regional Trial Court, Branch 156, Pasig, a petition for the probate and approval of
Hilario Ruiz's will and for the issuance of letters testamentary to Edmond Ruiz, 3 Surprisingly, Edmond
opposed the petition on the ground that the will was executed under undue influence.
On November 2, 1992, one of the properties of the estate — the house and lot at No. 2 Oliva Street, Valle
Verde IV, Pasig which the testator bequeathed to Maria Cathryn, Candice Albertine and Maria Angeline4 —
was leased out by Edmond Ruiz to third persons.
On January 19, 1993, the probate court ordered Edmond to deposit with the Branch Clerk of Court the rental
deposit and payments totalling P540,000.00 representing the one-year lease of the Valle Verde property. In
compliance, on January 25, 1993, Edmond turned over the amount of P348,583.56, representing the balance
of the rent after deducting P191,416.14 for repair and maintenance expenses on the estate. 5
In March 1993, Edmond moved for the release of P50,000.00 to pay the real estate taxes on the real
properties of the estate. The probate court approved the release of P7,722.00. 6
On May 14, 1993, Edmond withdrew his opposition to the probate of the will. Consequently, the probate
court, on May 18, 1993, admitted the will to probate and ordered the issuance of letters testamentary to
Edmond conditioned upon the filing of a bond in the amount of P50,000.00. The letters testamentary were
issued on June 23, 1993.
On July 28, 1993, petitioner Testate Estate of Hilario Ruiz, with Edmond Ruiz as executor, filed an "Ex-
Parte Motion for Release of Funds." It prayed for the release of the rent payments deposited with the Branch
Clerk of Court. Respondent Montes opposed the motion and concurrently filed a "Motion for Release of
Funds to Certain Heirs" and "Motion for Issuance of Certificate of Allowance of Probate Will." Montes
prayed for the release of the said rent payments to Maria Cathryn, Candice Albertine and Maria Angeline
and for the distribution of the testator's properties, specifically the Valle Verde property and the Blue Ridge
apartments, in accordance with the provisions of the holographic will.
On August 26, 1993, the probate court denied petitioner's motion for release of funds but granted respondent
Montes' motion in view of petitioner's lack of opposition. It thus ordered the release of the rent payments to
the decedent's three granddaughters. It further ordered the delivery of the titles to and possession of the
properties bequeathed to the three granddaughters and respondent Montes upon the filing of a bond of
P50,000.00.
547
Petitioner moved for reconsideration alleging that he actually filed his opposition to respondent Montes's
motion for release of rent payments which opposition the court failed to consider. Petitioner likewise
reiterated his previous motion for release of funds.
On November 23, 1993, petitioner, through counsel, manifested that he was withdrawing his motion for
release of funds in view of the fact that the lease contract over the Valle Verde property had been renewed
for another year.7
Despite petitioner's manifestation, the probate court, on December 22, 1993, ordered the release of the funds
to Edmond but only "such amount as may be necessary to cover the expenses of administration and
allowances for support" of the testator's three granddaughters subject to collation and deductible from their
share in the inheritance. The court, however, held in abeyance the release of the titles to respondent Montes
and the three granddaughters until the lapse of six months from the date of first publication of the notice to
creditors.8 The court stated thus:
xxx xxx xxx
After consideration of the arguments set forth thereon by the parties the court resolves to allow
Administrator Edmond M. Ruiz to take possession of the rental payments deposited with the Clerk
of Court, Pasig Regional Trial Court, but only such amount as may be necessary to cover the
expenses of administration and allowances for support of Maria Cathryn Veronique, Candice
Albertine and Maria Angeli, which are subject to collation and deductible from the share in the
inheritance of said heirs and insofar as they exceed the fruits or rents pertaining to them.
As to the release of the titles bequeathed to petitioner Maria Pilar Ruiz-Montes and the above-
named heirs, the same is hereby reconsidered and held in abeyance until the lapse of six (6)
months from the date of first publication of Notice to Creditors.
WHEREFORE, Administrator Edmond M. Ruiz is hereby ordered to submit an accounting of the
expenses necessary for administration including provisions for the support Of Maria Cathryn
Veronique Ruiz, Candice Albertine Ruiz and Maria Angeli Ruiz before the amount required can be
withdrawn and cause the publication of the notice to creditors with reasonable dispatch.9
Petitioner assailed this order before the Court of Appeals. Finding no grave abuse of discretion on the part of
respondent judge, the appellate court dismissed the petition and sustained the probate court's order in a
decision dated November 10, 199410 and a resolution dated January 5, 1995. 11
Hence, this petition.
Petitioner claims that:
THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN AFFIRMING
AND CONFIRMING THE ORDER OF RESPONDENT REGIONAL TRIAL COURT OF
PASIG, BRANCH 156, DATED DECEMBER 22, 1993, WHICH WHEN GIVEN DUE COURSE
AND IS EFFECTED WOULD: (1) DISALLOW THE EXECUTOR/ADMINISTRATOR OF THE
ESTATE OF THE LATE HILARIO M. RUIZ TO TAKE POSSESSION OF ALL THE REAL
AND PERSONAL PROPERTIES OF THE ESTATE; (2) GRANT SUPPORT, DURING THE
PENDENCY OF THE SETTLEMENT OF AN ESTATE, TO CERTAIN PERSONS NOT
ENTITLED THERETO; AND (3) PREMATURELY PARTITION AND DISTRIBUTE THE
ESTATE PURSUANT TO THE PROVISIONS OF THE HOLOGRAPHIC WILL EVEN
BEFORE ITS INTRINSIC VALIDITY HAS BEEN DETERMINED, AND DESPITE THE
EXISTENCE OF UNPAID DEBTS AND OBLIGATIONS OF THE ESTATE.12
The issue for resolution is whether the probate court, after admitting the will to probate but before payment
of the estate's debts and obligations, has the authority: (1) to grant an allowance from the funds of the estate
for the support of the testator's grandchildren; (2) to order the release of the titles to certain heirs; and (3) to
grant possession of all properties of the estate to the executor of the will.
On the matter of allowance, Section 3 of Rule 83 of the Revised Rules of Court provides:
 Sec. 3. Allowance to widow and family. — The widow and minor or incapacitated children of a
deceased person, during the settlement of the estate, shall receive therefrom under the direction of
the court, such allowance as are provided by law.
Petitioner alleges that this provision only gives the widow and the minor or incapacitated children of the
deceased the right to receive allowances for support during the settlement of estate proceedings. He
contends that the testator's three granddaughters do not qualify for an allowance because they are not
incapacitated and are no longer minors but of legal age, married and gainfully employed. In addition, the
provision expressly states "children" of the deceased which excludes the latter's grandchildren.
It is settled that allowances for support under Section 3 of Rule 83 should not be limited to the "minor or
incapacitated" children of the deceased. Article 18813 of the Civil Code of the Philippines, the substantive
law in force at the time of the testator's death, provides that during the liquidation of the conjugal
partnership, the deceased's legitimate spouse and children, regardless of their age, civil status or gainful
employment, are entitled to provisional support from the funds of the estate. 14 The law is rooted on the fact
that the right and duty to support, especially the right to education, subsist even beyond the age of
majority.15
Be that as it may, grandchildren are not entitled to provisional support from the funds of the decedent's
estate. The law clearly limits the allowance to "widow and children" and does not extend it to the deceased's
grandchildren, regardless of their minority or incapacity. 16 It was error, therefore, for the appellate court to
sustain the probate court's order granting an allowance to the grandchildren of the testator pending
settlement of his estate.
Respondent courts also erred when they ordered the release of the titles of the bequeathed properties to
private respondents six months after the date of first publication of notice to creditors. An order releasing
titles to properties of the estate amounts to an advance distribution of the estate which is allowed only under
the following conditions:
Sec. 2. Advance distribution in special proceedings. — Nothwithstanding a pending controversy or
appeal in proceedings to settle the estate of a decedent, the court may, in its discretion and upon
such terms as it may deem proper and just, permit that such part of the estate as may not be
affected by the controversy or appeal be distributed among the heirs or legatees, upon compliance
with the conditions set forth in Rule 90 of these Rules. 17
And Rule 90 provides that:
Sec. 1. When order for distribution of residue made. — When the debts, funeral charges, and
expenses of administration the allowance to the widow, and inheritance tax if any, chargeable to
the estate in accordance with law, have been paid, the court, on the application of the executor or
administrator, or of a person interested in the estate, and after hearing upon notice shall assign
the residue of the estate to the persons entitled to the same, naming them and the proportions or
parts, to which each is entitled, and such persons may demand and recover their respective shares
from the executor or administrator, or any other person having the same in his possession. If there
is a controversy before the court as to who are the lawful heirs of the deceased person or as to the
distributive shares to which each person is entitled under the law, the controversy shall be heard
and decided as in ordinary cases.
No distribution shall be allowed until the payment of the obligations above-mentioned has been
made or provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by
the court, conditioned for the payment of said obligations within such time as the court directs.18
In settlement of estate proceedings, the distribution of the estate properties can only be made: (1) after all the
debts, funeral charges, expenses of administration, allowance to the widow, and estate tax have been paid; or
(2) before payment of said obligations only if the distributees or any of them gives a bond in a sum fixed by
the court conditioned upon the payment of said obligations within such time as the court directs, or when
provision is made to meet those obligations.19
548
In the case at bar, the probate court ordered the release of the titles to the Valle Verde property and the Blue
Ridge apartments to the private respondents after the lapse of six months from the date of first publication of
the notice to creditors. The questioned order speaks of "notice" to creditors, not payment of debts and
obligations. Hilario Ruiz allegedly left no debts when he died but the taxes on his estate had not hitherto
been paid, much less ascertained. The estate tax is one of those obligations that must be paid before
distribution of the estate. If not yet paid, the rule requires that the distributees post a bond or make such
provisions as to meet the said tax obligation in proportion to their respective shares in the
inheritance.20 Notably, at the time the order was issued the properties of the estate had not yet been
inventoried and appraised.
It was also too early in the day for the probate court to order the release of the titles six months after
admitting the will to probate. The probate of a will is conclusive as to its due execution and extrinsic
validity21 and settles only the question of whether the testator, being of sound mind, freely executed it in
accordance with the formalities prescribed by law.22 Questions as to the intrinsic validity and efficacy of the
provisions of the will, the legality of any devise or legacy may be raised even after the will has been
authenticated.23
The intrinsic validity of Hilario's holographic will was controverted by petitioner before the probate court in
his Reply to Montes' Opposition to his motion for release of funds 24 and his motion for reconsideration of
the August 26, 1993 order of the said court.25 Therein, petitioner assailed the distributive shares of the
devisees and legatees inasmuch as his father's will included the estate of his mother and allegedly impaired
his legitime as an intestate heir of his mother. The Rules provide that if there is a controversy as to who are
the lawful heirs of the decedent and their distributive shares in his estate, the probate court shall proceed to
hear and decide the same as in ordinary cases.26
Still and all, petitioner cannot correctly claim that the assailed order deprived him of his right to take
possession of all the real and personal properties of the estate. The right of an executor or administrator to
the possession and management of the real and personal properties of the deceased is not absolute and can
only be exercised "so long as it is necessary for the payment of the debts and expenses of
administration,"27 Section 3 of Rule 84 of the Revised Rules of Court explicitly provides:
Sec. 3. Executor or administrator to retain whole estate to pay debts, and to administer estate not
willed. — An executor or administrator shall have the right to the possession and management of
the real as well as the personal estate of the deceased so long as it is necessary for the payment of
the debts and expenses for administration.28
When petitioner moved for further release of the funds deposited with the clerk of court, he had been
previously granted by the probate court certain amounts for repair and maintenance expenses on the
properties of the estate, and payment of the real estate taxes thereon. But petitioner moved again for the
release of additional funds for the same reasons he previously cited. It was correct for the probate court to
require him to submit an accounting of the necessary expenses for administration before releasing any
further money in his favor.
It was relevantly noted by the probate court that petitioner had deposited with it only a portion of the one-
year rental income from the Valle Verde property. Petitioner did not deposit its succeeding rents after
renewal of the lease.29Neither did he render an accounting of such funds.
Petitioner must be reminded that his right of ownership over the properties of his father is merely inchoate
as long as the estate has not been fully settled and partitioned. 30 As executor, he is a mere trustee of his
father's estate. The funds of the estate in his hands are trust funds and he is held to the duties and
responsibilities of a trustee of the highest order.31 He cannot unilaterally assign to himself and possess all his
parents' properties and the fruits thereof without first submitting an inventory and appraisal of all real and
personal properties of the deceased, rendering a true account of his administration, the expenses of
administration, the amount of the obligations and estate tax, all of which are subject to a determination by
the court as to their veracity, propriety and justness. 32
IN VIEW WHEREOF, the decision and resolution of the Court of Appeals in CA-G.R. SP No. 33045
affirming the order dated December 22, 1993 of the Regional Trial Court, Branch 156, Pasig in SP Proc. No.
10259 are affirmed with the modification that those portions of the order granting an allowance to the
testator's grandchildren and ordering the release of the titles to the private respondents upon notice to
creditors are annulled and set aside.
Respondent judge is ordered to proceed with dispatch in the proceedings below.
SO ORDERED.

549
 SECOND DIVISION
G.R. No. 149926 February 23, 2005
UNION BANK OF THE PHILIPPINES, petitioner,
vs.
EDMUND SANTIBAÑEZ and FLORENCE SANTIBAÑEZ ARIOLA, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court which seeks the
reversal of the Decision1 of the Court of Appeals dated May 30, 2001 in CA-G.R. CV No. 48831 affirming
the dismissal2 of the petitioner’s complaint in Civil Case No. 18909 by the Regional Trial Court (RTC) of
Makati City, Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M. Santibañez entered into
a loan agreement3 in the amount of ₱128,000.00. The amount was intended for the payment of the purchase
price of one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son,
Edmund, executed a promissory note in favor of the FCCC, the principal sum payable in five equal annual
amortizations of ₱43,745.96 due on May 31, 1981 and every May 31st thereafter up to May 31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan agreement, 4 this time in the amount
of ₱123,156.00. It was intended to pay the balance of the purchase price of another unit of Ford 6600
Agricultural All-Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor Model AR
60K. Again, Efraim and his son, Edmund, executed a promissory note for the said amount in favor of the
FCCC. Aside from such promissory note, they also signed a Continuing Guaranty Agreement 5 for the loan
dated December 13, 1980.
Sometime in February 1981, Efraim died, leaving a holographic will. 6 Subsequently in March 1981, testate
proceedings commenced before the RTC of Iloilo City, Branch 7, docketed as Special Proceedings No.
2706. On April 9, 1981, Edmund, as one of the heirs, was appointed as the special administrator of the estate
of the decedent.7 During the pendency of the testate proceedings, the surviving heirs, Edmund and his sister
Florence Santibañez Ariola, executed a Joint Agreement8 dated July 22, 1981, wherein they agreed to divide
between themselves and take possession of the three (3) tractors; that is, two (2) tractors for Edmund and
one (1) tractor for Florence. Each of them was to assume the indebtedness of their late father to FCCC,
corresponding to the tractor respectively taken by them.
On August 20, 1981, a Deed of Assignment with Assumption of Liabilities 9 was executed by and between
FCCC and Union Savings and Mortgage Bank, wherein the FCCC as the assignor, among others, assigned
all its assets and liabilities to Union Savings and Mortgage Bank.
Demand letters10 for the settlement of his account were sent by petitioner Union Bank of the Philippines
(UBP) to Edmund, but the latter failed to heed the same and refused to pay. Thus, on February 5, 1988, the
petitioner filed a Complaint11 for sum of money against the heirs of Efraim Santibañez, Edmund and
Florence, before the RTC of Makati City, Branch 150, docketed as Civil Case No. 18909. Summonses were
issued against both, but the one intended for Edmund was not served since he was in the United States and
there was no information on his address or the date of his return to the Philippines.12 Accordingly, the
complaint was narrowed down to respondent Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola filed her Answer13 and alleged that the loan documents
did not bind her since she was not a party thereto. Considering that the joint agreement signed by her and her
brother Edmund was not approved by the probate court, it was null and void; hence, she was not liable to the
petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati City, Branch
63.14 Consequently, trial on the merits ensued and a decision was subsequently rendered by the court
dismissing the complaint for lack of merit. The decretal portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack of merit. 15
550
The trial court found that the claim of the petitioner should have been filed with the probate court before
which the testate estate of the late Efraim Santibañez was pending, as the sum of money being claimed was
an obligation incurred by the said decedent. The trial court also found that the Joint Agreement apparently
executed by his heirs, Edmund and Florence, on July 22, 1981, was, in effect, a partition of the estate of the
decedent. However, the said agreement was void, considering that it had not been approved by the probate
court, and that there can be no valid partition until after the will has been probated. The trial court further
declared that petitioner failed to prove that it was the now defunct Union Savings and Mortgage Bank to
which the FCCC had assigned its assets and liabilities. The court also agreed to the contention of respondent
Florence S. Ariola that the list of assets and liabilities of the FCCC assigned to Union Savings and Mortgage
Bank did not clearly refer to the decedent’s account. Ruling that the joint agreement executed by the heirs
was null and void, the trial court held that the petitioner’s cause of action against respondent Florence S.
Ariola must necessarily fail.
The petitioner appealed from the RTC decision and elevated its case to the Court of Appeals (CA), assigning
the following as errors of the trial court:
1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT AGREEMENT (EXHIBIT A)
SHOULD BE APPROVED BY THE PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE NO VALID
PARTITION AMONG THE HEIRS UNTIL AFTER THE WILL HAS BEEN PROBATED.
3. THE COURT A QUO ERRED IN NOT FINDING THAT THE DEFENDANT HAD WAIVED
HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.16
The petitioner asserted before the CA that the obligation of the deceased had passed to his legitimate
children and heirs, in this case, Edmund and Florence; the unconditional signing of the joint agreement
marked as Exhibit "A" estopped respondent Florence S. Ariola, and that she cannot deny her liability under
the said document; as the agreement had been signed by both heirs in their personal capacity, it was no
longer necessary to present the same before the probate court for approval; the property partitioned in the
agreement was not one of those enumerated in the holographic will made by the deceased; and the active
participation of the heirs, particularly respondent Florence S. Ariola, in the present ordinary civil action was
tantamount to a waiver to re-litigate the claim in the estate proceedings.
On the other hand, respondent Florence S. Ariola maintained that the money claim of the petitioner should
have been presented before the probate court.17
The appellate court found that the appeal was not meritorious and held that the petitioner should have filed
its claim with the probate court as provided under Sections 1 and 5, Rule 86 of the Rules of Court. It further
held that the partition made in the agreement was null and void, since no valid partition may be had until
after the will has been probated. According to the CA, page 2, paragraph (e) of the holographic will covered
the subject properties (tractors) in generic terms when the deceased referred to them as "all other properties."
Moreover, the active participation of respondent Florence S. Ariola in the case did not amount to a waiver.
Thus, the CA affirmed the RTC decision, viz.:
WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of Makati City,
Branch 63, is hereby AFFIRMED in toto.
SO ORDERED.18
In the present recourse, the petitioner ascribes the following errors to the CA:
I.
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT AGREEMENT
SHOULD BE APPROVED BY THE PROBATE COURT.
II.
THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION
AMONG THE HEIRS OF THE LATE EFRAIM SANTIBAÑEZ UNTIL AFTER THE WILL HAS BEEN
PROBATED.
III.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT HAD WAIVED
HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.
IV.
RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE WITH THE
PRINCIPAL DEBTOR THE LATE EFRAIM SANTIBAÑEZ ON THE STRENGTH OF THE
CONTINUING GUARANTY AGREEMENT EXECUTED IN FAVOR OF PETITIONER-APPELLANT
UNION BANK.
V.
THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF ₱128,000.00 AND DECEMBER
13, 1980 IN THE AMOUNT OF ₱123,000.00 CATEGORICALLY ESTABLISHED THE FACT THAT
THE RESPONDENTS BOUND THEMSELVES JOINTLY AND SEVERALLY LIABLE WITH THE
LATE DEBTOR EFRAIM SANTIBAÑEZ IN FAVOR OF PETITIONER UNION BANK. 19
The petitioner claims that the obligations of the deceased were transmitted to the heirs as provided in Article
774 of the Civil Code; there was thus no need for the probate court to approve the joint agreement where the
heirs partitioned the tractors owned by the deceased and assumed the obligations related thereto. Since
respondent Florence S. Ariola signed the joint agreement without any condition, she is now estopped from
asserting any position contrary thereto. The petitioner also points out that the holographic will of the
deceased did not include nor mention any of the tractors subject of the complaint, and, as such was beyond
the ambit of the said will. The active participation and resistance of respondent Florence S. Ariola in the
ordinary civil action against the petitioner’s claim amounts to a waiver of the right to have the claim
presented in the probate proceedings, and to allow any one of the heirs who executed the joint agreement to
escape liability to pay the value of the tractors under consideration would be equivalent to allowing the said
heirs to enrich themselves to the damage and prejudice of the petitioner.
The petitioner, likewise, avers that the decisions of both the trial and appellate courts failed to consider the
fact that respondent Florence S. Ariola and her brother Edmund executed loan documents, all establishing
the vinculum jurisor the legal bond between the late Efraim Santibañez and his heirs to be in the nature of a
solidary obligation. Furthermore, the Promissory Notes dated May 31, 1980 and December 13, 1980
executed by the late Efraim Santibañez, together with his heirs, Edmund and respondent Florence, made the
obligation solidary as far as the said heirs are concerned. The petitioner also proffers that, considering the
express provisions of the continuing guaranty agreement and the promissory notes executed by the named
respondents, the latter must be held liable jointly and severally liable thereon. Thus, there was no need for
the petitioner to file its money claim before the probate court. Finally, the petitioner stresses that both
surviving heirs are being sued in their respective personal capacities, not as heirs of the deceased.
In her comment to the petition, respondent Florence S. Ariola maintains that the petitioner is trying to
recover a sum of money from the deceased Efraim Santibañez; thus the claim should have been filed with
the probate court. She points out that at the time of the execution of the joint agreement there was already an
existing probate proceedings of which the petitioner knew about. However, to avoid a claim in the probate
court which might delay payment of the obligation, the petitioner opted to require them to execute the said
agreement.1a\^/phi1.net
According to the respondent, the trial court and the CA did not err in declaring that the agreement was null
and void. She asserts that even if the agreement was voluntarily executed by her and her brother Edmund, it
should still have been subjected to the approval of the court as it may prejudice the estate, the heirs or third
parties. Furthermore, she had not waived any rights, as she even stated in her answer in the court a quo that
the claim should be filed with the probate court. Thus, the petitioner could not invoke or claim that she is in
estoppel.
Respondent Florence S. Ariola further asserts that she had not signed any continuing guaranty agreement,
nor was there any document presented as evidence to show that she had caused herself to be bound by the
obligation of her late father.
The petition is bereft of merit.
551
The Court is posed to resolve the following issues: a) whether or not the partition in the Agreement executed
by the heirs is valid; b) whether or not the heirs’ assumption of the indebtedness of the deceased is valid;
and c) whether the petitioner can hold the heirs liable on the obligation of the deceased.1awphi1.nét
At the outset, well-settled is the rule that a probate court has the jurisdiction to determine all the properties
of the deceased, to determine whether they should or should not be included in the inventory or list of
properties to be administered.20 The said court is primarily concerned with the administration, liquidation
and distribution of the estate.21
In our jurisdiction, the rule is that there can be no valid partition among the heirs until after the will has been
probated:
In testate succession, there can be no valid partition among the heirs until after the will has been probated.
The law enjoins the probate of a will and the public requires it, because unless a will is probated and notice
thereof given to the whole world, the right of a person to dispose of his property by will may be rendered
nugatory. The authentication of a will decides no other question than such as touch upon the capacity of the
testator and the compliance with those requirements or solemnities which the law prescribes for the validity
of a will.22
This, of course, presupposes that the properties to be partitioned are the same properties embraced in the
will.23 In the present case, the deceased, Efraim Santibañez, left a holographic will 24 which contained, inter
alia, the provision which reads as follows:
(e) All other properties, real or personal, which I own and may be discovered later after my demise, shall be
distributed in the proportion indicated in the immediately preceding paragraph in favor of Edmund and
Florence, my children.
We agree with the appellate court that the above-quoted is an all-encompassing provision embracing all the
properties left by the decedent which might have escaped his mind at that time he was making his will, and
other properties he may acquire thereafter. Included therein are the three (3) subject tractors. This being so,
any partition involving the said tractors among the heirs is not valid. The joint agreement25 executed by
Edmund and Florence, partitioning the tractors among themselves, is invalid, specially so since at the time
of its execution, there was already a pending proceeding for the probate of their late father’s holographic
will covering the said tractors.
It must be stressed that the probate proceeding had already acquired jurisdiction over all the properties of the
deceased, including the three (3) tractors. To dispose of them in any way without the probate court’s
approval is tantamount to divesting it with jurisdiction which the Court cannot allow. 26 Every act intended to
put an end to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it
should purport to be a sale, an exchange, a compromise, or any other transaction. 27 Thus, in executing any
joint agreement which appears to be in the nature of an extra-judicial partition, as in the case at bar, court
approval is imperative, and the heirs cannot just divest the court of its jurisdiction over that part of the estate.
Moreover, it is within the jurisdiction of the probate court to determine the identity of the heirs of the
decedent.28 In the instant case, there is no showing that the signatories in the joint agreement were the only
heirs of the decedent. When it was executed, the probate of the will was still pending before the court and
the latter had yet to determine who the heirs of the decedent were. Thus, for Edmund and respondent
Florence S. Ariola to adjudicate unto themselves the three (3) tractors was a premature act, and prejudicial to
the other possible heirs and creditors who may have a valid claim against the estate of the deceased.
The question that now comes to fore is whether the heirs’ assumption of the indebtedness of the decedent is
binding. We rule in the negative. Perusing the joint agreement, it provides that the heirs as parties thereto
"have agreed to divide between themselves and take possession and use the above-described chattel and
each of them to assume the indebtedness corresponding to the chattel taken as herein after stated which is in
favor of First Countryside Credit Corp."29 The assumption of liability was conditioned upon the happening
of an event, that is, that each heir shall take possession and use of their respective share under the
agreement. It was made dependent on the validity of the partition, and that they were to assume the
indebtedness corresponding to the chattel that they were each to receive. The partition being invalid as
earlier discussed, the heirs in effect did not receive any such tractor. It follows then that the assumption of This being the case, the petitioner’s personality to file the complaint is wanting. Consequently, it failed to
liability cannot be given any force and effect. establish its cause of action. Thus, the trial court did not err in dismissing the complaint, and the CA in
The Court notes that the loan was contracted by the decedent.l^vvphi1.net The petitioner, purportedly a affirming the same.
creditor of the late Efraim Santibañez, should have thus filed its money claim with the probate court in IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The assailed Court of Appeals
accordance with Section 5, Rule 86 of the Revised Rules of Court, which provides: Decision is AFFIRMED. No costs.
Section 5. Claims which must be filed under the notice. If not filed barred; exceptions. — All claims for SO ORDERED.
money against the decedent, arising from contract, express or implied, whether the same be due, not due, or
contingent, all claims for funeral expenses for the last sickness of the decedent, and judgment for money
against the decedent, must be filed within the time limited in the notice; otherwise they are barred forever,
except that they may be set forth as counterclaims in any action that the executor or administrator may bring
against the claimants. Where an executor or administrator commences an action, or prosecutes an action
already commenced by the deceased in his lifetime, the debtor may set forth by answer the claims he has
against the decedent, instead of presenting them independently to the court as herein provided, and mutual
claims may be set off against each other in such action; and if final judgment is rendered in favor of the
defendant, the amount so determined shall be considered the true balance against the estate, as though the
claim had been presented directly before the court in the administration proceedings. Claims not yet due, or
contingent, may be approved at their present value.
The filing of a money claim against the decedent’s estate in the probate court is mandatory. 30 As we held in
the vintage case of Py Eng Chong v. Herrera:31
… This requirement is for the purpose of protecting the estate of the deceased by informing the executor or
administrator of the claims against it, thus enabling him to examine each claim and to determine whether it
is a proper one which should be allowed. The plain and obvious design of the rule is the speedy settlement
of the affairs of the deceased and the early delivery of the property to the distributees, legatees, or heirs.
`The law strictly requires the prompt presentation and disposition of the claims against the decedent's estate
in order to settle the affairs of the estate as soon as possible, pay off its debts and distribute the residue. 32
Perusing the records of the case, nothing therein could hold private respondent Florence S. Ariola
accountable for any liability incurred by her late father. The documentary evidence presented, particularly
the promissory notes and the continuing guaranty agreement, were executed and signed only by the late
Efraim Santibañez and his son Edmund. As the petitioner failed to file its money claim with the probate
court, at most, it may only go after Edmund as co-maker of the decedent under the said promissory notes
and continuing guaranty, of course, subject to any defenses Edmund may have as against the petitioner. As
the court had not acquired jurisdiction over the person of Edmund, we find it unnecessary to delve into the
matter further.
We agree with the finding of the trial court that the petitioner had not sufficiently shown that it is the
successor-in-interest of the Union Savings and Mortgage Bank to which the FCCC assigned its assets and
liabilities.33 The petitioner in its complaint alleged that "by virtue of the Deed of Assignment dated August
20, 1981 executed by and between First Countryside Credit Corporation and Union Bank of the
Philippines…"34 However, the documentary evidence35 clearly reflects that the parties in the deed of
assignment with assumption of liabilities were the FCCC, and the Union Savings and Mortgage Bank, with
the conformity of Bancom Philippine Holdings, Inc. Nowhere can the petitioner’s participation therein as a
party be found. Furthermore, no documentary or testimonial evidence was presented during trial to show
that Union Savings and Mortgage Bank is now, in fact, petitioner Union Bank of the Philippines. As the trial
court declared in its decision:
… [T]he court also finds merit to the contention of defendant that plaintiff failed to prove or did not present
evidence to prove that Union Savings and Mortgage Bank is now the Union Bank of the Philippines.
Judicial notice does not apply here. "The power to take judicial notice is to [be] exercised by the courts with
caution; care must be taken that the requisite notoriety exists; and every reasonable doubt upon the subject
should be promptly resolved in the negative." (Republic vs. Court of Appeals, 107 SCRA 504). 36

552
 SECOND DIVISION
G.R. No. 189121 July 31, 2013
AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFER QUIAZON, Petitioners,
vs.
MA. LOURDES BELEN, for and in behalf of MARIA LOURDES ELISE QUIAZON, Respondent.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the Revised Rules of Court, primarily
assailing the 28 November 2008 Decision rendered by the Ninth Division of the Court of Appeals in CA-
G.R. CV No. 88589,1the decretal portion of which states:
WHEREFORE, premises considered, the appeal is hereby DENIED. The assailed Decision dated March 11,
2005, and the Order dated March 24, 2006 of the Regional Trial Court, Branch 275, Las Piñas City are
AFFIRMED in toto.2
The Facts
This case started as a Petition for Letters of Administration of the Estate of Eliseo Quiazon (Eliseo), filed by
herein respondents who are Eliseo’s common-law wife and daughter. The petition was opposed by herein
petitioners Amelia Garcia-Quaizon (Amelia) to whom Eliseo was married. Amelia was joined by her
children, Jenneth Quiazon (Jenneth) and Maria Jennifer Quiazon (Jennifer).
Eliseo died intestate on 12 December 1992.
On 12 September 1994, Maria Lourdes Elise Quiazon (Elise), represented by her mother, Ma. Lourdes
Belen (Lourdes), filed a Petition for Letters of Administration before the Regional Trial Court (RTC) of Las
Piñas City.3 In her Petition docketed as SP Proc. No. M-3957, Elise claims that she is the natural child of
Eliseo having been conceived and born at the time when her parents were both capacitated to marry each
other. Insisting on the legal capacity of Eliseo and Lourdes to marry, Elise impugned the validity of Eliseo’s
marriage to Amelia by claiming that it was bigamous for having been contracted during the subsistence of
the latter’s marriage with one Filipito Sandico (Filipito). To prove her filiation to the decedent, Elise, among
others, attached to the Petition for Letters of Administration her Certificate of Live Birth 4 signed by Eliseo
as her father. In the same petition, it was alleged that Eliseo left real properties worth ₱2,040,000.00 and
personal properties worth ₱2,100,000.00. In order to preserve the estate of Eliseo and to prevent the
dissipation of its value, Elise sought her appointment as administratrix of her late father’s estate.
Claiming that the venue of the petition was improperly laid, Amelia, together with her children, Jenneth and
Jennifer, opposed the issuance of the letters of administration by filing an Opposition/Motion to
Dismiss.5 The petitioners asserted that as shown by his Death Certificate, 6 Eliseo was a resident of Capas,
Tarlac and not of Las Piñas City, at the time of his death. Pursuant to Section 1, Rule 73 of the Revised
Rules of Court,7 the petition for settlement of decedent’s estate should have been filed in Capas, Tarlac and
not in Las Piñas City. In addition to their claim of improper venue, the petitioners averred that there are no
factual and legal bases for Elise to be appointed administratix of Eliseo’s estate.
In a Decision8 dated 11 March 2005, the RTC directed the issuance of Letters of Administration to Elise
upon posting the necessary bond. The lower court ruled that the venue of the petition was properly laid in
Las Piñas City, thereby discrediting the position taken by the petitioners that Eliseo’s last residence was in
Capas, Tarlac, as hearsay. The dispositive of the RTC decision reads:
Having attained legal age at this time and there being no showing of any disqualification or incompetence to
serve as administrator, let letters of administration over the estate of the decedent Eliseo Quiazon, therefore,
be issued to petitioner, Ma. Lourdes Elise Quiazon, after the approval by this Court of a bond in the amount
of ₱100,000.00 to be posted by her. 9
On appeal, the decision of the trial court was affirmed in toto in the 28 November 2008 Decision 10 rendered
by the Court of Appeals in CA-G.R.CV No. 88589. In validating the findings of the RTC, the Court of
Appeals held that Elise was able to prove that Eliseo and Lourdes lived together as husband and wife by
establishing a common residence at No. 26 Everlasting Road, Phase 5, Pilar Village, Las Piñas City, from
553
1975 up to the time of Eliseo’s death in 1992. For purposes of fixing the venue of the settlement of Eliseo’s
estate, the Court of Appeals upheld the conclusion reached by the RTC that the decedent was a resident of
Las Piñas City. The petitioners’ Motion for Reconsideration was denied by the Court of Appeals in its
Resolution11 dated 7 August 2009.
The Issues
The petitioners now urge Us to reverse the assailed Court of Appeals Decision and Resolution on the
following grounds:
I. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THAT ELISEO QUIAZON
WAS A RESIDENT OF LAS PIÑAS AND THEREFORE, THE PETITION FOR LETTERS OF
ADMINISTRATION WAS PROPERLY FILED WITH THE RTC OF LAS PIÑAS;
II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT AMELIA
GARCIA-QUIAZON WAS NOT LEGALLY MARRIED TO ELISEO QUIAZON DUE TO
PREEXISTING MARRIAGE; AND
III. THE COURT OF APPEALS OVERLOOKED THE FACT THAT ELISE QUIAZON HAS
NOT SHOWN ANY INTEREST IN THE PETITION FOR LETTERS OF ADMINISTRATION.12
The Court’s Ruling
We find the petition bereft of merit.
Under Section 1, Rule 73 of the Rules of Court, the petition for letters of administration of the estate of a
decedent should be filed in the RTC of the province where the decedent resides at the time of his death:
Sec. 1. Where estate of deceased persons settled. – If the decedent is an inhabitant of the Philippines at the
time of his death, whether a citizen or an alien, his will shall be proved, or letters of administration granted,
and his estate settled, in the Court of First Instance now Regional Trial Court in the province in which he
resides at the time of his death, and if he is an inhabitant of a foreign country, the Court of First Instance
now Regional Trial Court of any province in which he had estate. The court first taking cognizance of the
settlement of the estate of a decedent, shall exercise jurisdiction to the exclusion of all other courts. The
jurisdiction assumed by a court, so far as it depends on the place of residence of the decedent, or of the
location of his estate, shall not be contested in a suit or proceeding, except in an appeal from that court, in
the original case, or when the want of jurisdiction appears on the record. (Emphasis supplied).
The term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or
domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be interpreted
in the light of the object or purpose of the statute or rule in which it is employed. In the application of venue
statutes and rules – Section 1, Rule 73 of the Revised Rules of Court is of such nature – residence rather
than domicile is the significant factor.13Even where the statute uses word "domicile" still it is construed as
meaning residence and not domicile in the technical sense.14 Some cases make a distinction between the
terms "residence" and "domicile" but as generally used in statutes fixing venue, the terms are synonymous,
and convey the same meaning as the term "inhabitant."15In other words, "resides" should be viewed or
understood in its popular sense, meaning, the personal, actual or physical habitation of a person, actual
residence or place of abode.16 It signifies physical presence in a place and actual stay thereat.17 Venue for
ordinary civil actions and that for special proceedings have one and the same meaning. 18 As thus defined,
"residence," in the context of venue provisions, means nothing more than a person’s actual residence or
place of abode, provided he resides therein with continuity and consistency.19
Viewed in light of the foregoing principles, the Court of Appeals cannot be faulted for affirming the ruling
of the RTC that the venue for the settlement of the estate of Eliseo was properly laid in Las Piñas City. It is
evident from the records that during his lifetime, Eliseo resided at No. 26 Everlasting Road, Phase 5, Pilar
Village, Las Piñas City. For this reason, the venue for the settlement of his estate may be laid in the said
city.
In opposing the issuance of letters of administration, the petitioners harp on the entry in Eliseo’s Death
Certificate that he is a resident of Capas, Tarlac where they insist his estate should be settled. While the
recitals in death certificates can be considered proofs of a decedent’s residence at the time of his death, the
contents thereof, however, is not binding on the courts. Both the RTC and the Court of Appeals found that
Eliseo had been living with Lourdes, deporting themselves as husband and wife, from 1972 up to the time of
his death in 1995. This finding is consistent with the fact that in 1985, Eliseo filed an action for judicial
partition of properties against Amelia before the RTC of Quezon City, Branch 106, on the ground that their
marriage is void for being bigamous.20 That Eliseo went to the extent of taking his marital feud with Amelia
before the courts of law renders untenable petitioners’ position that Eliseo spent the final days of his life in
Tarlac with Amelia and her children. It disproves rather than supports petitioners’ submission that the lower
courts’ findings arose from an erroneous appreciation of the evidence on record. Factual findings of the trial
court, when affirmed by the appellate court, must be held to be conclusive and binding upon this Court. 21
Likewise unmeritorious is petitioners’ contention that the Court of Appeals erred in declaring Amelia’s
marriage to Eliseo as void ab initio. In a void marriage, it was though no marriage has taken place, thus, it
cannot be the source of rights. Any interested party may attack the marriage directly or collaterally. A void
marriage can be questioned even beyond the lifetime of the parties to the marriage. 22 It must be pointed out
that at the time of the celebration of the marriage of Eliseo and Amelia, the law in effect was the Civil Code,
and not the Family Code, making the ruling in Niñal v. Bayadog23 applicable four-square to the case at hand.
In Niñal, the Court, in no uncertain terms, allowed therein petitioners to file a petition for the declaration of
nullity of their father’s marriage to therein respondent after the death of their father, by contradistinguishing
void from voidable marriages, to wit:
Consequently, void marriages can be questioned even after the death of either party but voidable marriages
can be assailed only during the lifetime of the parties and not after death of either, in which case the parties
and their offspring will be left as if the marriage had been perfectly valid. That is why the action or defense
for nullity is imprescriptible, unlike voidable marriages where the action prescribes. Only the parties to a
voidable marriage can assail it but any proper interested party may attack a void marriage. 24
It was emphasized in Niñal that in a void marriage, no marriage has taken place and it cannot be the source
of rights, such that any interested party may attack the marriage directly or collaterally without prescription,
which may be filed even beyond the lifetime of the parties to the marriage.25
Relevant to the foregoing, there is no doubt that Elise, whose successional rights would be prejudiced by her
father’s marriage to Amelia, may impugn the existence of such marriage even after the death of her father.
The said marriage may be questioned directly by filing an action attacking the validity thereof, or
collaterally by raising it as an issue in a proceeding for the settlement of the estate of the deceased spouse,
such as in the case at bar. Ineluctably, Elise, as a compulsory heir, 26 has a cause of action for the declaration
of the absolute nullity of the void marriage of Eliseo and Amelia, and the death of either party to the said
marriage does not extinguish such cause of action.
Having established the right of Elise to impugn Eliseo’s marriage to Amelia, we now proceed to determine
whether or not the decedent’s marriage to Amelia is void for being bigamous.
Contrary to the position taken by the petitioners, the existence of a previous marriage between Amelia and
Filipito was sufficiently established by no less than the Certificate of Marriage issued by the Diocese of
Tarlac and signed by the officiating priest of the Parish of San Nicolas de Tolentino in Capas, Tarlac. The
said marriage certificate is a competent evidence of marriage and the certification from the National Archive
that no information relative to the said marriage exists does not diminish the probative value of the entries
therein. We take judicial notice of the fact that the first marriage was celebrated more than 50 years ago,
thus, the possibility that a record of marriage can no longer be found in the National Archive, given the
interval of time, is not completely remote. Consequently, in the absence of any showing that such marriage
had been dissolved at the time Amelia and Eliseo’s marriage was solemnized, the inescapable conclusion is
that the latter marriage is bigamous and, therefore, void ab initio. 27
Neither are we inclined to lend credence to the petitioners’ contention that Elise has not shown any interest
in the Petition for Letters of Administration.
Section 6, Rule 78 of the Revised Rules of Court lays down the preferred persons who are entitled to the
issuance of letters of administration, thus:
554
Sec. 6. When and to whom letters of administration granted. — If no executor is named in the will, or the
executor or executors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate,
administration shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion
of the court, or to such person as such surviving husband or wife, or next of kin, requests to have
appointed, if competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by
them, be incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty
(30) days after the death of the person to apply for administration or to request that administration
be granted to some other person, it may be granted to one or more of the principal creditors, if
competent and willing to serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to such other
person as the court may select.
Upon the other hand, Section 2 of Rule 79 provides that a petition for Letters of Administration must be
filed by an interested person, thus:
Sec. 2. Contents of petition for letters of administration. — A petition for letters of administration must be
filed by an interested person and must show, so far as known to the petitioner:
(a) The jurisdictional facts;
(b) The names, ages, and residences of the heirs, and the names and residences of the creditors, of
the decedent;
(c) The probable value and character of the property of the estate;
(d) The name of the person for whom letters of administration are prayed.
But no defect in the petition shall render void the issuance of letters of administration.
An "interested party," in estate proceedings, is one who would be benefited in the estate, such as an heir, or
one who has a claim against the estate, such as a creditor. Also, in estate proceedings, the phrase "next of
kin" refers to those whose relationship with the decedent Is such that they are entitled to share in the estate
as distributees.28
In the instant case, Elise, as a compulsory heir who stands to be benefited by the distribution of Eliseo’s
estate, is deemed to be an interested party. With the overwhelming evidence on record produced by Elise to
prove her filiation to Eliseo, the petitioners’ pounding on her lack of interest in the administration of the
decedent’s estate, is just a desperate attempt to sway this Court to reverse the findings of the Court of
Appeals. Certainly, the right of Elise to be appointed administratix of the estate of Eliseo is on good
grounds. It is founded on her right as a compulsory heir, who, under the law, is entitled to her legitimate
after the debts of the estate are satisfied.29 Having a vested right in the distribution of Eliseo’s estate as one
of his natural children, Elise can rightfully be considered as an interested party within the purview of the
law.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. Accordingly, the Court of
Appeals assailed 28 November 2008 Decision and 7 August 2009 Resolution, arc AFFIRMED in toto.
SO ORDERED.
 FIRST DIVISION
G.R. No. 150175 March 10, 2006
ERLINDA PILAPIL, HEIRS OF DONATA ORTIZ BRIONES, namely: ESTELA, ERIBERTO AND
VIRGILIO SANTOS, ANA SANTOS CULTURA, ELVIRA SANTOS INOCENTES, ERNESTO
MENDOZA, RIZALINA SANTOS, ADOLFO MENDOZA and PACITA MENDOZA, Petitioners,
vs.
HEIRS OF MAXIMINO R. BRIONES, namely: SILVERIO S. BRIONES, PETRA BRIONES,
BONIFACIO CABAHUG, JR., ANITA TRASMONTE, CIRILITA FORTUNA, CRESENCIA BRIONES,
FUGURACION MEDALLE and MERCEDES LAGBAS, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari, under Rule 45 of the Revised Rules of Court, seeking the
annulment and the setting aside of the Decision of the Court of Appeals in CA-GR CV No. 55194, dated 31
August 2001,1 affirming the decision of the Cebu City Regional Trial Court (RTC), Branch 17, in Civil Case
No. CEB-5794, dated 28 September 1986.2
Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting of her surviving sister,
Rizalina Ortiz-Aguila (Rizalina); Rizalina’s daughter, Erlinda Pilapil (Erlinda); and the other nephews and
nieces of Donata, in representation of her two other sisters who had also passed away. Respondents, on the
other hand, are the heirs of the late Maximino Briones (Maximino), composed of his nephews and nieces,
and grandnephews and grandnieces, in representation of the deceased siblings of Maximino.
The facts that gave rise to the petition at bar are recounted as follows.
Maximino was married to Donata but their union did not produce any children. When Maximino died on 1
May 1952, Donata instituted intestate proceedings to settle her husband’s estate with the Cebu City Court of
First Instance (CFI), 14th Judicial District, designated as Special Proceedings No. 928-R. On 8 July 1952,
the CFI issued Letters of Administration3 appointing Donata as the administratrix of Maximino’s estate. She
submitted an Inventory4 of Maximino’s properties, which included, among other things, the following
parcels of land –
1. Transfer Certificate of Title (TCT) No. RT-599, acquired by Maximino prior to his marriage
(now covered by TCT No. 21546);5
2. TCT No. RT-600, acquired by Maximino prior to his marriage (now covered by TCT No.
21545);6
3. TCT No. 220, acquired by Maximino during the marriage (now covered by TCT No. 21543); 7
4. TCT No. 221, acquired by Maximino during the marriage (now covered by TCT No.
21544);8 and
5. TCT No. 702, acquired by Maximino during the marriage (now covered by TCT No. 21542). 9
The CFI would subsequently issue an Order, dated 2 October 1952, awarding ownership of the
aforementioned real properties to Donata. On 27 June 1960, Donata had the said CFI Order recorded in the
Primary Entry Book of the Register of Deeds,10 and by virtue thereof, received new TCTs, covering the said
properties, now in her name.
Donata died on 1 November 1977. Erlinda, one of Donata’s nieces, instituted with the RTC a petition for the
administration of the intestate estate of Donata. Erlinda and her husband, Gregorio, were appointed by the
RTC as administrators of Donata’s intestate estate. Controversy arose among Donata’s heirs when Erlinda
claimed exclusive ownership of three parcels of land, covered by TCTs No. 21542, 21545, and 58684, based
on two Deeds of Donation, both dated 15 September 1977, 11 allegedly executed in her favor by her aunt
Donata. The other heirs of Donata opposed Erlinda’s claim. This Court, however, was no longer informed of
the subsequent development in the intestate proceedings of the estate of Donata; and as far as this Petition is
concerned, all the heirs of Donata, including Erlinda, appear to be on the same side.
On 21 January 1985, Silverio Briones (Silverio), a nephew of Maximino, filed a Petition 12 with the RTC for
Letters of Administration13 for the intestate estate of Maximino, which was initially granted by the RTC.
555
The RTC also issued an Order, dated 5 December 1985, allowing Silverio to collect rentals from
Maximino’s properties. But then, Gregorio filed with the RTC a Motion to Set Aside the Order, dated 5
December 1985, claiming that the said properties were already under his and his wife’s administration as
part of the intestate estate of Donata.14 Silverio’s Letters of Administration for the intestate estate of
Maximino was subsequently set aside by the RTC. 15
On 3 March 1987, the heirs of Maximino filed a Complaint 16 with the RTC against the heirs of Donata for
the partition, annulment, and recovery of possession of real property, docketed as Civil Case No. CEB-5794.
They later filed an Amended Complaint,17 on 11 December 1992. They alleged that Donata, as
administratrix of the estate of Maximino, through fraud and misrepresentation, in breach of trust, and
without the knowledge of the other heirs, succeeded in registering in her name the real properties belonging
to the intestate estate of Maximino.
In their Answer18 to the Complaint in Civil Case No. CEB-5794, the heirs of Donata raised, as affirmative
and special defenses, the following –
1. The complaint does not state a sufficient cause of action against the defendants;
2. That the titles to the lots in question were legally transferred to the name of the late Donata Ortiz
Briones since 1952 when the surviving heirs of Maximino Briones sold their rights over the said
properties to the late Donata Ortiz Briones;
3. That even granting arguendo that plaintiffs have the right to question the transfer to the name of
the late Donata Ortiz Briones the titles of the said lots any action of that effect has definitely
prescribed for more than 30 years have already occurred when the titles to said lots were
transferred to the name of the late Donata Ortiz Briones;
4. That moreover, even granting arguendo that there is an implied trust, an implied trust prescribed
in 10 years from the day titles to said lots have been transferred to the name of the late Donata
Ortiz Briones. Consequently, the plaintiff’s action to enforce an implied trust has definitely
prescribed;
5. Be that as it may, plaintiffs whose claim is merely in a representative capacity acquires no better
right or title than that of their predecessor-in-interest.
After trial in due course, the RTC rendered its Decision, dated 8 April 1986, in favor of the heirs of
Maximino,19pertinent portions thereof are reproduced below –
When Donata Ortiz Briones filed Special Proceedings No. 928-R she was fully aware of the existence of the
hereditary rights of the brothers and sisters of her husband Maximino S. Briones and their surviving heirs
and it was her duty to have informed the Court of such fact instead of asking the Court to have her declared
as the sole heir of her deceased husband in the alleged order mentioned by the defendants which was never
presented at the trial but was made the basis of the transfer of all the titles of the real properties left by
Maximino S. Briones to the name of Donata Ortiz Briones to the prejudice of the heirs of the brothers and
sisters of Maximino S. Briones.
xxxx
By having the immovable properties of the deceased Maximino S. Briones transferred in her name as the
sole heir of the said deceased despite her knowledge of the existence of other co-heirs like the plaintiffs,
Donata Ortiz Briones’s alleged ownership and possession of the subject properties in question was that of a
trustee in an implied trust under Article 1451 of the New Civil Code x x x.
xxxx
In the absence of partition of the estate of Maximino S. Briones all the properties left upon his death
remained owned in common by his heirs consisting of his surviving spouse and the heirs of his deceased
brothers and sisters the herein plaintiffs. Donata Ortiz Briones’s possession and transfer of the title in her
name of her late husband’s properties was no more than that of a co-owner and no prescription shall run in
favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly
recognizes the co-ownership (Last paragraph, Art. 494, New Civil Code). Such titles cannot be used as a
shield to perpetrate fraud.
 xxxx
Since the inventory filed by Donata Ortiz Briones (Exhibit B) has been adopted as Exhibit 3 by defendants
Erlinda Pilapil, Rizalina Ortiz Aguila and the Mendozas, said defendants are bound by the contents thereof.
Defendants, however, failed to show the order of the Court of First Instance of Cebu dated October 2, 1952
mentioned in the primary entry book (Exhibit 4) and marked as Exhibit 4-C, an omission which amounts to
suppression of evidence which is presumed adverse to the defendant’s interest when produced. This
supposed declaration of heirs declaring the late Donata O. Briones as the sole, absolute and exclusive heir of
the late Maximino S. Briones entered in the primary entry book in the office of the Register of Deeds of
Cebu City has been made thru Donata O. Briones’s misrepresentation to the Court as Administratrix of the
estate of her husband Maximino S. Briones by failing to honestly disclose to the Court that the decedent was
survived not only by his widow but also by his brothers and sisters and/or their children by right of
representation which fact was known to her at the time of her husband’s death.
Hence, the RTC declared that the heirs of Maximino were entitled to ½ of the real properties covered by
TCTs No. 21542, 21543, 21544, 21545, 21546, and 58684. It also ordered Erlinda to reconvey to the heirs
of Maximino the said properties and to render an accounting of the fruits thereof.
The heirs of Donata appealed the RTC Decision, dated 8 April 1986, to the Court of Appeals. The Court of
Appeals, in its Decision,20 promulgated on 31 August 2001, affirmed the RTC Decision, ratiocinating thus –
The contentions of defendants-appellants are devoid of merit.
At the outset, the proceeding for the issuance of letters of administration was invalid. Firstly, Donata did not
include in her petition for letters of administration the names, ages and residences of the heirs as required by
Rule 79, Section 2(b) of the Rules of Court. Secondly, the court failed to give notice to the known heirs that
a petition has been filed, and the time and place for hearing thereof as provided in Section 3 of the same
rule, to give them ample opportunity to oppose it, if warranted. Thirdly, the court failed to do its specific
duty to require proof, at the hearing of the petition, that the aforementioned notice has been given to the
heirs in accordance with Section 5 of the same rule.
Consequently, the Order declaring Donata as the sole and exclusive heir would not be binding against herein
plaintiffs-appellees.
xxxx
It should be noted that plaintiffs-appellees’ cause of action was not based merely on fraud but was primarily
anchored on their right to inheritance and to have a partition of the same, both of which are imprescriptible
as a general rule. With marked relevance is the fact that their Complaint is for Partition, Annulment and
Recovery of Possession of Real Property.
With respect to the argument on implied trust, We subscribe to the view that there existed an
implied/constructive trust where, through fraudulent representations or by pretending to be the sole heir of
the deceased, an heir succeeded in having the original title of a land in the name of the deceased cancelled
and a new one issued in his name thereby enabling him to possess the land and get its produce. [Baysa vs.
Baysa, [CA] 53 O.G. 7282, October 1957]
This being so, the trustee may claim title by prescription founded on adverse possession where it appears
that: (a) he has performed open and unequivocal acts of repudiation amounting to an ouster of the other co-
owners; (b) such positive acts of repudiation have been made known to the other co-owners; and (c) the
evidence thereon should be clear and convincing; and (d) the period fixed by law has prescribed. [De Leon,
Partnership, Agency and Trusts, 4th Edition, 1996]
These conditions were not complied with in the case at bench. Assuming arguendo that the issuance of the
TCT would constitute an open and clear repudiation of the trust, it is well to note however that the required
period has not yet elapsed. Article 1137 [New Civil Code] provides that, "ownership and other real rights
over immovables also prescribe through uninterrupted adverse possession thereof for thirty years, without
need of title or of good faith." This period should be counted from the date the adverse title was asserted,
that is, from the registration of the title. The TCTs covering the property in question were registered in 1960
or 27 years at the time of the filing of the Complaint in 1987.
556
Moreover, there is neither an adverse possession to speak of since Donata and the Heirs of Briones are
deemed co-owners of the property in question in accordance with Article 1078. [New Civil Code] Hence,
mere actual possession by Donata will not give rise to the inference that the possession was adverse. This is
because Donata after all is entitled to possession of the property as a co-owner.
xxxx
Furthermore, it is a well-entrenched jurisprudential rule that a co-owner may not acquire exclusive
ownership of common property thru prescription. [Castillo vs. Court of Appeals, L-18046, March 31, 1964]
xxxx
In determining whether a delay in seeking to enforce a right constitutes laches, the existence of a
confidential relationship between the parties is an important circumstance for consideration. The doctrine of
laches is not strictly applied between near relatives, and the fact that parties are connected by ties of blood or
marriage tends to excuse an otherwise unreasonable delay. [Gallardo vs. Intermediate Appellate Court, G.R.
No. 67742, 29 October 1987]
Unsatisfied with the afore-quoted Decision of the Court of Appeals, the heirs of Donata filed the present
Petition,21raising the following errors:
I. THAT THE COURT OF APPEALS ERRED IN NOT FINDING THE CASE AS HAVING BEEN
BARRED BY PRESCRIPTION;
II. THAT THE COURT OF APPEALS ERRED IN NOT FINDING THE CASE AS HAVING BEEN
BARRED BY LACHES; AND
III. THAT THE COURT OF APPEALS ERRED IN RULING THAT ALL THE PROPERTIES,
WHETHER CAPITAL PROPERTIES OF MAXIMINO OR CONJUGAL PROPERTIES OF MAXIMINO
AND DONATA BRIONES, BE DIVIDED EQUALLY BETWEEN PETITIONERS AND
RESPONDENTS.
Contrary to the conclusions of the Court of Appeals and the RTC in their respective Decisions, this Court
finds the Petition at bar meritorious and dismisses the Complaint for partition, annulment, and recovery of
possession of real property filed before the RTC by the heirs of Maximino in Civil Case No. CEB-5794. Not
only is the Complaint barred by prior judgment, the complainants therein, the heirs of Maximino, failed to
satisfactorily establish their right to the remedies prayed for therein.
Maximino left no will at the time of his death, on 1 May 1952, and his estate was to be settled in accordance
with the rules on legal or intestate succession. The heirs of Maximino, respondents in the Petition at bar,
claimed the right to inherit, together with Donata, from the estate of Maximino, based on the Articles 995
and 1001 of the New Civil Code, which read –
ART. 995. In the absence of legitimate descendants and ascendants, and illegitimate children and their
descendants, whether legitimate or illegitimate, the surviving spouse shall inherit the entire estate, without
prejudice to the rights of brothers and sisters, nephews and nieces, should there be any, under article 1001.
ART. 1001. Should brothers and sisters or their children survive with the widow or widower, the latter shall
be entitled to one-half of the inheritance and the brothers and sisters or their children to the other half.
The heirs of Maximino asserted that Donata had fraudulently excluded them from the intestate proceedings
of the estate of Maximino before the CFI . They were not given notice of the institution of Special
Proceedings No. 928-R and the scheduled hearings therein. When Donata was declared the "sole, absolute,
and exclusive heir" of Maximino in the CFI Order, dated 2 October 1952, and when she managed to have
the real properties of Maximino registered in her own name on the basis of the foregoing CFI Order, she
should be deemed to have held the said properties in trust for her other co-heirs.
The RTC in its Decision, dated 8 April 1986, justified its finding of implied trust on Article 1451 of the New
Civil Code, which provides that, "When land passes by succession to any person and he causes the legal title
to be put in the name of another, a trust is established by implication of law for the benefit of the true
owner." This Court, though, believes that Article 1451 is not applicable to the instant Petition considering
that it refers to a situation wherein the heir himself causes the registration of his legal title under the name of
another; the heir, by his voluntary action, establishes the implied trust and constitutes himself as the trustee.
In contrast, in the Petition herein, Donata managed to have the real properties belonging to the estate of
Maximino registered under her own name to the supposed exclusion of all other legal heirs of her deceased
husband. In such a case, implied trust may be more appropriately in accordance with Article 1456 of the
New Civil Code, which declares that, "If the property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from
whom the property comes."
Now the foremost question that needs to be answered is whether an implied trust under Article 1456 of the
New Civil Code had been sufficiently established in the instant Petition. This Court answers in the negative.
Since it was the respondents, heirs of Maximino, who claimed the existence of an implied trust, they bear
the burden of proving that Donata registered in her own name the real properties belonging to the estate of
Maximino either by fraud or mistake, pursuant to Article 1456 of the New Civil Code. The heirs of
Maximino never contended that Donata may have registered the real properties in her name by mistake, but
repeatedly maintain that she did so by fraud. Both the Court of Appeals and the RTC, in their respective
Decisions, found that Donata secured the CFI Order, dated 02 October 1952, and the new TCTs covering the
real properties in her name fraudulently.
While it is true that findings of fact of the Court of Appeals and the RTC are binding and conclusive upon
this Court, such is not absolute, and there are recognized exceptions thereto. This Court justifies its
departure from the general rule and the conduct of its own review of the evidence and other records in the
Petition at bar, given that (1) the factual conclusions of the Court of Appeals and the RTC are grounded
entirely on speculation, surmise and conjecture; (2) the inference made were manifestly mistaken; and (3)
the findings of fact of the Court of Appeals and the RTC are conclusions without citation of specific
evidence on which they are based.22
At the onset, it should be emphasized that Donata was able to secure the TCTs covering the real properties
belonging to the estate of Maximino by virtue of a CFI Order, dated 2 October 1952. It is undisputed that the
said CFI Order was issued by the CFI in Special Proceedings No. 928-R, instituted by Donata herself, to
settle the intestate estate of Maximino. The petitioners, heirs of Donata, were unable to present a copy of the
CFI Order, but this is not surprising considering that it was issued 35 years prior to the filing by the heirs of
Maximino of their Complaint in Civil Case No. CEB-5794 on 3 March 1987. The existence of such CFI
Order, nonetheless, cannot be denied. It was recorded in the Primary Entry Book of the Register of Deeds on
27 June 1960, at 1:10 p.m., as Entry No. 1714. 23 It was annotated on the TCTs covering the real properties
as having declared Donata the sole, absolute, and exclusive heir of Maximino. The non-presentation of the
actual CFI Order was not fatal to the cause of the heirs of Donata considering that its authenticity and
contents were never questioned. The allegation of fraud by the heirs of Maximino did not pertain to the CFI
Order, but to the manner or procedure by which it was issued in favor of Donata. Moreover, the non-
presentation of the CFI Order, contrary to the declaration by the RTC, does not amount to a willful
suppression of evidence that would give rise to the presumption that it would be adverse to the heirs of
Donata if produced.24 As this Court already expounded in the case of People v. Jumamoy25 –
x x x We reiterate the rule that the adverse presumption from a suppression of evidence is not applicable
when (1) the suppression is not willful; (2) the evidence suppressed or withheld is merely corroborative or
cumulative; (3) the evidence is at the disposal of both parties; and (4) the suppression is an exercise of a
privilege. Moreover, if the accused believed that the failure to present the other witnesses was because their
testimonies would be unfavorable to the prosecution, he should have compelled their appearance, by
compulsory process, to testify as his own witnesses or even as hostile witnesses.
If there is indeed a surviving copy of the CFI Order, dated 2 October 1952, then there is no reason to believe
that it would be exclusively available only to the heirs of Donata and not to the heirs of Maximino. It is
important to note that two of the documents relating to Special Proceedings No. 928-R, namely, (1) the
Letters of Administration issued in favor of Donata by the CFI, and (2) the Inventory submitted by Donata
to the CFI, were actually produced before the RTC in Civil Case No. CEB-5794 by the heirs of Maximino.
It only goes to show that the heirs of Maximino did have access to the records of Special Proceedings No.
557
928-R in which the CFI Order, dated 2 October 1952, was issued. If there was still a copy of the CFI Order,
dated 2 October 1952, in the records of Special Proceedings No. 928-R, and the contents of such Order were
truly adverse to the heirs of Donata, then it would have been more compelling for the heirs of Maximino to
present it before the RTC in Civil Case No. CEB-5794, with the aid of the appropriate court processes if
necessary.
The CFI Order, dated 2 October 1952, issued in Special Proceedings No. 928-R, effectively settled the
intestate estate of Maximino by declaring Donata as the sole, absolute, and exclusive heir of her deceased
husband. The issuance by the CFI of the said Order, as well as its conduct of the entire Special Proceedings
No. 928-R, enjoy the presumption of validity pursuant to the Section 3(m) and (n) of Rule 131 of the
Revised Rules of Court, reproduced below –
SEC. 3. Disputable presumptions. – The following presumptions are satisfactory if uncontradicted, but may
be contradicted and overcome by other evidence:
xxxx
(m) That official duty has been regularly performed;
(n) That a court, or judge acting as such, whether in the Philippines or elsewhere, was acting in the lawful
exercise of jurisdiction.
By reason of the foregoing provisions, this Court must presume, in the absence of any clear and convincing
proof to the contrary, that the CFI in Special Proceedings No. 928-R had jurisdiction of the subject matter
and the parties, and to have rendered a judgment valid in every respect; 26 and it could not give credence to
the following statements made by the Court of Appeals in its Decision 27 –
At the outset, the proceeding for the issuance of letters of administration was invalid. Firstly, Donata did not
include in her petition for letters of administration the names, ages and residences of the heirs as required by
Rule 79, Section 2(b) of the Rules of Court. Secondly, the court failed to give notice to the known heirs that
a petition has been filed, and the time and place for hearing thereof as provided in Section 3 of the same
rule, to give them ample opportunity to oppose it, if warranted. Thirdly, the court failed to do its specific
duty to require proof, at the hearing of the petition, that the aforementioned notice has been given to the
heirs in accordance with Section 5 of the same rule.
There was totally no evidentiary basis for the foregoing pronouncements. First of all, the Petition filed by
Donata for Letters of Administration in Special Proceedings No. 928-R before the CFI was not even referred
to nor presented during the course of the trial of Civil Case No. CEB-5794 before the RTC. How then could
the Court of Appeals make a finding that Donata willfully excluded from the said Petition the names, ages,
and residences of the other heirs of Maximino? Second, there was also no evidence showing that the CFI
actually failed to send notices of Special Proceedings No. 928-R to the heirs of Maximino or that it did not
require presentation of proof of service of such notices. It should be remembered that there stands a
presumption that the CFI Judge had regularly performed his duties in Special Proceedings No. 928-R, which
included sending out of notices and requiring the presentation of proof of service of such notices; and, the
heirs of Maximino did not propound sufficient evidence to debunk such presumption. They only made a
general denial of knowledge of Special Proceedings No. 928-R, at least until 1985. There was no testimony
or document presented in which the heirs of Maximino categorically denied receipt of notice from the CFI
of the pendency of Special Proceedings No. 928-R. The only evidence on record in reference to the absence
of notice of such proceedings was the testimony of Aurelia Briones (Aurelia), 28 one of the heirs of
Maximino, to wit –
Q When the husband of defendant Erlinda Pilapil was presented before this Court he testified that when the
late Donata Ortiz filed a petition to be declared sole heir according to him the brothers and sisters of the late
Maximino Briones were notified of the said hearing. What can you say about this, Ms. Witness?
A No, I don’t think they were notified. They would have contested their right to inherit their brother’s
property because he had no issue with his wife.
Q Likewise the same witness testified that at the time the petition was granted there was no opposition from
the heirs. What can you say about this, Ms. Witness?
A I don’t think they were notified because I know they will contest that declaration.
Aurelia’s testimony deserves scant credit considering that she was not testifying on matters within her
personal knowledge. The phrase "I don’t think" is a clear indication that she is merely voicing out her
opinion on how she believed her uncles and aunts would have acted had they received notice of Special
Proceedings No. 928-R.
In further support of their contention of fraud by Donata, the heirs of Maximino even emphasized that
Donata lived along the same street as some of the siblings of Maximino and, yet, she failed to inform them
of the CFI Order, dated 2 October 1952, in Special Proceedings No. 928-R, and the issuance in her name of
new TCTs covering the real properties which belonged to the estate of Maximino. This Court, however,
appreciates such information differently. It actually works against the heirs of Maximino. Since they only
lived nearby, Maximino’s siblings had ample opportunity to inquire or discuss with Donata the status of the
estate of their deceased brother. Some of the real properties, which belonged to the estate of Maximino,
were also located within the same area as their residences in Cebu City, and Maximino’s siblings could have
regularly observed the actions and behavior of Donata with regard to the said real properties. It is
uncontested that from the time of Maximino’s death on 1 May 1952, Donata had possession of the real
properties. She managed the real properties and even collected rental fees on some of them until her own
death on 1 November 1977. After Donata’s death, Erlinda took possession of the real properties, and
continued to manage the same and collect the rental fees thereon. Donata and, subsequently, Erlinda, were
so obviously exercising rights of ownership over the real properties, in exclusion of all others, which must
have already put the heirs of Maximino on guard if they truly believed that they still had rights thereto.
The heirs of Maximino knew he died on 1 May 1952. They even attended his wake. They did not offer any
explanation as to why they had waited 33 years from Maximino’s death before one of them, Silverio, filed a
Petition for Letters of Administration for the intestate estate of Maximino on 21 January 1985. After
learning that the intestate estate of Maximino was already settled in Special Proceedings No. 928-R, they
waited another two years, before instituting, on 3 March 1987, Civil Case No. CEB-5794, the Complaint for
partition, annulment and recovery of the real property belonging to the estate of Maximino. The heirs of
Maximino put off acting on their rights to the estate of Maximino for so long that when they finally did,
attributing fraud to Maximino’s wife, Donata, the latter had already passed away, on 1 November 1977, and
was no longer around to explain and defend herself. The delay of the heirs of Maximino is not without
consequence, as this Court explained in Ramos v. Ramos29 –
Parenthetically, it may be noted that the filing of the instant case long after the death of Jose Ramos and
other persons involved in the intestate proceeding renders it difficult to determine with certitude whether the
plaintiffs had really been defrauded - What Justice Street said in Sinco vs. Longa, 51 Phil. 507, 518-9 is
relevant to this case:
"In passing upon controversies of this character experience teaches the danger of accepting lightly charges
of fraud made many years after the transaction in question was accomplished, when death may have sealed
the lips of the principal actors and changes effected by time may have given a totally different color to the
cause of controversy. In the case before us the guardian, Emilio Tevez, is dead. The same is true of Trinidad
Diago, mother of the defendant Agueda Longa; while Agapito Longa is now living in Spain. It will be borne
in mind also that, insofar as oral proof is concerned, the charge of fraud rests principally on the testimony of
a single witness who, if fraud was committed, was a participant therein and who naturally would now be
anxious, so far as practicable, to put the blame on others. In this connection it is well to bear in mind the
following impressive language of Mr. Justice Story:
"x x x But length of time necessarily obscures all human evidence; and as it thus removes from the parties
all the immediate means to verify the nature of the original transactions, it operates by way of presumption,
in favor of innocence, and against imputation of fraud. It would be unreasonable, after a great length of
time, to require exact proof of all the minute circumstances of any transaction, or to expect a satisfactory
explanation of every difficulty, real or apparent, with which it may be encumbered. The most that can fairly
be expected, in such cases, if the parties are living, from the frailty of memory, and human infirmity, is, that
558
the material facts can be given with certainty to a common intent; and, if the parties are dead, and the cases
rest in confidence, and in parol agreements, the most that we can hope is to arrive at probable conjectures,
and to substitute general presumptions of law, for exact knowledge. Fraud, or breach of trust, ought not
lightly to be imputed to the living; for, the legal presumption is the other way; as to the dead, who are not
here to answer for themselves, it would be the height of injustice and cruelty, to disturb their ashes, and
violate the sanctity of the grave, unless the evidence of fraud be clear, beyond a reasonable doubt (Prevost
vs. Gratz, 6 Wheat. [U.S.], 481, 498)."
It is granted that the heirs of Maximino had rights to his intestate estate upon his death on 1 May 1952, by
virtue of Articles 995 and 1005 of the New Civil Code. Nonetheless, the CFI, in Special Proceedings No.
928-R, had declared Donata as the sole, absolute, and exclusive heir of Maximino in its Order, dated 2
October 1952. This Court, in the absence of evidence to the contrary, can only presume that Special
Proceedings No. 928-R was fair and regular, which would consequently mean that the CFI complied with
the procedural requirements for intestate proceedings such as publication and notice to interested parties,
and that the CFI had carefully reviewed and studied the claims of creditors, as well as the rights of heirs to
the estate, before issuing the Order, dated 2 October 1952. There is no showing that the Order, dated 2
October 1952, had been appealed and had, therefore, long attained finality, which even this Court would be
bound to respect. Without doubt, if the action for partition, annulment, and recovery of possession instituted
by the heirs of Maximino in Civil Case No. CEB-5794 succeeds, then, it would be a circumvention of the
finality of the CFI Order, dated 2 October 1952, in Special Proceedings No. 928-R, because, necessarily, a
recognition of the rights of the other heirs to the estate of Maximino would violate the sole, absolute, and
exclusive right of Donata to the same estate previously determined by the CFI. As this Court had discussed
in Ramos v. Ortuzar30 –
If we are to assume that Richard Hill and Marvin Hill did not formally intervene, still they would be
concluded by the result of the proceedings, not only as to their civil status but as the distribution of the estate
as well. As this Court has held in Manolo vs. Paredes, 47 Phil. 938, "The proceeding for probate is one in
rem (40 Cyc., 1265) and the court acquires jurisdiction over all persons interested, through the publication
of the notice prescribed by sec. 630 C. P. C.; and any order that may be entered therein is binding against
all of them." (See also in re Estate of Johnson, 39 Phil. 156) "A final order of distribution of the estate of a
deceased person vests the title to the land of the estate in the distributees." (Santos vs. Roman Catholic
Bishop of Nueva Caceres, 45 Phil. 895) There is no reason why, by analogy, these salutory doctrines should
not apply to intestate proceedings.
The only instance that we can think of in which a party interested in a probate proceeding may have a final
liquidation set aside is when he is left out by reason of circumstances beyond his control or through mistake
or inadvertence not imputable to negligence. Even then, the better practice to secure relief is reopening of
the same case by proper motion within the reglementary period, instead of an independent action the effect
of which, if successful, would be, as in the instant case, for another court or judge to throw out a decision or
order already final and executed and reshuffle properties long ago distributed and disposed of.
In summary, the heirs of Maximino failed to prove by clear and convincing evidence that Donata managed,
through fraud, to have the real properties, belonging to the intestate estate of Maximino, registered in her
name. In the absence of fraud, no implied trust was established between Donata and the heirs of Maximino
under Article 1456 of the New Civil Code. Donata was able to register the real properties in her name, not
through fraud or mistake, but pursuant to an Order, dated 2 October 1952, issued by the CFI in Special
Proceedings No. 928-R. The CFI Order, presumed to be fairly and regularly issued, declared Donata as the
sole, absolute, and exclusive heir of Maximino; hence, making Donata the singular owner of the entire estate
of Maximino, including the real properties, and not merely a co-owner with the other heirs of her deceased
husband. There being no basis for the Complaint of the heirs of Maximino in Civil Case No. CEB-5794, the
same should have been dismissed.
IN VIEW OF THE FOREGOING, the assailed Decision of the Court of Appeals in CA-GR CV No. 55194,
dated 31 August 2001, affirming the Decision of the Cebu City RTC in Civil Case No. CEB-5794, dated 28
September 1986, is hereby REVERSED and SET ASIDE; and the Complaint for partition, annulment, and
recovery of possession filed by the heirs of Maximino in Civil Case No. CEB-5794 is hereby DISMISSED.
SO ORDERED.

559
 EN BANC
A.M. No. P-01-1448 June 25, 2013
(Formerly OCA IPI No. 99-664-P)
RODOLFO C. SABIDONG, Complainant,
vs.
NICOLASITO S. SOLAS (Clerk of Court IV), Respondent.
DECISION
VILLARAMA, JR., J.:
The present administrative case stemmed from a sworn letter-complaint1 dated May 29, 1999 filed before
this Court by Rodolfo C. Sabidong (complainant) charging respondent Nicolasito S. Solas, Clerk of Court
IV, Municipal Trial Court in Cities (MTCC), Iloilo City with grave and serious misconduct, dishonesty,
oppression and abuse of authority.
The Facts
Trinidad Sabidong, complainant’s mother, is one of the longtime occupants of a parcel of land, designated as
Lot 11 (Lot 1280-D-4-11 of consolidation-subdivision plan [LRC] Pcs-483) originally registered in the
name of C. N. Hodges and situated at Barangay San Vicente, Jaro, Iloilo City. 2 The Sabidongs are in
possession of one-half portion of Lot 11 of the said Estate (Hodges Estate), as the other half-portion was
occupied by Priscila Saplagio. Lot 11 was the subject of an ejectment suit filed by the Hodges Estate,
docketed as Civil Case No. 14706 of the MTCC Iloilo City, Branch 4 ("Rosita R. Natividad in her capacity
as Administratrix of C.N. Hodges Estate, plaintiff vs. Priscila Saplagio, defendant"). On May 31, 1983, a
decision was rendered in said case ordering the defendant to immediately vacate the portion of Lot 11 leased
to her and to pay the plaintiff rentals due, attorney’s fees, expenses and costs. 3 At the time, respondent was
the Clerk of Court III of MTCC, Branch 3, Iloilo City.
Sometime in October 1984, respondent submitted an Offer to Purchase on installment Lots 11 and 12. In a
letter dated January 7, 1986, the Administratrix of the Hodges Estate rejected respondent’s offer in view of
an application to purchase already filed by the actual occupant of Lot 12, "in line with the policy of the
Probate Court to give priority to the actual occupants in awarding approval of Offers". While the check for
initial down payment tendered by respondent was returned to him, he was nevertheless informed that he may
file an offer to purchase Lot 11 and that if he could put up a sufficient down payment, the Estate could
immediately endorse it for approval of the Probate Court so that the property can be awarded to him "should
the occupant fail to avail of the priority given to them."4
The following day, January 8, 1986, respondent again submitted an Offer to Purchase Lot 11 with an area of
234 square meters for the amount of ₱35,100. Under the Order dated November 18, 1986 issued by the
probate court (Regional Trial Court of Iloilo, Branch 27) in Special Proceedings No. 1672 ("Testate Estate
of the Late Charles Newton Hodges, Rosita R. Natividad, Administratrix"), respondent’s Offer to Purchase
Lot 11 was approved upon the court’s observation that the occupants of the subject lots "have not
manifested their desire to purchase the lots they are occupying up to this date and considering time restraint
and considering further, that the sales in favor of the x x x offerors are most beneficial to the estate x x x".
On January 21, 1987, the probate court issued another Order granting respondent’s motion for issuance of a
writ of possession in his favor. The writ of possession over Lot 11 was eventually issued on June 27, 1989. 5
On November 21, 1994, a Deed of Sale With Mortgage covering Lot 11 was executed between respondent
and the Hodges Estate represented by its Administratrix, Mrs. Ruth R. Diocares. Lot 11 was thereby
conveyed to respondent on installment for the total purchase price of ₱50,000.
Consequently, Transfer Certificate of Title (TCT) No. T-11836 in the name of C. N. Hodges was cancelled
and a new certificate of title, TCT No. T-107519 in the name of respondent was issued on December 5,
1994. Lot 11 was later subdivided into two lots, Lots 11-A and 11-B for which the corresponding titles
(TCT Nos. T-116467 and T-116468), also in the name of respondent, were issued on February 28, 1997. 6
On motion of Ernesto Pe Benito, Administrator of the Hodges Estate, a writ of demolition was issued on
March 3, 1998 by the probate court in favor of respondent and against all adverse occupants of Lot 11. 7
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On June 14, 1999, this Court received the sworn letter-complaint asserting that as court employee
respondent cannot buy property in litigation (consequently he is not a buyer in good faith), commit
deception, dishonesty, oppression and grave abuse of authority. Complainant specifically alleged the
following:
3. Complainant and his siblings, are possessors and occupants of a parcel of land situated at Brgy.
San Vicente, Jaro, Iloilo City, then identified as Lot No. 1280-D-4-11, later consolidated and
subdivided and became known as Lot 11, then registered and titled in the name of Charles Newton
Hodges. The Sabidong family started occupying this lot in 1948 and paid their monthly rentals
until sometime in 1979 when the Estate of Hodges stopped accepting rentals. x x x
4. Upon knowing sometime in 1987 that the property over which their house is standing, was being
offered for sale by the Estate, the mother of complainant, TRINIDAD CLAVERIO SABIDONG
(now deceased), took interest in buying said property, Lot 11;
5. TRINIDAD CLAVERIO SABIDONG, was then an ordinary housekeeper and a laundrywoman,
who never received any formal education, and did not even know how to read and write. When
Trinidad Claverio Sabidong, together with her children and the complainant in this case, tried to
negotiate with the Estate for the sale of the subject property, they were informed that all papers for
transaction must pass through the respondent in this case, Nicolasito Solas. This is unusual, so they
made inquiries and they learned that, Nicolasito Solas was then the Clerk of Court 111, Branch 3,
Municipal Trial Court in Cities, Iloilo City and presently, the City Sheriff of Iloilo City;
6. The respondent Nicolasito Solas, then Clerk of Court III, MTCC, Iloilo City, has knowledge, by
reason of his position that in 1983 Hodges Estate was ejecting occupants of its land. x x x Taking
advantage of this inside information that the land subject of an ejectment case in the Municipal
Trial Court in Cities, Iloilo City, whom respondent is a Clerk of Court III, the respondent
surreptitiously offered to buy the said lot in litigation. x x x
7. Complainant nor any member of his family did not know that as early as 1984, the respondent
had offered to purchase the subject lot from the estate x x x. After receiving the notice of denial of
his offer to purchase, dated January 7, 1986, respondent made a second offer to purchase the
subject property the following day, January 8, 1986, knowing fully well that the subject property
was being occupied. x x x
8. Because of this denial, respondent met with the family of the complainant and negotiated for the
sale of the property and transfer of the title in favor of the latter. Respondent made the complainant
and his family believed that he is the representative of the estate and that he needed a
downpayment right away. All the while, the Sabidong family (who were carpenters,
laundrywomen, a janitor, persons who belong to the underprivileged) relied on the representations
of the respondent that he was authorized to facilitate the sale, with more reason that respondent
represented himself as the City Sheriff;
9. That between 1992-1993, a sister of the complainant who was fortunate to have worked abroad,
sent the amount of Ten Thousand (₱10,000.00) Pesos to complainant’s mother, to be given to
respondent Nicolasito Solas. x x x After receiving the money, respondent assured the Sabidong
family that they will not be ejected from the lot, he being the City Sheriff will take care of
everything, and taking advantage of the illiteracy of Trinidad Claverio Sabidong, he did not issue
any receipt;
10. True enough, they were not ejected instead it took the respondent some time to see them again
and demanded additional payment. In the meanwhile, the complainant waited for the papers of the
supposed sale and transfer of title, which respondent had promised after receiving the
downpayment of ₱10,000.00;
11. That sometime again in 1995, respondent again received from the mother of complainant the
amount of Two Thousand (₱2,000.00) Pesos, allegedly for the expenses of the documentation of
sale and transfer of title, and again respondent promised that the Sabidong family will not be
ejected;
12. To the prejudice and surprise of the complainant and his family, respondent was able to secure
an order for the approval of his offer to purchase x x x in Special Proceedings No. 1672 x x x;
13. Worse, respondent moved for the issuance of a Writ of Possession in his favor, which the
probate court acted favorably x x x. A writ of possession was issued on June 27, 1989 x x x;
14. x x x respondent took advantage of the trust and confidence which the Sabidong family has
shown, considering that respondent was an officer of the court and a City Sheriff at that. The
complainant and his family thought that respondent, being a City Sheriff, could help them in the
transfer of the title in their favor. Never had they ever imagined that while respondent had been
receiving from them hard-earned monies purportedly for the sale of the subject property,
respondent was also exercising acts of ownership adverse to the interest of the complainant and his
family;
15. Being an officer of the court and supposed to be an embodiment of fairness and justice,
respondent acted with malice, with grave abuse of confidence and deceit when he represented that
he can facilitate the sale and titling of the subject property in favor of the complainant and his
family;
16. That when several thousands of pesos were given to the respondent as payment for the same
and incidental expenses relative thereto, he was able to cause the transfer of the title in his favor. x
x x;
17. After the death of Trinidad Claverio Sabidong x x x the respondent received from the
complainant the amount of Five Thousand (₱5,000.00) Pesos x x x When a receipt was demanded,
respondent refused to issue one, and instead promised and assured the complainant that they will
not be ejected;
xxxx
19. The complainant again, through his sister-in-law, Socorro Sabidong, delivered and gave to the
respondent the amount of Three Thousand (₱3,000.00) Pesos as expenses for the subdivision of the
subject lot. The respondent facilitated the subdivision and after the same was approved, the
complainant did not know that two (2) titles were issued in the name of the respondent. x x x;
20. Meanwhile, respondent prepared a Contract to Sell, for the complainant and his neighbor
Norberto Saplagio to affix their signatures, pursuant to their previous agreement for the buyers to
avail of a housing loan with the Home Development Mutual Fund (PAG-IBIG). Complainant
attended the seminar of the HDMF for seven (7) times, in his desire to consummate the sale.
However, when the complainant affixed his signature in the contract, he was surprised that the
owner of the subject property was the respondent. When complainant raised a question about this,
respondent assured complainant that everything was alright and that sooner complainant will be
the owner of the property. Complainant and his family, all these years, had believed and continued
to believe that the owner was the estate of Hodges and that respondent was only the representative
of the estate;
21. The Contract to Sell, appeared to have been notarized on June 3, 1996, however, no copy
thereof was given to the complainant by the respondent. Respondent then, took the papers and
documents required by the HDMF to be completed, from the complainant allegedly for the purpose
of personally filing the same with the HDMF. Complainant freely and voluntarily delivered all
pertinent documents to the respondent, thinking that respondent was helping in the fast and easy
release of the loan. While the said documents were in the possession of the respondent, he never
made any transaction with the HDMF, worse, when complainant tried to secure a copy of the
Contract to Sell, the copy given was not signed by the Notary Public, x x x;
22. The complainant [was] shocked to learn that respondent had canceled the sale and that
respondent refused to return the documents required by the HDMF. Respondent claimed that as
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Sheriff, he can cause the demolition of the house of the complainant and of his family. Respondent
threatened the complainant and he is capable of pursuing a demolition order and serve the same
with the assistance of the military. x x x;
23. After learning of the demolition order, complainant attempted to settle the matter with the
respondent, however, the same proved futile as respondent boasted that the property would now
cost at Four Thousand Five Hundred (₱4,500.00) Pesos;
24. The threats of demolition is imminent. Clearly, complainant and his family were duped by the
respondent and are helpless victims of an officer of the court who took advantage of their good
faith and trust. Complainant later was informed that the subject property was awarded to the
respondent as his Sheriff’s Fees, considering that respondent executed the decisions in ejectment
cases filed by the Hodges estate against the adverse occupants of its vast properties;
25. A civil case for the Annulment of Title of the respondent over the subject property is pending
before the Regional Trial Court of Iloilo, Branch 37 and a criminal complaint for Estafa is also
pending preliminary investigation before the Office of the City Prosecutor of Iloilo City, known as
I.S. No. 1559-99, both filed [by] the complainant against the respondent.8
Acting on the complaint, Court Administrator Alfredo L. Benipayo issued a 1st Indorsement 9 dated July 8,
1999, requiring respondent to file his comment on the Complaint dated May 29, 1999. On October 21, 1999,
respondent submitted his Comment.10
In a Resolution11 dated July 19, 1999, Public Prosecutor Constantino C. Tubilleja dismissed the Estafa
charge against respondent for insufficiency of evidence.
On November 29, 2000, Court Administrator Benipayo issued an Evaluation and Recommendation 12 finding
respondent guilty of violating Article 149113 of the Civil Code. Said rule prohibits the purchase by certain
court officers of property and rights in litigation within their jurisdiction. Court Administrator Benipayo
recommended that:
1. this administrative complaint be treated as an administrative matter;
2. respondent Nicolasito S. Solas, Clerk of Court IV, OCC, MTCC, Iloilo City be SUSPENDED
for six (6) months, with warning that a repetition of the same offense in the future will be dealt
with more severely;
3. inasmuch as there are factual issues regarding the delivery of substantial amounts which
complainant alleged and which defendant denied, this issue should be investigated and the
Executive Judge of the Regional Trial Court of Iloilo City should be designated to hear the
evidence and to make a report and recommendation within sixty (60) days from receipt. 14
In a Resolution15 dated January 22, 2001, this Court adopted the recommendation of the Court Administrator
to treat the present administrative action as a regular administrative matter and to designate the Executive
Judge of the RTC of Iloilo City to hear the evidence of the parties.
The Court, however, noted without action the Court Administrator’s recommendation to suspend respondent
for six months.
On March 13, 2001, Acting Court Administrator Zenaida N. Elepaño forwarded the records of this case to
Executive Judge Tito G. Gustilo of the Iloilo City RTC.16 In a Resolution17 dated July 18, 2001, the Court
referred this case to the Executive Judge of the RTC of Iloilo City for investigation, report and
recommendation within 60 days from notice. By Order18 dated August 30, 2001, Executive Judge Gustilo set
the case for reception of evidence.
On March 19, 2004, the RTC of Iloilo, Branch 37, dismissed the case for annulment of title, damages and
injunction against respondent for lack of merit.19
In a Resolution20 dated June 15, 2005, the Court resolved to reassign the instant administrative case to
Executive Judge Rene S. Hortillo for investigation, report and recommendation within 60 days from notice.
In a Letter21 dated September 15, 2005, Executive Judge Hortillo informed the Court that per the records, the
parties have presented their testimonial and documentary evidence before retired Executive Judge Tito G.
Gustilo.
On September 12, 2005, Executive Judge Hortillo required the parties to file their respective memoranda
within 60 days from notice, upon submission of which the case shall be deemed submitted for resolution. 22
In his Memorandum,23 respondent maintained that his purchase of the subject land is not covered by the
prohibition in paragraph 5, Article 1491 of the Civil Code. He pointed out that he bought Lot 11-A a decade
after the MTCC of Iloilo, Branch 3, had ordered the ejectment of Priscila Saplagio and Trinidad Sabidong
from the subject lot. He insisted that public trust was observed when complainant was accorded his right of
first refusal in the purchase of Lot 11-A, albeit the latter failed to avail said right. Asserting that he is a buyer
in good faith and for value, respondent cited the dismissal of the cases for Estafa and annulment of title and
damages which complainant filed against him.
On September 10, 2007, respondent compulsorily retired from service. Prior to this, he wrote then Senior
Deputy Court Administrator Zenaida N. Elepaño, requesting for the release of his retirement benefits
pending resolution of the administrative cases against him.24 In a Memorandum25 dated September 24, 2007,
Senior Deputy Court Administrator Elepaño made the following recommendations:
a) The request of Nicolasito S. Solas, former Clerk of Court, MTCC, Iloilo City for partial release
of his retirement benefits be GRANTED; and
b) Atty. Lilian Barribal Co, Chief, Financial Management Office, Office of the Court
Administrator be DIRECTED to (1) WITHHOLD the amount of Two Hundred Thousand Pesos
(₱200,000.00) from the retirement benefits of Nicolasito S. Solas to answer for any administrative
liability that the Court may find against him in A.M. No. P-01-1448 (Formerly Administrative
Matter OCA IPI No. 99-664-P); OCA IPI No. 99-659-P; OCA IPI No. 99-670-P; and OCA IPI No.
99-753-P; and (2) RELEASE the balance of his retirement benefits.26
Eventually, the case was assigned to Judge Roger B. Patricio, the new Executive Judge of the Iloilo City
RTC for investigation, report and recommendation.
On June 2, 2008, Judge Patricio submitted his final Report and Recommendation 27 finding respondent liable
for grave misconduct and dishonesty under A.M. No. 03-06-13-SC or the Code of Conduct for Court
Personnel. Based on the evidence presented, Judge Patricio concluded that respondent misappropriated the
money which he received for the filing of complainant’s loan application. Such money could not have been
used for the partition of Lot No. 1280-D-4-11 since the same was already subdivided into Lots 11-A and 11-
B when respondent presented the Contract to Sell to complainant. And despite respondent’s promise to keep
complainant and his family in peaceful possession of the subject property, respondent caused the issuance of
a writ of demolition against them. Thus, Judge Patricio recommended the forfeiture of respondent’s salary
for six months to be deducted from his retirement benefits.
In a Resolution28 dated September 29, 2008, the Court noted Judge Patricio’s Investigation Report and
referred the same to the Office of the Court Administrator (OCA) for evaluation, report and
recommendation.
Findings and Recommendation of the OCA
In a Memorandum29 dated January 16, 2009, then Court Administrator Jose P. Perez found respondent liable
for serious and grave misconduct and dishonesty and recommended the forfeiture of respondent’s salary for
six months, which shall be deducted from his retirement benefits.
The Court Administrator held that by his unilateral acts of extinguishing the contract to sell and forfeiting
the amounts he received from complainant and Saplagio without due notice, respondent failed to act with
justice and equity. He found respondent’s denial to be anchored merely on the fact that he had not issued
receipts which was belied by his admission that he had asked money for the expenses of partitioning Lot 11
from complainant and Saplagio. Since their PAG-IBIG loan applications did not materialize, complainant
should have returned the amounts given to him by complainant and Saplagio.
On February 11, 2009, the Court issued a Resolution 30 requiring the parties to manifest whether they are
willing to submit the case for decision on the basis of the pleadings and records already filed with the Court.
However, the copy of the Resolution dated February 11, 2009 which was sent to complainant was returned
unserved with the postal carrier’s notation "RTS-Deceased." Meanwhile, in a Compliance31 dated August
562
24, 2009, respondent expressed his willingness to submit the case for decision and prayed for an early
resolution of the case.
Our Ruling
Article 1491, paragraph 5 of the Civil Code prohibits court officers such as clerks of court from acquiring
property involved in litigation within the jurisdiction or territory of their courts. Said provision reads:
Article 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either
in person or through the mediation of another:
xxxx
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and
employees connected with the administration of justice, the property and rights in litigation or levied upon
an execution before the court within whose jurisdiction or territory they exercise their respective functions;
this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in which they may take part by virtue of their
profession.
x x x x (Emphasis supplied.)
The rationale advanced for the prohibition is that public policy disallows the transactions in view of the
fiduciary relationship involved, i.e., the relation of trust and confidence and the peculiar control exercised by
these persons.32"In so providing, the Code tends to prevent fraud, or more precisely, tends not to give
occasion for fraud, which is what can and must be done." 33
For the prohibition to apply, the sale or assignment of the property must take place during the pendency of
the litigation involving the property.34 Where the property is acquired after the termination of the case, no
violation of paragraph 5, Article 1491 of the Civil Code attaches.35
In the case at bar, when respondent purchased Lot 11-A on November 21, 1994, the Decision in Civil Case
No. 14706 which was promulgated on May 31, 1983 had long become final. Be that as it may, it can not be
said that the property is no longer "in litigation" at that time considering that it was part of the Hodges Estate
then under settlement proceedings (Sp. Proc. No. 1672).
A thing is said to be in litigation not only if there is some contest or litigation over it in court, but also from
the moment that it becomes subject to the judicial action of the judge.36 A property forming part of the estate
under judicial settlement continues to be subject of litigation until the probate court issues an order declaring
the estate proceedings closed and terminated. The rule is that as long as the order for the distribution of the
estate has not been complied with, the probate proceedings cannot be deemed closed and terminated. 37 The
probate court loses jurisdiction of an estate under administration only after the payment of all the debts and
the remaining estate delivered to the heirs entitled to receive the same.38 Since there is no evidence to show
that Sp. Proc. No. 1672 in the RTC of Iloilo, Branch 27, had already been closed and terminated at the time
of the execution of the Deed of Sale With Mortgage dated November 21, 1994, Lot 11 is still deemed to be
"in litigation" subject to the operation of Article 1491 (5) of the Civil Code.
This notwithstanding, we hold that the sale of Lot 11 in favor of respondent did not violate the rule on
disqualification to purchase property because Sp. Proc. No. 1672 was then pending before another court
(RTC) and not MTCC where he was Clerk of Court.
On the charges against the respondent, we find him liable for dishonesty and grave misconduct.
Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful
behavior as well as gross negligence by a public officer. To warrant dismissal from service, the misconduct
must be grave, serious, important, weighty, momentous and not trifling. The misconduct must imply
wrongful intention and not a mere error of judgment. The misconduct must also have a direct relation to and
be connected with the performance of the public officer’s official duties amounting either to
maladministration or willful, intentional neglect, or failure to discharge the duties of the office.39
Dishonesty is the "disposition to lie, cheat, deceive, defraud or betray; untrustworthiness; lack of integrity;
lack of honesty, probity, or integrity in principle; and lack of fairness and straightforwardness." 40
In this case, respondent deceived complainant’s family who were led to believe that he is the legal especially the poor and the underprivileged.1âwphi1 They shall at all times respect the rights of others, and
representative of the Hodges Estate, or at least possessed of such power to intercede for overstaying shall refrain from doing acts contrary to law, good morals, good customs, public policy, public order, public
occupants of the estate’s properties like complainant. Boasting of his position as a court officer, a City safety and public interest.
Sheriff at that, complainant’s family completely relied on his repeated assurance that they will not be ejected Under Section 52,51 Rule IV of the Uniform Rules on Administrative Cases in the Civil Service, dishonesty
from the premises. Upon learning that the lot they were occupying was for sale and that they had to and grave misconduct are classified as grave offenses with the corresponding penalty of dismissal for the
negotiate for it through respondent, complainant’s family readily gave the amounts he demanded and, along first offense. Section 58(a) states that the penalty of dismissal shall carry with it the cancellation of
with Saplagio, complied with the requirements for a loan application with PAG-IBIG. All the while and eligibility, forfeiture of retirement benefits, and the perpetual disqualification for reemployment in the
unknown to complainant’s family, respondent was actually working to acquire Lot 11 for himself. government service.
Thus, while respondent was negotiating with the Hodges Estate for the sale of the property to him, he Section 53 further provides that mitigating circumstances attendant to the commission of the offense should
collected as down payment ₱5,000 from complainant’s family in July 1986. Four months later, on be considered in the determination of the penalty to be imposed on the erring government employee.
November 18, 1986, the probate court approved respondent’s offer to purchase Lot 11. The latter received However, no such mitigating circumstance had been shown. On the contrary, respondent had been
further down payment from complainant in the amount of ₱10,000 between 1992 and 1993, or before the previously held administratively liable for irregularities in the performance of his duties as Clerk of Court.
Deed of Sale with Mortgage41 dated November 21, 1994 could be executed in respondent’s favor. In A.M. No. P-01-1484,52 this Court imposed on respondent a fine of ₱5,000 for acting imprudently in
Thereafter, respondent demanded ₱3,000 from complainant supposedly for the subdivision of Lot 11 notarizing documents and administering oath on matters alien to his official duties. And in A.M. Nos. P-08-
between the latter and the Saplagios. Yet, it was not until respondent obtained title over said lot that the 2567 (formerly OCA IPI No. 99-670-P) and P-08-2568 (formerly OCA IPI No. 99-753-P),53 respondent was
same was subdivided into Lots 11-A and 11-B. The records42 of the case show that the Subdivision Plan found liable for simple misconduct and ordered to pay a fine equivalent to his three (3) months salary to be
dated April 25, 1996, duly approved by the Land Management Services (DENR) subdividing Lot 11 into deducted from his retirement benefits.
sublots 11-A and 11-B, was inscribed on February 28, 1997 – two years after TCT No. T-107519 covering Since respondent had compulsorily retired from service on September 10, 2007, for this additional
Lot 11 was issued in respondent’s name on December 5, 1994. administrative case he should be fined in an amount equivalent to his salary for six months which shall
Finally, in 1995, respondent received the amount of ₱2,000 to defray the expenses for documentation and likewise be deducted from his retirement benefits.
transfer of title in complainant’s name. In the latter instance, while it may be argued that respondent already WHEREFORE, the Court finds respondent Nicolasito S. Solas, retired Clerk of Court IV, Municipal Trial
had the capacity to sell the subject property, the sum of all the circumstances belie an honest intention on his Court in Cities, Iloilo City, LIABLE FOR GRAVE MISCONDUCT AND DISHONESTY. Respondent is
part to convey Lot 11-A to complainant. We note the inscription in TCT No. T-1183643 in the name of C.N. FINED in an amount equivalent to his salary for six (6) months to be deducted from his retirement benefits.
Hodges that respondent executed a Request dated February 19, 1997 "for the issuance of separate titles in SO ORDERED.
the name of the registered owner."44 Soon after, TCT No. T-11646745 covering Lot 11-A and TCT No. T-
11646846 covering Lot 11-B were issued in the name of respondent on February 28, 1997 – only eight
months after he executed the Contract to Sell47 in favor of complainant on June 3, 1996.
Respondent’s bare denials were correctly disregarded by the Court Administrator in the light of his own
admission that he indeed asked money from both complainant and Saplagio. The evidence on record clearly
established that by misrepresenting himself as the estate’s representative and as a court officer having the
power to protect complainant’s family from eviction, respondent was able to collect sums totaling ₱20,000
from complainant’s family. Even after the latter realized they were duped since respondent was already the
owner of Lot 11, they still offered to buy the property from him. Respondent, however, changed his mind
and no longer wanted to sell the property after nothing happened to the loan applications of complainant and
Saplagio. This subsequent unilateral cancellation by respondent of the contract to sell with complainant may
have been an afterthought, and plainly unjustified, based merely on his own assumption that complainant
could not make full payment. But it did not negate the deception and fraudulent acts perpetrated against
complainant’s family who were forced into submission by the constant threat of eviction. Such acts
constitute grave misconduct for which respondent should be held answerable.
In Re: Complaint Filed by Paz De Vera Lazaro Against Edna Magallanes, Court Stenographer III, RTC Br.
28 and Bonifacio G. Magallanes, Process Server, RTC Br. 30, Bayombong, Nueva Vizcaya, 48 the Court
stressed that to preserve decency within the judiciary, court personnel must comply with just contractual
obligations, act fairly and adhere to high ethical standards. In that case, we said that court employees are
expected to be paragons of uprightness, fairness and honesty not only in their official conduct but also in
their personal dealings, including business and commercial transactions to avoid becoming the court’s
albatross of infamy.49
More importantly, Section 4(c) of Republic Act No. 6713 50 or the Code of Conduct and Ethical Standards
for Public Officials and Employees mandates that public officials and employees shall remain true to the
people at all times. They must act with justness and sincerity and shall not discriminate against anyone,

563
 FIRST DIVISION
G.R. No. 156407, January 15, 2014
THELMA M. ARANAS, Petitioner, v. TERESITA V. MERCADO, FELIMON V. MERCADO,
CARMENCITA M. SUTHERLAND, RICHARD V. MERCADO, MA. TERESITA M. ANDERSON,
AND FRANKLIN L. MERCADO, Respondents.
DECISION
BERSAMIN, J.:
The probate court is authorized to determine the issue of ownership of properties for purposes of their
inclusion or exclusion from the inventory to be submitted by the administrator, but its determination shall
only be provisional unless the interested parties are all heirs of the decedent, or the question is one of
collation or advancement, or the parties consent to the assumption of jurisdiction by the probate court and
the rights of third parties are not impaired. Its jurisdiction extends to matters incidental or collateral to the
settlement and distribution of the estate, such as the determination of the status of each heir and whether
property included in the inventory is the conjugal or exclusive property of the deceased spouse.
Antecedents
Emigdio S. Mercado (Emigdio) died intestate on January 12, 1991, survived by his second wife, Teresita V.
Mercado (Teresita), and their five children, namely: Allan V. Mercado, Felimon V. Mercado, Carmencita
M. Sutherland, Richard V. Mercado, and Maria Teresita M. Anderson; and his two children by his first
marriage, namely: respondent Franklin L. Mercado and petitioner Thelma M. Aranas (Thelma).
Emigdio inherited and acquired real properties during his lifetime. He owned corporate shares in Mervir
Realty Corporation (Mervir Realty) and Cebu Emerson Transportation Corporation (Cebu Emerson). He
assigned his real properties in exchange for corporate stocks of Mervir Realty, and sold his real property in
Badian, Cebu (Lot 3353 covered by Transfer Certificate of Title No. 3252) to Mervir Realty.
On June 3, 1991, Thelma filed in the Regional Trial Court (RTC) in Cebu City a petition for the
appointment of Teresita as the administrator of Emigdio’s estate (Special Proceedings No. 3094–CEB).1 The
RTC granted the petition considering that there was no opposition. The letters of administration in favor of
Teresita were issued on September 7, 1992.
As the administrator, Teresita submitted an inventory of the estate of Emigdio on December 14, 1992 for the
consideration and approval by the RTC. She indicated in the inventory that at the time of his death, Emigdio
had “left no real properties but only personal properties” worth P6,675,435.25 in all, consisting of cash of
P32,141.20; furniture and fixtures worth P20,000.00; pieces of jewelry valued at P15,000.00; 44,806 shares
of stock of Mervir Realty worth P6,585,585.80; and 30 shares of stock of Cebu Emerson worth P22,708.25. 2
Claiming that Emigdio had owned other properties that were excluded from the inventory, Thelma moved
that the RTC direct Teresita to amend the inventory, and to be examined regarding it. The RTC granted
Thelma’s motion through the order of January 8, 1993.
On January 21, 1993, Teresita filed a compliance with the order of January 8, 1993, 3 supporting her
inventory with copies of three certificates of stocks covering the 44,806 Mervir Realty shares of stock; 4the
564
deed of assignment executed by Emigdio on January 10, 1991 involving real properties with the market
value of P4,440,651.10 in exchange for 44,407 Mervir Realty shares of stock with total par value of
P4,440,700.00;5 and the certificate of stock issued on January 30, 1979 for 300 shares of stock of Cebu
Emerson worth P30,000.00.6
On January 26, 1993, Thelma again moved to require Teresita to be examined under oath on the inventory,
and that she (Thelma) be allowed 30 days within which to file a formal opposition to or comment on the
inventory and the supporting documents Teresita had submitted.
On February 4, 1993, the RTC issued an order expressing the need for the parties to present evidence and for
Teresita to be examined to enable the court to resolve the motion for approval of the inventory. 7cralawred
On April 19, 1993, Thelma opposed the approval of the inventory, and asked leave of court to examine
Teresita on the inventory.
With the parties agreeing to submit themselves to the jurisdiction of the court on the issue of what properties
should be included in or excluded from the inventory, the RTC set dates for the hearing on that
issue.8cralawlawlibrary
Ruling of the RTC
After a series of hearings that ran for almost eight years, the RTC issued on March 14, 2001 an order finding
and holding that the inventory submitted by Teresita had excluded properties that should be included, and
accordingly ruled:
WHEREFORE, in view of all the foregoing premises and considerations, the Court hereby denies the
administratrix’s motion for approval of inventory. The Court hereby orders the said administratrix to re–do
the inventory of properties which are supposed to constitute as the estate of the late Emigdio S. Mercado by
including therein the properties mentioned in the last five immediately preceding paragraphs hereof and then
submit the revised inventory within sixty (60) days from notice of this order.
The Court also directs the said administratrix to render an account of her administration of the estate of the
late Emigdio S. Mercado which had come to her possession. She must render such accounting within sixty
(60) days from notice hereof.
SO ORDERED.9ChanRoblesVirtualawlibrary
On March 29, 2001, Teresita, joined by other heirs of Emigdio, timely sought the reconsideration of the
order of March 14, 2001 on the ground that one of the real properties affected, Lot No. 3353 located in
Badian, Cebu, had already been sold to Mervir Realty, and that the parcels of land covered by the deed of
assignment had already come into the possession of and registered in the name of Mervir Realty. 10Thelma
opposed the motion.
On May 18, 2001, the RTC denied the motion for reconsideration, 11 stating that there was no cogent reason
for the reconsideration, and that the movants’ agreement as heirs to submit to the RTC the issue of what
properties should be included or excluded from the inventory already estopped them from questioning its
jurisdiction to pass upon the issue.
Decision of the CA
Alleging that the RTC thereby acted with grave abuse of discretion in refusing to approve the inventory, and
in ordering her as administrator to include real properties that had been transferred to Mervir Realty,
Teresita, joined by her four children and her stepson Franklin, assailed the adverse orders of the RTC
promulgated on March 14, 2001 and May 18, 2001 by petition for certiorari, stating:
I presumptive conclusiveness of title; that the RTC, by disregarding the presumption, had transgressed the
THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF JURISDICTION
(sic) AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT THE REAL
PROPERTY WHICH WAS SOLD BY THE LATE EMIGDIO S. MERCADO DURING HIS LIFETIME
TO A PRIVATE CORPORATION (MERVIR REALTY CORPORATION) BE INCLUDED IN THE
INVENTORY OF THE ESTATE OF THE LATE EMIGDIO S. MERCADO.
II
THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF JURISDICTION
(sic) AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT REAL
PROPERTIES WHICH ARE IN THE POSSESSION OF AND ALREADY REGISTERED IN THE NAME
(OF) PRIVATE CORPORATION (MERVIR REALTY CORPORATION) BE INCLUDED IN THE
INVENTORY OF THE ESTATE OF THE LATE EMIGDIO S. MERCADO.
III
THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT PETITIONERS ARE
NOW ESTOPPED FROM QUESTIONING ITS JURISDICTION IN PASSING UPON THE ISSUE OF
WHAT PROPERTIES SHOULD BE INCLUDED IN THE INVENTORY OF THE ESTATE OF THE
LATE EMIGDIO MERCADO.12
On May 15, 2002, the CA partly granted the petition for certiorari, disposing as follows: 13
WHEREFORE, FOREGOING PREMISES CONSIDERED, this petition is GRANTED partially. The
assailed Orders dated March 14, 2001 and May 18, 2001 are hereby reversed and set aside insofar as the
inclusion of parcels of land known as Lot No. 3353 located at Badian, Cebu with an area of 53,301 square
meters subject matter of the Deed of Absolute Sale dated November 9, 1989 and the various parcels of land
subject matter of the Deeds of Assignment dated February 17, 1989 and January 10, 1991 in the revised
inventory to be submitted by the administratrix is concerned and affirmed in all other respects.
SO ORDERED.
The CA opined that Teresita, et al. had properly filed the petition for certiorari because the order of the
RTC directing a new inventory of properties was interlocutory; that pursuant to Article 1477 of the Civil
Code, to the effect that the ownership of the thing sold “shall be transferred to the vendee” upon its “actual
and constructive delivery,” and to Article 1498 of the Civil Code, to the effect that the sale made through a
public instrument was equivalent to the delivery of the object of the sale, the sale by Emigdio and Teresita
had transferred the ownership of Lot No. 3353 to Mervir Realty because the deed of absolute sale executed
on November 9, 1989 had been notarized; that Emigdio had thereby ceased to have any more interest in Lot
3353; that Emigdio had assigned the parcels of land to Mervir Realty as early as February 17, 1989 “for the
purpose of saving, as in avoiding taxes with the difference that in the Deed of Assignment dated January 10,
1991, additional seven (7) parcels of land were included”; that as to the January 10, 1991 deed of
assignment, Mervir Realty had been “even at the losing end considering that such parcels of land, subject
matter(s) of the Deed of Assignment dated February 12, 1989, were again given monetary consideration
through shares of stock”; that even if the assignment had been based on the deed of assignment dated
January 10, 1991, the parcels of land could not be included in the inventory “considering that there is
nothing wrong or objectionable about the estate planning scheme”; that the RTC, as an intestate court, also
565
had no power to take cognizance of and determine the issue of title to property registered in the name of
third persons or corporation; that a property covered by the Torrens system should be afforded the
clear provisions of law and infringed settled jurisprudence on the matter; and that the RTC also gravely
abused its discretion in holding that Teresita, et al. were estopped from questioning its jurisdiction because
of their agreement to submit to the RTC the issue of which properties should be included in the inventory.
The CA further opined as follows:
In the instant case, public respondent court erred when it ruled that petitioners are estopped from questioning
its jurisdiction considering that they have already agreed to submit themselves to its jurisdiction of
determining what properties are to be included in or excluded from the inventory to be submitted by the
administratrix, because actually, a reading of petitioners’ Motion for Reconsideration dated March 26, 2001
filed before public respondent court clearly shows that petitioners are not questioning its jurisdiction but the
manner in which it was exercised for which they are not estopped, since that is their right, considering that
there is grave abuse of discretion amounting to lack or in excess of limited jurisdiction when it issued the
assailed Order dated March 14, 2001 denying the administratrix’s motion for approval of the inventory of
properties which were already titled and in possession of a third person that is, Mervir Realty Corporation, a
private corporation, which under the law possessed a personality distinct and separate from its stockholders,
and in the absence of any cogency to shred the veil of corporate fiction, the presumption of conclusiveness
of said titles in favor of Mervir Realty Corporation should stand undisturbed.
Besides, public respondent court acting as a probate court had no authority to determine the applicability of
the doctrine of piercing the veil of corporate fiction and even if public respondent court was not merely
acting in a limited capacity as a probate court, private respondent nonetheless failed to adjudge competent
evidence that would have justified the court to impale the veil of corporate fiction because to disregard the
separate jurisdictional personality of a corporation, the wrongdoing must be clearly and convincingly
established since it cannot be presumed.14
On November 15, 2002, the CA denied the motion for reconsideration of Teresita, et al. 15
Issue
Did the CA properly determine that the RTC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in directing the inclusion of certain properties in the inventory notwithstanding that
such properties had been either transferred by sale or exchanged for corporate shares in Mervir Realty by the
decedent during his lifetime?
Ruling of the Court
The appeal is meritorious.
I
Was certiorari the proper recourse
to assail the questioned orders of the RTC?
The first issue to be resolved is procedural. Thelma contends that the resort to the special civil action
for certiorari to assail the orders of the RTC by Teresita and her co–respondents was not proper.
Thelma’s contention cannot be sustained.
The propriety of the special civil action for certiorari as a remedy depended on whether the assailed orders
of the RTC were final or interlocutory in nature. In Pahila–Garrido v. Tortogo,16 the Court distinguished
between final and interlocutory orders as follows:
The distinction between a final order and an interlocutory order is well known. The first disposes of the
subject matter in its entirety or terminates a particular proceeding or action, leaving nothing more to be done
except to enforce by execution what the court has determined, but the latter does not completely dispose of
the case but leaves something else to be decided upon. An interlocutory order deals with preliminary
matters and the trial on the merits is yet to be held and the judgment rendered. The test to ascertain whether
or not an order or a judgment is interlocutory or final is: does the order or judgment leave something to be
done in the trial court with respect to the merits of the case? If it does, the order or judgment is
interlocutory; otherwise, it is final.
The order dated November 12, 2002, which granted the application for the writ of preliminary injunction,
was an interlocutory, not a final, order, and should not be the subject of an appeal. The reason for
disallowing an appeal from an interlocutory order is to avoid multiplicity of appeals in a single action, which
necessarily suspends the hearing and decision on the merits of the action during the pendency of the appeals.
Permitting multiple appeals will necessarily delay the trial on the merits of the case for a considerable length
of time, and will compel the adverse party to incur unnecessary expenses, for one of the parties may
interpose as many appeals as there are incidental questions raised by him and as there are interlocutory
orders rendered or issued by the lower court. An interlocutory order may be the subject of an appeal, but
only after a judgment has been rendered, with the ground for appealing the order being included in the
appeal of the judgment itself.
The remedy against an interlocutory order not subject of an appeal is an appropriate special civil action
under Rule 65, provided that the interlocutory order is rendered without or in excess of jurisdiction or with
grave abuse of discretion. Then is certiorari under Rule 65 allowed to be resorted to.
The assailed order of March 14, 2001 denying Teresita’s motion for the approval of the inventory and the
order dated May 18, 2001 denying her motion for reconsideration were interlocutory. This is because the
inclusion of the properties in the inventory was not yet a final determination of their ownership. Hence, the
approval of the inventory and the concomitant determination of the ownership as basis for inclusion or
exclusion from the inventory were provisional and subject to revision at anytime during the course of the
administration proceedings.
In Valero Vda. De Rodriguez v. Court of Appeals,17 the Court, in affirming the decision of the CA to the
effect that the order of the intestate court excluding certain real properties from the inventory was
interlocutory and could be changed or modified at anytime during the course of the administration
proceedings, held that the order of exclusion was not a final but an interlocutory order “in the sense that it
did not settle once and for all the title to the San Lorenzo Village lots.” The Court observed there that:
The prevailing rule is that for the purpose of determining whether a certain property should or should not be
included in the inventory, the probate court may pass upon the title thereto but such determination is
not conclusive and is subject to the final decision in a separate action regarding ownership which may
be instituted by the parties (3 Moran’s Comments on the Rules of Court, 1970 Edition, pages 448–9 and
473; Lachenal vs. Salas, L–42257, June 14, 1976, 71 SCRA 262, 266). 18 (Bold emphasis supplied)
To the same effect was De Leon v. Court of Appeals,19 where the Court declared that a “probate court,
whether in a testate or intestate proceeding, can only pass upon questions of title provisionally,” and
reminded, citing Jimenez v. Court of Appeals, that the “patent reason is the probate court’s limited
jurisdiction and the principle that questions of title or ownership, which result in inclusion or exclusion from
566
the inventory of the property, can only be settled in a separate action.” Indeed, in the cited case of Jimenez v.
Court of Appeals,20 the Court pointed out:
All that the said court could do as regards the said properties is determine whether they should or should not
be included in the inventory or list of properties to be administered by the administrator. If there is a
dispute as to the ownership, then the opposing parties and the administrator have to resort to an
ordinary action for a final determination of the conflicting claims of title because the probate court
cannot do so. (Bold emphasis supplied)
On the other hand, an appeal would not be the correct recourse for Teresita, et al. to take against the assailed
orders. The final judgment rule embodied in the first paragraph of Section 1, Rule 41, Rules of
Court,21 which also governs appeals in special proceedings, stipulates that only the judgments, final orders
(and resolutions) of a court of law “that completely disposes of the case, or of a particular matter therein
when declared by these Rules to be appealable” may be the subject of an appeal in due course. The same
rule states that an interlocutory order or resolution (interlocutory because it deals with preliminary matters,
or that the trial on the merits is yet to be held and the judgment rendered) is expressly made non–appealable.
Multiple appeals are permitted in special proceedings as a practical recognition of the possibility that
material issues may be finally determined at various stages of the special proceedings. Section 1, Rule 109
of the Rules of Court enumerates the specific instances in which multiple appeals may be resorted to in
special proceedings, viz:
Section 1. Orders or judgments from which appeals may be taken. – An interested person may appeal in
special proceedings from an order or judgment rendered by a Court of First Instance or a Juvenile and
Domestic Relations Court, where such order or judgment:
(a) Allows or disallows a will;
(b) Determines who are the lawful heirs of a deceased person, or the distributive share of the estate to which
such person is entitled;
(c) Allows or disallows, in whole or in part, any claim against the estate of a deceased person, or any claim
presented on behalf of the estate in offset to a claim against it;
(d) Settles the account of an executor, administrator, trustee or guardian;
(e) Constitutes, in proceedings relating to the settlement of the estate of a deceased person, or the
administration of a trustee or guardian, a final determination in the lower court of the rights of the party
appealing, except that no appeal shall be allowed from the appointment of a special administrator; and
(f) Is the final order or judgment rendered in the case, and affects the substantial rights of the person
appealing, unless it be an order granting or denying a motion for a new trial or for reconsideration.
Clearly, the assailed orders of the RTC, being interlocutory, did not come under any of the instances in
which multiple appeals are permitted.
II
Did the RTC commit grave abuse of discretion
in directing the inclusion of the properties
in the estate of the decedent?

In its assailed decision, the CA concluded that the RTC committed grave abuse of discretion for including
properties in the inventory notwithstanding their having been transferred to Mervir Realty by Emigdio
during his lifetime, and for disregarding the registration of the properties in the name of Mervir Realty, a
third party, by applying the doctrine of piercing the veil of corporate fiction.
Was the CA correct in its conclusion?
The answer is in the negative. It is unavoidable to find that the CA, in reaching its conclusion, ignored the
law and the facts that had fully warranted the assailed orders of the RTC.
Under Section 6(a), Rule 78 of the Rules of Court, the letters of administration may be granted at the
discretion of the court to the surviving spouse, who is competent and willing to serve when the person dies
intestate. Upon issuing the letters of administration to the surviving spouse, the RTC becomes duty–bound
to direct the preparation and submission of the inventory of the properties of the estate, and the surviving
spouse, as the administrator, has the duty and responsibility to submit the inventory within three months
from the issuance of letters of administration pursuant to Rule 83 of the Rules of Court, viz:
Section 1. Inventory and appraisal to be returned within three months. – Within three (3) months after his
appointment every executor or administrator shall return to the court a true inventory and appraisal of all
the real and personal estate of the deceased which has come into his possession or knowledge. In the
appraisement of such estate, the court may order one or more of the inheritance tax appraisers to give his or
their assistance.
The usage of the word all in Section 1, supra, demands the inclusion of all the real and personal properties
of the decedent in the inventory.22 However, the word all is qualified by the phrase which has come into
his possession or knowledge, which signifies that the properties must be known to the administrator to
belong to the decedent or are in her possession as the administrator. Section 1 allows no exception, for the
phrase true inventory implies that no properties appearing to belong to the decedent can be excluded from
the inventory, regardless of their being in the possession of another person or entity.
The objective of the Rules of Court in requiring the inventory and appraisal of the estate of the decedent is
“to aid the court in revising the accounts and determining the liabilities of the executor or the administrator,
and in making a final and equitable distribution (partition) of the estate and otherwise to facilitate the
administration of the estate.”23 Hence, the RTC that presides over the administration of an estate is vested
with wide discretion on the question of what properties should be included in the inventory. According
to Peralta v. Peralta,24 the CA cannot impose its judgment in order to supplant that of the RTC on the issue
of which properties are to be included or excluded from the inventory in the absence of “positive abuse of
discretion,” for in the administration of the estates of deceased persons, “the judges enjoy ample
discretionary powers and the appellate courts should not interfere with or attempt to replace the action taken
by them, unless it be shown that there has been a positive abuse of discretion.” 25As long as the RTC
commits no patently grave abuse of discretion, its orders must be respected as part of the regular
performance of its judicial duty.
There is no dispute that the jurisdiction of the trial court as an intestate court is special and limited. The trial
court cannot adjudicate title to properties claimed to be a part of the estate but are claimed to belong to third
parties by title adverse to that of the decedent and the estate, not by virtue of any right of inheritance from
the decedent. All that the trial court can do regarding said properties is to determine whether or not they
should be included in the inventory of properties to be administered by the administrator. Such
determination is provisional and may be still revised. As the Court said in Agtarap v. Agtarap:26
567
The general rule is that the jurisdiction of the trial court, either as a probate court or an intestate court,
relates only to matters having to do with the probate of the will and/or settlement of the estate of deceased
persons, but does not extend to the determination of questions of ownership that arise during the
proceedings. The patent rationale for this rule is that such court merely exercises special and limited
jurisdiction. As held in several cases, a probate court or one in charge of estate proceedings, whether testate
or intestate, cannot adjudicate or determine title to properties claimed to be a part of the estate and which are
claimed to belong to outside parties, not by virtue of any right of inheritance from the deceased but by title
adverse to that of the deceased and his estate. All that the said court could do as regards said properties is to
determine whether or not they should be included in the inventory of properties to be administered by the
administrator. If there is no dispute, there poses no problem, but if there is, then the parties, the
administrator, and the opposing parties have to resort to an ordinary action before a court exercising general
jurisdiction for a final determination of the conflicting claims of title.
However, this general rule is subject to exceptions as justified by expediency and convenience.
First, the probate court may provisionally pass upon in an intestate or a testate proceeding the
question of inclusion in, or exclusion from, the inventory of a piece of property without prejudice to
final determination of ownership in a separate action. Second, if the interested parties are all heirs to the
estate, or the question is one of collation or advancement, or the parties consent to the assumption of
jurisdiction by the probate court and the rights of third parties are not impaired, then the probate
court is competent to resolve issues on ownership. Verily, its jurisdiction extends to matters incidental or
collateral to the settlement and distribution of the estate, such as the determination of the status of each heir
and whether the property in the inventory is conjugal or exclusive property of the deceased
spouse.27 (Italics in the original; bold emphasis supplied)
It is clear to us that the RTC took pains to explain the factual bases for its directive for the inclusion of the
properties in question in its assailed order of March 14, 2001, viz:
In the first place, the administratrix of the estate admitted that Emigdio Mercado was one of the heirs of
Severina Mercado who, upon her death, left several properties as listed in the inventory of properties
submitted in Court in Special Proceedings No. 306–R which are supposed to be divided among her heirs.
The administratrix admitted, while being examined in Court by the counsel for the petitioner, that she did
not include in the inventory submitted by her in this case the shares of Emigdio Mercado in the said estate of
Severina Mercado. Certainly, said properties constituting Emigdio Mercado’s share in the estate of Severina
Mercado should be included in the inventory of properties required to be submitted to the Court in this
particular case.
In the second place, the administratrix of the estate of Emigdio Mercado also admitted in Court that she did
not include in the inventory shares of stock of Mervir Realty Corporation which are in her name and which
were paid by her from money derived from the taxicab business which she and her husband had since 1955
as a conjugal undertaking. As these shares of stock partake of being conjugal in character, one–half thereof
or of the value thereof should be included in the inventory of the estate of her husband.
In the third place, the administratrix of the estate of Emigdio Mercado admitted, too, in Court that she had a
bank account in her name at Union Bank which she opened when her husband was still alive. Again, the
money in said bank account partakes of being conjugal in character, and so, one–half thereof should be
included in the inventory of the properties constituting as estate of her husband.
In the fourth place, it has been established during the hearing in this case that Lot No. 3353 of Pls–657–D
located in Badian, Cebu containing an area of 53,301 square meters as described in and covered by Transfer
Certificate of Title No. 3252 of the Registry of Deeds for the Province of Cebu is still registered in the name
of Emigdio S. Mercado until now. When it was the subject of Civil Case No. CEB–12690 which was
decided on October 19, 1995, it was the estate of the late Emigdio Mercado which claimed to be the owner
thereof. Mervir Realty Corporation never intervened in the said case in order to be the owner thereof. This
fact was admitted by Richard Mercado himself when he testified in Court. x x x So the said property located
in Badian, Cebu should be included in the inventory in this case.
Fifthly and lastly, it appears that the assignment of several parcels of land by the late Emigdio S. Mercado to
Mervir Realty Corporation on January 10, 1991 by virtue of the Deed of Assignment signed by him on the
said day (Exhibit N for the petitioner and Exhibit 5 for the administratrix) was a transfer in contemplation of
death. It was made two days before he died on January 12, 1991. A transfer made in contemplation of death
is one prompted by the thought that the transferor has not long to live and made in place of a testamentary
disposition (1959 Prentice Hall, p. 3909). Section 78 of the National Internal Revenue Code of 1977
provides that the gross estate of the decedent shall be determined by including the value at the time of his
death of all property to the extent of any interest therein of which the decedent has at any time made a
transfer in contemplation of death. So, the inventory to be approved in this case should still include the said
properties of Emigdio Mercado which were transferred by him in contemplation of death. Besides, the said
properties actually appeared to be still registered in the name of Emigdio S. Mercado at least ten (10)
months after his death, as shown by the certification issued by the Cebu City Assessor’s Office on October
31, 1991 (Exhibit O).28
Thereby, the RTC strictly followed the directives of the Rules of Court and the jurisprudence relevant to the
procedure for preparing the inventory by the administrator. The aforequoted explanations indicated that the
directive to include the properties in question in the inventory rested on good and valid reasons, and thus
was far from whimsical, or arbitrary, or capricious.
Firstly, the shares in the properties inherited by Emigdio from Severina Mercado should be included in the
inventory because Teresita, et al. did not dispute the fact about the shares being inherited by Emigdio.
Secondly, with Emigdio and Teresita having been married prior to the effectivity of the Family Code in
August 3, 1988, their property regime was the conjugal partnership of gains. 29 For purposes of the settlement
of Emigdio’s estate, it was unavoidable for Teresita to include his shares in the conjugal partnership of
gains. The party asserting that specific property acquired during that property regime did not pertain to the
conjugal partnership of gains carried the burden of proof, and that party must prove the exclusive ownership
by one of them by clear, categorical, and convincing evidence. 30 In the absence of or pending the
presentation of such proof, the conjugal partnership of Emigdio and Teresita must be provisionally
liquidated to establish who the real owners of the affected properties were, 31 and which of the properties
should form part of the estate of Emigdio. The portions that pertained to the estate of Emigdio must be
included in the inventory.
Moreover, although the title over Lot 3353 was already registered in the name of Mervir Realty, the RTC
made findings that put that title in dispute. Civil Case No. CEB–12692, a dispute that had involved the
ownership of Lot 3353, was resolved in favor of the estate of Emigdio, and Transfer Certificate of Title No.
3252 covering Lot 3353 was still in Emigdio’s name. Indeed, the RTC noted in the order of March 14, 2001,
or ten years after his death, that Lot 3353 had remained registered in the name of Emigdio.
Interestingly, Mervir Realty did not intervene at all in Civil Case No. CEB–12692. Such lack of interest in
Civil Case No. CEB–12692 was susceptible of various interpretations, including one to the effect that the
heirs of Emigdio could have already threshed out their differences with the assistance of the trial court. This
568
interpretation was probable considering that Mervir Realty, whose business was managed by respondent
Richard, was headed by Teresita herself as its President. In other words, Mervir Realty appeared to be a
family corporation.
Also, the fact that the deed of absolute sale executed by Emigdio in favor of Mervir Realty was a notarized
instrument did not sufficiently justify the exclusion from the inventory of the properties involved. A
notarized deed of sale only enjoyed the presumption of regularity in favor of its execution, but its
notarization did not per se guarantee the legal efficacy of the transaction under the deed, and what the
contents purported to be. The presumption of regularity could be rebutted by clear and convincing evidence
to the contrary.32 As the Court has observed in Suntay v. Court of Appeals:33
x x x. Though the notarization of the deed of sale in question vests in its favor the presumption of regularity,
it is not the intention nor the function of the notary public to validate and make binding an instrument never,
in the first place, intended to have any binding legal effect upon the parties thereto. The intention of the
parties still and always is the primary consideration in determining the true nature of a contract.(Bold
emphasis supplied)
It should likewise be pointed out that the exchange of shares of stock of Mervir Realty with the real
properties owned by Emigdio would still have to be inquired into. That Emigdio executed the deed of
assignment two days prior to his death was a circumstance that should put any interested party on his guard
regarding the exchange, considering that there was a finding about Emigdio having been sick of cancer of
the pancreas at the time.34 In this regard, whether the CA correctly characterized the exchange as a form of
an estate planning scheme remained to be validated by the facts to be established in court.
The fact that the properties were already covered by Torrens titles in the name of Mervir Realty could not be
a valid basis for immediately excluding them from the inventory in view of the circumstances admittedly
surrounding the execution of the deed of assignment. This is because:
The Torrens system is not a mode of acquiring titles to lands; it is merely a system of registration of titles to
lands. However, justice and equity demand that the titleholder should not be made to bear the unfavorable
effect of the mistake or negligence of the State’s agents, in the absence of proof of his complicity in a fraud
or of manifest damage to third persons. The real purpose of the Torrens system is to quiet title to land and
put a stop forever to any question as to the legality of the title, except claims that were noted in the
certificate at the time of registration or that may arise subsequent thereto. Otherwise, the integrity of the
Torrens system shall forever be sullied by the ineptitude and inefficiency of land registration officials, who
are ordinarily presumed to have regularly performed their duties. 35
Assuming that only seven titled lots were the subject of the deed of assignment of January 10, 1991, such
lots should still be included in the inventory to enable the parties, by themselves, and with the assistance of
the RTC itself, to test and resolve the issue on the validity of the assignment. The limited jurisdiction of the
RTC as an intestate court might have constricted the determination of the rights to the properties arising
from that deed,36 but it does not prevent the RTC as intestate court from ordering the inclusion in the
inventory of the properties subject of that deed. This is because the RTC as intestate court, albeit vested only
with special and limited jurisdiction, was still “deemed to have all the necessary powers to exercise such
jurisdiction to make it effective.”37
Lastly, the inventory of the estate of Emigdio must be prepared and submitted for the important purpose of
resolving the difficult issues of collation and advancement to the heirs. Article 1061 of the Civil
Coderequired every compulsory heir and the surviving spouse, herein Teresita herself, to “bring into the
mass of the estate any property or right which he (or she) may have received from the decedent, during the
lifetime of the latter, by way of donation, or any other gratuitous title, in order that it may be computed in
the determination of the legitime of each heir, and in the account of the partition.” Section 2, Rule 90 of
the Rules of Court also provided that any advancement by the decedent on the legitime of an heir “may be
heard and determined by the court having jurisdiction of the estate proceedings, and the final order of the
court thereon shall be binding on the person raising the questions and on the heir.” Rule 90 thereby
expanded the special and limited jurisdiction of the RTC as an intestate court about the matters relating to
the inventory of the estate of the decedent by authorizing it to direct the inclusion of properties donated or
bestowed by gratuitous title to any compulsory heir by the decedent. 38

The determination of which properties should be excluded from or included in the inventory of estate
properties was well within the authority and discretion of the RTC as an intestate court. In making its
determination, the RTC acted with circumspection, and proceeded under the guiding policy that it was best
to include all properties in the possession of the administrator or were known to the administrator to belong
to Emigdio rather than to exclude properties that could turn out in the end to be actually part of the estate.
As long as the RTC commits no patent grave abuse of discretion, its orders must be respected as part of the
regular performance of its judicial duty. Grave abuse of discretion means either that the judicial or quasi–
judicial power was exercised in an arbitrary or despotic manner by reason of passion or personal hostility, or
that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to perform the duty
enjoined or to act in contemplation of law, such as when such judge, tribunal or board exercising judicial or
quasi–judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction.39

In light of the foregoing, the CA’s conclusion of grave abuse of discretion on the part of the RTC was
unwarranted and erroneous.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS
ASIDE the decision promulgated on May 15, 2002; REINSTATES the orders issued on March 14, 2001
and May 18, 2001 by the Regional Trial Court in Cebu; DIRECTS the Regional Trial Court in Cebu to
proceed with dispatch in Special Proceedings No. 3094–CEB entitled Intestate Estate of the late Emigdio
Mercado, Thelma Aranas, petitioner, and to resolve the case; and ORDERS the respondents to pay the costs
of suit.ChanRoblesVirtualawlibrary

SO ORDERED.

569
 THIRD DIVISION
G.R. No. 187524, August 05, 2015
SPOUSES MARIA BUTIONG AND FRANCISCO VILLAFRIA, SUBSTITUTED BY DR. RUEL B.
VILLAFRIA, Petitioners, v. MA. GRACIA RIÑOZA PLAZO AND MA. FE RIÑOZA
ALARAS, Respondents.
DECISION
PERALTA, J.:
Before the-Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse
and set aside the Decision1 and Resolution,2 dated March 13, 2009 and April 23, 2009, respectively, of the
Court Appeals (CA) in CA-G.R. SP No. 107347, which affirmed the Judgment3 dated October 1, 2001 of the
Regional Trial Court (RTC) of Nasugbu, Batangas, Branch 14, in Civil Case No. 217.
The antecedent facts are as follows:LawlibraryofCRAlaw
On November 16, 1989, Pedro L. Riñoza died intestate, leaving several heirs, including his children with his
first wife, respondents Ma. Gracia R. Plazo and Ma. Fe Alaras, as well as several properties including a
resort covered by Transfer Certificates of Title (TCT) No. 51354 and No. 51355, each with an area of 351
square meters, and a family home, the land on which it stands is covered by TCT Nos. 40807 and 40808,
both located in Nasugbu, Batangas.4redarclaw
In their Amended Complaint for Judicial Partition with Annulment of Title and Recovery of
Possession5dated September 15, 1993, respondents alleged that sometime in March 1991, they discovered
that their co-heirs, Pedro's second wife, Benita Tenorio and other children, had sold the subject properties to
petitioners, spouses Francisco Villafria and Maria Butiong, who are now deceased and substituted by their
son, Dr. Ruel B. Villafria, without their knowledge and consent. When confronted about the sale, Benita
acknowledged the same, showing respondents a document she believed evidenced receipt of her share in the
sale, which, however, did not refer to any sort of sale but to a previous loan obtained by Pedro and Benita
from a bank.6 The document actually evidenced receipt from Banco Silangan of the amount of P87,352.62
releasing her and her late husband's indebtedness therefrom. 7 Upon inquiry, the Register of Deeds of
Nasugbu informed respondents that he has no record of any transaction involving the subject properties,
giving them certified true copies of the titles to the same. When respondents went to the subject properties,
they discovered that 4 out of the 8 cottages in the resort had been demolished. They were not, however, able
to enter as the premises were padlocked.
Subsequently, respondents learned that on July 18, 1991, a notice of an extra-judicial settlement of estate of
their late father was published in a tabloid called Balita. Because of this, they caused the annotation of their
adverse claims over the subject properties before the Register of Deeds of Nasugbu and filed their complaint
praying, among others, for the annulment of all documents conveying the subject properties to the
petitioners and certificates of title issued pursuant thereto. 8redarclaw
In their Answer,9 petitioners denied the allegations of the complaint on the ground of lack of personal
knowledge and good faith in acquiring the subject properties. In the course of his testimony during trial,
petitioner Francisco further contended that what they purchased was only the resort. 10 He also presented an
570
Extra-Judicial Settlement with Renunciation, Repudiations and Waiver of Rights and Sale which provides,
among others, that respondents' co-heirs sold the family home to the spouses Rolando and Ma. Cecilia
Bondoc for P1 million as well as a Deed of Sale whereby Benita sold the resort to petitioners for
P650,000.00.11redarclaw
On October 1, 2001, the trial court nullified the transfer of the subject properties to petitioners and spouses
Bondoc due to irregularities in the documents of conveyance offered by petitioners.as well as the
circumstances surrounding the execution of the same. Specifically, the Extra-Judicial Settlement was
notarized by a notary public who was not duly commissioned as such on the date it was executed. 12 The
Deed of Sale was undated, the date of the acknowledgment therein was left blank, and the typewritten name
"Pedro Riñoza, Husband" on the left side of the document was not signed. 13 The trial court also observed
that both documents were never presented to the Office of the Register of Deeds for registration and that the
titles to the subject properties were still in the names of Pedro and his second wife Benita. In addition, the
supposed notaries and buyers of the subject properties were not even presented as witnesses who supposedly
witnessed the signing and execution of the documents of conveyance. 14 On the basis thereof, the trial court
ruled in favor of respondents, in its Judgment, the pertinent portions of
its fallo provide:LawlibraryofCRAlaw
WHEREFORE, foregoing premises considered, judgment is hereby rendered as
follows:LawlibraryofCRAlaw
xxxx
4. a) Declaring as a nullity the Extra-Judicial Settlement with Renunciation, Repudiation and Waiver of
Rights and Sale" (Exh. "1", Villafria) notarized on December 23, 1991 by Notary Public Antonio G.
Malonzo of Manila, Doc. No. 190, Page No. 20, Book No. IXII, Series of 1991.
b) Declaring as a nullity the Deed of Absolute Sale (Exh. "2", Villafria), purportedly executed by Benita T.
Riñoza in favor of spouses Francisco Villafria and Maria Butiong, purportedly notarized by one Alfredo de
Guzman, marked Doc. No. 1136, Page No. 141, Book No. XXX, Series of 1991.
c) Ordering the forfeiture of any and all improvements introduced by defendants Francisco Villafria dnd
Maria Butiong in the properties covered by TCT No. 40807, 40808, 51354 and 51355 of the Register of
Deeds for Nasugbu, Batangas.
5. Ordering defendant Francisco Villafria and all persons, whose occupancy within the premises of the four
(4) parcels of land described in par. 4-c above is derived from the rights and interest of defendant Villafria,
to vacate its premises and to deliver possession thereof, and all improvements existing thereon to plaintiffs,
for and in behalf of the estate of decedent Pedro L. Riñoza.
6. Declaring the plaintiffs and the defendants-heirs in the Amended Complaint to be the legitimate heirs of
decedent Pedro L. RifSoza, each in the capacity and degree established, as well as their direct successors-in-
interest, and ordering the defendant Registrar of Deeds to issue the corresponding titles in their names in the
proportion established by law, pro indiviso, in TCT Nos. 40807, 40808, 51354, 51355 and 40353 (after
restoration) within ten (10) days from finality of this Decision, upon payment of lawful fees, except TCT
No. 40353, which shall be exempt from all expenses for its restoration.
With no costs.
SO ORDERED.15
On appeal, the CA affirmed the trial court's Judgment in its Decision 16 dated October 31, 2006 in the
following wise:LawlibraryofCRAlaw
The person before whom the resort deed was acknowledged, Alfredo de Guzman, was not
commissioned as a notary public from 1989 to July 3, 1991, the date the certification was issued. Such
being the case, the resort deed is not a public document and the presumption of- regularity accorded
to public documents will not apply to the same. As laid down in Tigno, el al. v. Aquino, et
al.:LawlibraryofCRAlaw
The validity of a notarial certification necessarily derives from the authority of the notarial officer. If the
notary public does net have the capacity to notarize a document, but does so anyway, then the
document should be treated as unnotarized. The rule may strike as rather harsh, and perhaps may prove
to be prejudicial to parties in good faith relying on the proferred authority of the notary public or the person
pretending to be one. Still, to admit otherwise would render merely officious the elaborate process devised
by this Court in order that a lawyer may receive a notarial commission. Without such a rule, the
notarization of a document by a duly-appointed notary public will have the same legal effect as one
accomplished by a non-lawyer engaged in pretense.
The notarization of a document carries considerable legal effect. Notarization of a private document
converts such document into a public one, and renders it admissible in court without further proof of
its authenticity. Thus, notarization is not an empty routine; to the contrary, it engages public interest in a
substantial degree and the protection of that interest requires preventing those who are not qualified or
authorized to act as notaries public from imposing upon the public and the courts and administrative offices
generally.Parenthetically, the settlement/family home deed cannot be considered a public document.
This is because the following cast doubt on the document's authenticity, to wit:LawlibraryofCRAlaw
1.) The date of its execution was not indicated;
2.) The amount of consideration was superimposed;
3.) It was not presented to the Registry of Deeds of Nasugbu, Batangas for annotation; and
4.) Not even the supposed notary public," Alfredo de Guzman, or the purported buyer, the Spouses
Rolando and Ma. Cecilia Bondoc, were presented as witnesses.
Concededly, the absence of notarization in the resort deed and/or the lacking details in the settlement/family
home deed did not necessarily invalidate the transactions evidenced by the said documents. However, since
the said deeds are private documents, perforce, their due execution and authenticity becomes subject
to the requirement of proof under the Rules on Evidence, Section 20, Rule 132 of which
provides:LawlibraryofCRAlaw
Sec. 20. Proof of private document. - Before any private document offered as authentic is received in
evidence, its due execution aijd .authenticity must be proved either:LawlibraryofCRAlaw
(a) By anyone who saw the document executed or written; or
(b) By evidence of the genuineness of the signature or handwriting of the maker.The Complaining Heirs
insist that the settlement/family home and the resort deed are void as their signatures thereon are forgeries as
opposed to the Villafrias who profess the deeds' enforceability. After the Complaining Heirs presented
proofs in support of their claim that their signatures were forged, the burden then fell upon the
Villafrias to disprove the same, or conversely, to prove the authenticity and due execution of the said
deeds. The Villafrias failed in this regard.
571
As aforestated, the Villafrias did not present as witnesses (a) the notary public who purportedly
notarized the questioned instrument, (b) the witnesses who appeared] in the instruments as
eyewitnesses to the signing, or (c) an expert to prove the authenticity and genuineness of all the
signatures appearing o,n the said instruments. Verily, the rule that, proper foundation must be laid
for the admission of documentary evidence; that is, the identity and authenticity of the document
must be reasonably established as a prerequisite to its admission, was prudently observed by the
lower court when it refused to admit the settlement/family home and the resort deeds as their veracity
are doubtful.17
Aggrieved, petitioners, substituted by their son Ruel Villafria, filed a Motion for Reconsideration dated
November 24, 2006 raising the trial court's lack of jurisdiction. It was alleged that when the Complaint for
Judicial Partition with Annulment of Title and Recovery of Possession was filed, there was yet no settlement
of Pedro's estate, determination as to the nature thereof, nor was there an identification of the number of
legitimate heirs. As such, the trial court ruled on the settlement of the intestate estate of Pedro in its ordinary
jurisdiction when the action filed was for Judicial Partition. Considering that the instant action is really one
for settlement of intestate estate, the trial court, sitting merely in its probate jurisdiction, exceeded its
jurisdiction when it ruled upon the issues of forgery and ownership. Thus, petitioner argued that said ruling
is void and has no effect for having been rendered without jurisdiction. The Motion for Reconsideration
was, however, denied by the appellate court on February 26, 2007.
On appeal, this Court denied on June 20, 2007, petitioner's Petition for Review on Certiorari for submitting
a verification of the petition, a certificate of non-forum shopping and an affidavit of service that failed to
comply with the 2004 Rules on Notarial Practice regarding competent evidence of affiant's identities. 18 In its
Resolution19 dated September 26, 2007, this Court also denied petitioner's Motion for Reconsideration in the
absence of any compelling reason to warrant a modification of the previous denial. Thus, the June 20, 2007
Resolution became final and executory on October 31, 2007 as certified by the Entry of Judgment issued by
the Court.20redarclaw
On January 16, 2008, the Court further denied petitioner's motion for leave to admit a second motion for
reconsideration of its September 26, 2007 Resolution, considering that the same is a prohibited pleading
under Section 2, Rule 52, in relation to Section 4, Rule 56 of the 1997 Rules of Civil Procedure, as amended.
Furthermore, petitioner's letter dated December 18, 2007 pleading the Court to take a second, look at his
petition for review on certiorari and that a decision thereon be rendered based purely on its merits was noted
without action.21redarclaw
Unsatisfied, petitioner wrote a letter dated March 24, 2008 addressed to then Chief Justice Reynato S. Puno
praying that a decision on the case be rendered based on the .merits and not on formal requirements "as he
stands to lose everything his parents had left him just because the verification against non-forum shopping is
formally defective." However, in view of the Entry of Judgment having been made on October 31, 2007, the
Court likewise noted said letter without action.22redarclaw
On November 27, 2008, the RTC issued an Order, issuing a Partial Writ of Execution of its October 1, 2001
Decision with respect to the portions disposing of petitioner's claims as affirmed by the CA.
The foregoing notwithstanding, petitioner filed, on February 11, 2009, a Petition for Annulment of
Judgment and Order before the CA assailing the October 1, 2001 Decision as well as the November 27,
2008 Order of the RTC on the grounds of extrinsic fraud and lack of jurisdiction. In its Decision dated
March 13, 2009, however, the CA dismissed the petition and affirmed the rulings of the trial court in the
following wise:LawlibraryofCRAlaw

Although the assailed Decision of the Court a quo has already become final and executory and in fact entry
of judgment was issued on 31 October 2007, supra, nevertheless, to put the issues to rest, We deem it
apropos to tackle the same.
The Petitioner argues that the assailed Decision and Order of the Court a quo, supra, should be annulled and
set aside on the grounds of extrinsic fraud and lack of jurisdiction.
We are not persuaded,
xxxx
Section 2 of the Rules as stated above provides that the annulment of a judgment may "be based only on
grounds of extrinsic fraud and lack of jurisdiction." In RP v. The Heirs of Sancho Magdato, the High
Tribunal stressed that:LawlibraryofCRAlaw
There is extrinsic fraud when "the unsuccessful party had been prevented from exhibiting fully his
case, by fraud or deception practiced on him by his opponent, as by keeping him away from court, ...
or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the
plaintiff; ..."Otherwise put, extrinsic or collateral fraud pertains to such fraud which prevents the aggrieved
party from having a trial or presenting his case to the court, or is used to procure the judgment without fair
submission of the controversy. This refers to acts intended to keep the unsuccessful party away from the
courts as when there is a false promise of compromise or when one is kept in ignorance of the suit.
The pivotal issues before Us are: (1) whether there was a time during the proceedings below that the
Petitioners ever prevented from exhibiting fully their case, by fraud or deception, practiced on them
by Respondents, and (2) whether the Petitioners were kept away from the court or kept in ignorance
by the acts of the Respondent?
We find nothing of that sort. Instead, what We deduced as We carefully delved into the evidentiary
facts surrounding the instant case as well as the proceedings below as shown in the 36-page Decision
of the Court a quo, is that the Petitioners were given ample time to rebut the allegations of the
Respondents and had in fact addressed every detail of Respondent's cause of action against them.
Thus, Petitioners' allegation of the Court a quo's lack of jurisdiction is misplaced.
Our pronouncement on the matter finds support in the explicit ruling of the Supreme Court in Sps. Santos, et
al. v. Sps. Lumbao, thus:LawlibraryofCRAlaw
It is elementary that the active participation of a party in a case pending against him before a court is
tantamount to recognition of that court's jurisdiction and willingness to abide by the resolution of the
case which will bar said party from later on impugning the court's jurisdiction.In fine, under the
circumstances obtaining in this case the Petitioners are stopped from assailing the Court a quo's lack of
jurisdiction.
Too, We do not find merit in the Petitioners' second issue, supra.
As mentioned earlier, entry of judgment had already been made on the assailed Decision and Order as early
as 31 October 2007.
xxxx
572
It maybe that the doctrine of finality of judgments permits certain equitable remedies such as a
petition for annulment. But the rules are clear. The annulment by the Court of Appeals of judgments
or final orders and resolutions in civil actions of the Regional Trial Courts is resorted to only where
the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no
longer available through no fault of the petitioner, supra.
If Petitioners lost their chance to avail themselves of the appropriate remedies or appeal before the
Supreme Court, that is their own look out. The High Tribunal has emphatically pointed out in Mercado,
et al. v. Security Bank Corporation, thus:LawlibraryofCRAlaw
A principle almost repeated to satiety is that "an action for annulment of judgment cannot and is not a
substitute for the lost remedy of-appeal." A party must have first availed of appeal, a motion for new
trial or a petition for relief before an action for annulment can prosper. Its obvious rationale is to
prevent the party from benefiting from his inaction or negligence. Also, the action for annulment of
judgment must be based either on (a) extrinsic fraud or (b) lack of jurisdiction or denial of due
process. Having failed to avail of the remedies and there being a clear showing that neither of the
grounds was present, the petition must be dismissed. Only a disgruntled litigant would find such legal
disposition unacceptable.23When the appellate court denied Petitioner's Motion for Reconsideration in its
Resolution dated April 23, 2009, petitioner filed the instant Petition for Review on Certiorari on June 10,
2009, invoking the following ground:LawlibraryofCRAlaw
I.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT RULING THAT THE
REGIONAL TRIAL COURT, BRANCH 14, NASUGBU, BATANGAS, ACTED WITHOUT
JURISDICTION IN ENTERTAINING THE SPECIAL PROCEEDING FOR THE SETTLEMENT OF
ESTATE OF PEDRO RIÑOZA AND THE CIVIL ACTION FOR ANNULMENT OF TITLE OF THE
HEIRS AND THIRD PERSONS IN ONE PROCEEDING.24
Petitioner asserts that while the complaint filed by respondents was captioned as "Judicial Partition with
Annulment of Title and Recovery of Possession," the allegations therein show that the cause of action is
actually one for settlement of estate of decedent Pedro. Considering that settlement of estate is a special
proceeding cognizable by a probate court of limited jurisdiction while judicial partition with annulment of
title and recovery of possession are ordinary civil actions cognizable by a court of general jurisdiction, the
trial court exceeded its jurisdiction in entertaining the latter while it was sitting merely in its probate
jurisdiction. This is in view of the prohibition found in the Rules on the joinder of special civil actions and
ordinary civil actions.25 Thus, petitioner argued that the ruling of the trial court is void and has no effect for
having been rendered in without jurisdiction.
Petitioner also reiterates the arguments raised before the appellate court that since the finding of forgery
relates only to the signature of respondents and not to their co-heirs who assented to the conveyance, the
transaction should be considered valid as to them. Petitioner also denies the findings of the courts below that
his parents are builders in bad faith for they only took possession of the subject properties after the
execution of the transfer documents and after they paid the consideration on the sale.
The petition is bereft of merit.
Petitioner maintains that since respondents' complaint alleged the following causes of action, the same is
actually one for settlement of estate and not of judicial partition:LawlibraryofCRAlaw
FIRST CAUSE OF ACTION
1. That Pedro L. Riñoza, Filipino and resident of Nasugbu, Batangas at the time of his death, died intestate
on November 16, 1989. Copy of his death certificate is hereto attached as Annex "A";
2. That Plaintiffs together with the Defendants enumerated from paragraph 2-A to 2-J are the only
known heirs of the above-mentioned decedent. The plaintiffs and the Defendants Rolando, Rafael, Antonio,
Angelito, Lorna all surnamed Riñoza, and Myrna R. Limon or Myrna R. Rogador, Epifanio Belo and Ma.
Theresa R. Demafelix are the decedent's legitimate children with his first wife, while Benita Tenorio
Rifioza, is the decedent's widow and Bernadette Riñoza, the decedent's daughter with said widow. As such,
said parties are co-owners by virtue of an intestate inheritance from the decedent, of the properties
enumerated in the succeeding paragraph;
3. That the decedent left the following real properties all located in Nasugbu,
Batangas:LawlibraryofCRAlaw
xxxx
16. That the estate of decedent Pedro L. Riñoza has no known legal indebtedness;
17. That said estate remains undivided up to this date and it will be to the best interest of all heirs that
same be partitioned judicially.26
Petitioner is mistaken. It is true that some of respondents' causes of action pertaining to the properties left
behind by the decedent Pedro, his known heirs, and the nature and extent of their interests thereon, may fall
under an action for settlement of estate. However, a complete reading of the complaint would readily show
that, based on the nature of the suit, the allegations therein, and the reliefs prayed for, the action is clearly
one for judicial partition with annulment of title and recovery of possession.
Section 1, Rule 74 of the Rules of Court provides:LawlibraryofCRAlaw
RULE 74
Summary Settlement of Estate
Section 1. Extrajudicial settlement by agreement between heirs. — If the decedent left no will and no
debts and the heirs are all of age, or the minors are represented by their judicial or legal representatives
duly authorized for the purpose, the parties may without securing letters of administration, divide the
estate among themselves as they see fit by means of a public instrument filed in the office of the register of
deeds, and should they disagree, they may do so in an ordinary action of partition. If there is only one
heir, he may adjudicate to himself the entire estate by means of an affidavit filled in the office of the register
of deeds. The parties to an extrajudicial settlement, whether by public instrument or by stipulation in a
pending action for partition, or the sole heir who adjudicates the entire estate to himself by means of an
affidavit shall file, simultaneously with and as a condition precedent to the filing of the public instrument, or
stipulation in the action for partition, or of the affidavit in the office of the register of deeds, a bond with the
said register of deeds, in an amount equivalent to the value of the personal property involved as certified to
under oath by the parties concerned and conditioned upon the payment of any just claim that may be filed
under section 4 of this rule. It shall be presumed that the decedent left no debts if no creditor files a petition
for letters of administration within two (2) years after the death of the decedent.
The fact of the extrajudicial settlement or administration shall be published in a newspaper of general
circulation in the manner provided in the next succeeding section; but no extrajudicial settlement shall be
binding upon any person who has not participated therein or had no notice thereof.27
573
In this relation, Section 1, Rule 69 of the Rules of Court provides:LawlibraryofCRAlaw
Section 1. Complaint in action for partition of real estate. — A person having the right to compel the
partition of real estate may do so as provided in this Rule, setting forth in his complaint the nature and
extent of his title and an adequate description of the real estate of which partition is demanded and
joining as defendants all other persons interested in the property.28
As can be gleaned from the foregoing provisions, the allegations of respondents in their complaint are but
customary, in fact, mandatory, to a complaint for partition of real estate. Particularly, the complaint alleged:
(1) that Pedro died intestate; (2) that respondents, together with their co-heirs, are all of legal age, with the
exception of one who is represented by a judicial representative duly authorized for the purpose; (3) that the
heirs enumerated are the only known heirs of Pedro; (4) that there is an account and description of all real
properties left by Pedro; (5) that Pedro's estate has no known indebtedness; and (6) that respondents, as
rightful heirs to the decedent's estate, pray for the partition of the same in accordance with the laws of
intestacy. It is clear, therefore, that based on the allegations of the complaint, the case is one for judicial
partition. That the complaint alleged causes of action identifying the heirs of the decedent, properties of the
estate, and their rights thereto, does not perforce make it an action for settlement of estate.
It must be recalled that the general rule is that when a person dies intestate, or, if testate, failed to name an
executor in his will or the executor so named is incompetent, or refuses the trust, or. fails to furnish the bond
required by the Rules of Court, then the decedent's estate shall be judicially administered and the competent
court shall appoint a qualified administrator in the order established in Section 6 of Rule 78 of the Rules of
Court.29 An exception to this rule, however, is found in the aforequoted Section 1 of Rule 74 wherein the
heirs of a decedent, who left no will and no debts due from his estate, may divide the estate either
extrajudicially or in an ordinary action for partition without submitting the same for judicial administration
nor applying for the appointment of an administrator by the court. 30 The reason is that where the deceased
dies without pending obligations, there is no necessity for the appointment of an administrator to administer
the estate for them and to deprive the real owners of their possession to which they are immediately
entitled.31redarclaw
In this case, it was expressly alleged in the complaint, and was not disputed, that Pedro died without a will,
leaving his estate without any pending obligations. Thus, contrary to petitioner'.s contention, respondents
were under no legal obligation to submit me subject properties of the estate to a special proceeding for
settlement of intestate estate, and are, in fact, encouraged to have the same partitioned, judicially or
extrajudicially, by Pereira v. Court of Appeals:32redarclaw
Section 1, Rule 74 of the Revised Rules of Court, however, does not preclude the heirs from instituting
administration proceedings, even if the estate has no" debts or obligations, if they do not desire to resort for
good reasons to an ordinary action for partition. While Section 1 allows the heirs to divide the estate among
themselves as they may see fit, or to resort to an ordinary action for partition, the said provision does not
compel them to do so if they have good reasons to take a different course of action. It should be noted that
recourse to an administration proceeding even if the estate has no debts is sanctioned only if the heirs have
good reasons for not resorting to an action for partition. Where' partition is possible, either in or out of
court, the estate should not be burdened with an administration proceeding without good and
compelling reasons.
Thus, it has been repeatedly held that when a person dies without leaving pending obligations to be
paid, his heirs, whether of age or not, are not bound to submit the property to a judicial
administration, which is always long and costly, or to apply for the appointment of an administrator
by the Court. It has been uniformly held that in such case the judicial administration and the
appointment of an administrator are superfluous and unnecessary proceedings. 33
Thus, respondents committed no error in filing an action for judicial partition instead of a special proceeding
for the settlement of estate as the same is expressly permitted by law. That the complaint contained
allegations inherent in an action for settlement of estate does not mean that there was a prohibited joinder of
causes of action for questions as to the estate's properties as well as a determination of the heirs, their status
as such, and the nature and extent of their titles to the estate, may also be properly ventilated in partition
proceedings alone.34 In fact, a complete inventory of the estate may likewise be done during the partition
proceedings, especially since the estate has no debts.35Indeed, where the more expeditious remedy of
partition is available to the heirs, then they may not be compelled to submit to administration proceedings,
dispensing of the risks of delay and of the properties being dissipated. 36redarclaw
Moreover, the fact that respondents' complaint al$o prayed for the annulment of title and recovery of
possession does not strip the trial court off of its jurisdiction to hear and decide the case. Asking for the
annulment of certain transfers of property could very well be achieved in an action for partition, 37 as can be
seen in cases where courts determine the parties' rights arising from complaints asking not only for the
partition of estates but also for the annulment of titles and recovery of ownership and possession of
property.38 In fact, in Bagayas v. Bagayas,39 wherein a complaint for annulment of sale and partition was
dismissed by the trial court due to the impropriety of an action for annulment as it constituted a collateral
attack on the certificates of title of the respondents therein, this Court found the dismissal to be improper in
the following manner:LawlibraryofCRAlaw
In Lacbayan v. Samoy, Jr. (Lacbayan) which is an action for partition premised on the existence or
non-existence of co-ownership between the parties, the Court categorically pronounced that a
resolution on the issue of ownership does not subject the Torrens title issued over the disputed realties
to a collateral attack. It must be borne in mind that what cannot be collaterally attacked is the
certificate of title and not the title itself. As pronounced in Lacbayan:LawlibraryofCRAlaw
There is no dispute that a Torrens certificate of title cannot be collaterally attacked, but that rule is not
material to the case at bar. What cannot be collaterally attacked is the certificate of title and not the title
itself. The certificate referred to is that document issued by the Register of Deeds known as the TCT.
In contrast, the title referred to by law means ownership which is, more often than not, represented
by that document. Petitioner apparently confuses title with the certificate of title. Title as a concept of
ownership should not be confused with the certificate of title as evidence of such ownership although both
are interchangeably used. (Emphases supplied)
Thus, the RTC erroneously dismissed petitioner's petition for annulment of sale on the ground that it
constituted a collateral attack since she was actually assailing Rogelio and Orlando's title to the
subject lands and not any Torrens certificate of title over the same.
Indeed, an action for partition does not preclude the settlement of the issue of ownership. In fact, the
determination as to the existence of the same is necessary in the resolution of an action for partition, as held
in Municipality of Biñan v. Garcia:40redarclaw
The first phase of a partition and/or accounting suit is taken up with the determination of whether or
not a co-ownership in fact exists, and a partition is proper (i.e., not otherwise legally proscribed) and
may be made by voluntary agreement of all the parties interested in the property. This phase may end with a
declaration that plaintiff is not entitled to have a partition either because a co-ownership does not exist, or
partition is legally prohibited. It may end, on ¦ the other hand, with an adjudgment that a co-ownership does
in truth exist, partition is proper in the premises and an accounting of rents and profits received by the
574
defendant from the real estate in question is in order, x x x
The second phase commences when it appears that "the parties are unable to agree upon the partition"
directed by the court. In that event[,] partition shall be done for the parties by the [c]ourt with the assistance
of not more than three (3) commissioners. This second stage may well also deal with the rendition of the
accounting itself and its approval by the [cjourt after the- parties have been accorded opportunity to be heard
thereon, and an award for the recovery by the party or parties thereto entitled of their just share in the rents
and profits of the real estate in question, x x x.41redarclaw
An action for partition, therefore, is premised on the existence or non-existence of co-ownership between the
parties.42 Unless and until the issue of co-ownership is definitively resolved, it would be premature to effect
a partition of an estate.43redarclaw
In view of the foregoing, petitioner's argument that the trial court acted without jurisdiction in entertaining -
the action of settlement of estate and annulment of title in a single proceeding is clearly erroneous for the
instant complaint is precisely one for judicial partition with annulment of title and recovery of possession,
filed within the confines of applicable law and jurisprudence. Under Section 1 44 of Republic Act No. 7691
(RA 7691),45 amending Batas Pambansa Big. 129, the RTC shall exercise exclusive original jurisdiction over
all civil actions in which the subject of the litigation is incapable of pecuniary estimation. Since the action
herein was not merely for partition and recovery of ownership but also for annulment of title and documents,
the action is incapable of pecuniary estimation and thus cognizable by the RTC. Hence, considering that the
trial court clearly had jurisdiction in rendering its decision, the instant petition for annulment Sf judgment
must necessarily fail.
Note that even if the instant action was one for annulment of title alone, without the prayer for judicial
partition, the requirement of instituting a separate special proceeding for the determination of the status and
rights of the respondents as putative heirs may be dispensed with, in light of the fact that the parties had
voluntarily submitted the issue to the trial court and had already presented evidence regarding the issue of
heirship.46 In Portugal v. Portugal-Beltran,47 the Court explained:LawlibraryofCRAlaw
In the case at bar, respondent, believing rightly or wrongly that she was the sole heir to Portugal's
estate, executed on February 15, 1988 the questioned Affidavit of Adjudication under the second
sentence of Rule 74, Section 1 of the Revised Rules of Court. Said rule is an exception to the general
rule that when a person dies leaving a property, it should be judicially administered and the
competent court should appoint a qualified administrator, in the order established in Sec. 6, Rule 78 in
case the deceased left no will, or in case he did, he failed to name an executor therein.
xxxx
It appearing, however, that in the present case the only property of the intestate estate of Portugal is
the Caloocan parcel of land, to still subject it, under the circumstances of the case, to a special
proceeding which could be long, hence, not expeditious, just to establish the status of petitioners as
heirs is not only impractical; it is burdensome to the estate with the costs and expenses of an
administration proceeding. And it is superfluous in light of the fact that the parties to the civil case -
subject of the present case, could and had already in fact presented evidence before the trial court
which assumed jurisdiction over the case upon the issues it defined during pre-trial.
In fine, under the circumstances of the present case, there being no compelling reason to still subject
Portugal's estate to administration proceedings since a determination of petitioners' status as heirs
could be achieved in the civil case filed by petitioners, the trial court should proceed to evaluate the
evidence presented by the parties during the trial and render a decision thereon upon the issues it defined
during pre-trial, x x x.48
Thus, in view of the clarity of respondents' complaint and the causes of action alleged therein, as well as the
fact that the trial court, in arriving at its decision, gave petitioner more than ample opportunity to advance
his claims, petitioner cannot now be permitted to allege lack of jurisdiction just because the judgment
rendered was adverse to them. To repeat, the action filed herein is one for judicial partition and not for
settlement of intestate estate. Consequently, that respondents also prayed for the annulment of title and
recovery of possession in the same proceeding does not strip the court off of its jurisdiction for asking for
the annulment of certain transfers of property could very well be achieved in an action for partition.
As for petitioner's contention that the sale must be considered valid as to the heirs who assented to the
conveyance as well as their allegation of good faith, this Court does not find any Compelling reason to
deviate from the ruling of the appellate court. As sufficiently found by both courts below, the authenticity
and due execution of the documents on which petitioner's claims are based were inadequately proven. They
were undated, forged, and acknowledged before a notary public who was not commissioned as such on the
date they were executed. They were never presented to the Register of Deeds for registration. Neither were
the supposed notaries and buyers of the subject properties presented as witnesses.
be modified in any respect except to correct clerical errors or mistakes, all the issues between the parties
being deemed resolved and. laid to rest.53 It is a fundamental principle in our judicial system and essential to
an effective and efficient administration of justice that, once a judgment has become final, the winning party
be, not through a mere subterfuge, deprived of the fruits of the verdict.54 Exceptions to the immutability of
final judgment are allowed only under the most extraordinary of circumstances. 55Yet, when petitioner is
given more than ample opportunity to be heard, unbridled access to the appellate courts, as well as unbiased
judgments rendered after a consideration of evidence presented by the parties, as in the case at hand, the
Court shall refrain from reversing the rulings of the courts below in the absence of any showing that the
same were rendered with fraud or lack of jurisdiction.
WHEREFORE, premises considered, the instant petition is DENIED. The Decision and Resolution, dated
March 13, 2009 and April 23, 2009, respectively, of the Court Appeals in CA-G.R. SP No. 107347, which
affirmed the Judgment dated October 1, 2001 of the Regional Trial Court of Nasugbu, Batangas, Branch 14,
in Civil Case No. 217, insofar as it concerns the resort covered by Transfer Certificates of Title No. 51354
and No. 51355, and family home covered by TCT No. 40807 and 40808, are AFFIRMED.
SO ORDERED.cralawlawlibrary

While it may be argued that Benita, one of the co-heirs to the estate, actually acknowledged the sale of the
resort, the circumstances surrounding the same militate against the fact of its occurrence. Not only was the
Deed of Sale supposedly executed by Benita undated and unsigned by Pedro, but the document she
presented purportedly evidencing her receipt of her share in the sale, did not refer to any sort of sale but to a
previous loan obtained by Pedro and Benita from a bank.

Moreover, credence must be given on the appellate court's observations as to petitioners' actuations insofar
as the transactions alleged herein are concerned. First, they were seemingly uncertain as to the number
and/or identity of the properties bought by them. 49 In their Answer, they gave the impression that" they
bought both the resort and the family home and yet, during trial, Francisco Villafria claimed they only
bought the resort. In fact, it was only then that they presented the subject Extra-Judicial Settlement and Deed
of Sale.50Second, they never presented any other document which would evidence their actual payment of
consideration to the selling heirs.51Third, in spite of the blatant legal infirmities of the subject documents of
conveyance, petitioners still took possession of the properties, demolished several cottages, and introduced
permanent improvements thereon.

In all, the Court agrees with the appellate court that petitioners failed to adequately substantiate, with
convincing, credible and independently verifiable proof, their claim that they had, in fact, purchased the
subject properties. The circumstances surrounding the purported transfers cast doubt on whether they
actually took place. In substantiating their claim, petitioners relied solely on the Extra-Judicial Settlement
and Deed of Sale, who utterly failed to prove their authenticity and due execution. They cannot, therefore,
be permitted to claim absolute ownership of the subject lands based on the same.

Neither can they be considered as innocent purchasers for value and builders in good faith. Good faith
consists in the belief of the builder that the land the latter is building on is one's own without knowledge of
any defect or flaw in one's title.52 However, in view of the manifest defects in the instruments conveying
their titles, petitioners should have been placed on guard. Yet, they still demolished several cottages and
constructed improvement on the properties. Thus, their claim of good faith cannot be given credence.

Indeed, a judgment which has acquired finality becomes immutable and unalterable, hence, may no longer

575
 SECOND DIVISION
G.R. No. 138953 June 6, 2002
CASTORIO ALVARICO, petitioner,
vs.
AMELITA L. SOLA, respondent.
QUISUMBING, J.:
This is a petition for review on certiorari of the decision dated March 23, 1999 of the Court of Appeals in
CA-G.R. CV No. 54624, reversing the decision of the Regional Trial Court of Cebu City, Branch 10, for
reconveyance. Also sought to be reversed is the CA resolution dated June 8, 1999 denying petitioner's
motion for reconsideration.1âwphi1.nêt
The facts of this case are as follows:
Petitioner Castorio Alvarico is the natural father of respondent Amelita Sola while Fermina Lopez
is petitioner's aunt, and also Amelita's adoptive mother.
On June 17, 1982, the Bureau of Lands approved and granted the Miscellaneous Sales Application
(MSA) of Fermina over Lot 5, SGS-3451, with an area of 152 sq. m. at the Waterfront, Cebu City. 1
On May 28, 1983,2 Fermina executed a Deed of Self-Adjudication and Transfer of Rights3 over Lot 5 in
favor of Amelita, who agreed to assume all the obligations, duties, and conditions imposed upon Fermina
under MSA Application No. V-81066. The document of transfer was filed with the Bureau of Lands. 4 The
pertinent portions of the deed provide:
xxx
That I, FERMINA A. LOPEZ, of legal age, Filipino, widow of Pedro C. Lopez and a resident of
Port San Pedro, Cebu City, Philippines, am the AWARDEE of Lots Nos. 4, 5, 3-B, 3-C and 6-B,
Sgs-3451 And being the winning bidder at the auction sale of these parcels by the Bureau of Lands
held on May 12, 1982, at the price of P150.00 per square meter taking a purchase price
of P282,900.00 for the tract; That I have made as my partial payment the sum of P28,290.00
evidenced by Official Receipt No. 1357764-B representing ten (10%) per cent of my bid, leaving a
balance of P254,610.00 that shall be in not more than ten (10) years at an equal installments
of P25,461.00 beginning June 17, 1983 until the full amount is paid.
… the Transferee Mrs. Amelita L. Sola, agrees to assume, all the obligations, duties and conditions
imposed upon the Awardee in relation to the MSA Application No. V-81066 entered in their
records as Sales Entry No. 20476.
… [I] hereby declare that I accept this Deed of Self-Adjudication and Transfer of Rights and
further agree to all conditions provided therein.5
Amelita assumed payment of the lot to the Bureau of Lands. She paid a total amount of P282,900.6
On April 7, 1989, the Bureau of Lands issued an order approving the transfer of rights and granting the
amendment of the application from Fermina to Amelita.7 On May 2, 1989, Original Certificate of Title
(OCT) No. 3439 was issued in favor of Amelita.8
On June 24, 1993,9 herein petitioner filed Civil Case No. CEB-1419110 for reconveyance against Amelita.
He claimed that on January 4, 1984, Fermina donated the land to him 11 and immediately thereafter, he took
possession of the same. He averred that the donation to him had the effect of withdrawing the earlier transfer
to Amelita.12
For her part, Amelita maintained that the donation to petitioner is void because Fermina was no longer the
owner of the property when it was allegedly donated to petitioner, the property having been transferred
earlier to her.13 She added that the donation was void because of lack of approval from the Bureau of Lands,
and that she had validly acquired the land as Fermina's rightful heir. She also denied that she is a trustee of
the land for petitioner.14
After trial, the RTC rendered a decision in favor of petitioner, the decretal portion of which reads:
576
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and against
the defendant. Lot 5, Sgs-3451, is hereby declared as lawfully owned by plaintiff and defendant is
directed to reconvey the same to the former.
No pronouncement as to damages and attorney's fees, plaintiff having opted to forego such claims.
SO ORDERED.15
On appeal, the Court of Appeals in its decision dated March 23, 1999 reversed the RTC. Thus:
WHEREFORE, foregoing considered, the appealed decision is hereby REVERSED and SET
ASIDE. The complaint filed by plaintiff-appellee against defendant-appellant is hereby
DISMISSED.
Costs against plaintiff-appellee.
SO ORDERED.16
Petitioner sought reconsideration, but it was denied by the CA.17
Hence, the instant petition for certiorari seasonably filed on the following grounds:
I.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR, REFLECTIVE
OF UNMINDFUL RECKLESSNESS WHICH IS THE VERY OPPOSITE OF JUDICIAL
CIRCUMSPECTION, IN DECLARING THAT THE DEED OF DONATION DATED
JANUARY 4, 1984 (ANNEX "C") IN FAVOR OF PETITIONER WAS EMBODIED ONLY IN
A PRIVATE DOCUMENT (Page 6, Decision, Annex "A"), ALTHOUGH, BY A MERE
CASUAL LOOK AT THE DOCUMENT, IT CAN BE READILY DISCERNED THAT IT IS
NOTARIZED;
II.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR IN APPLYING
ON THE CASE AT BAR THE PRINCIPLE IN LAW THAT IT IS REGISTRATION OF THE
SALES PATENT THAT CONSTITUTE THE OPERATIVE ACT THAT WOULD CONVEY
OWNERSHIP OF THE LAND TO THE APPLICANT (Pp. 3-6, Decision, Annex "A") BECAUSE
THE LEGAL CONTROVERSY BETWEEN PETITIONER AND RESPONDENT DOES NOT
INVOLVE CONFLICTING CLAIMS ON SALES PATENT APPLICATIONS;
III.
THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND
COMMITTED SERIOUS ERROR IN MAKING A FINDING THAT RESPONDENT
ACQUIRED THE LAND IN QUESTION, IN GOOD FAITH (Page 7, Decision, Annex "A"),
ALTHOUGH THERE IS NO BASIS NOR NEED TO MAKE SUCH A FINDING; and
IV.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR IN
ENUNCIATING THAT POSSESSION MENTIONED IN ARTICLE 1544 OF THE NEW CIVIL
CODE INCLUDE SYMBOLIC POSSESSION, UPON WHICH THE APPELLATE COURT
BASED ITS CONCLUSION THAT RESPONDENT WAS FIRST IN POSSESSION BECAUSE
THE DEED OF SELF-ADJUDICATION AND TRANSFER OF RIGHTS IN FAVOR OF
RESPONDENT DATED MAY 28, 1983 WAS EXECUTED MUCH EARLIER THAN THE
DEED OF DONATION IN FAVOR OF PETITIONER DATED JANUARY 4, 1984 (Pages 7-8,
Decision, Annex "A").18
The crucial issue to be resolved in an action for reconveyance is: Who between petitioner and respondent
has a better claim to the land?
To prove she has a better claim, respondent Amelita Sola submitted a copy of OCT No. 3439 in her name
and her husband's,19 a Deed of Self-Adjudication and Transfer of Rights20 over the property dated 1983
executed by Fermina in her favor, and a certification from the municipal treasurer that she had been
declaring the land as her and her husband's property for tax purposes since 1993. 21
For his part, petitioner Castorio Alvarico presented a Deed of Donation 22 dated January 4, 1984, showing WHEREFORE, the appealed decision of the Court of Appeals in CA-G.R. CV No. 54624 is
that the lot was given to him by Fermina and according to him, he immediately took possession in 1985 and hereby AFFIRMED. The complaint filed by herein petitioner against respondent in Civil Case No. CEB-
continues in possession up to the present.23 14191 is declared properly DISMISSED. Costs against petitioner.
Petitioner further contests the CA ruling that declared as a private document said Deed of Donation dated SO ORDERED.
January 4, 1984, despite the fact that a certified true and correct copy of the same was obtained from the
Notarial Records Office, Regional Trial Court, Cebu City on June 11, 1993 and acknowledged before Atty.
Numeriano Capangpangan, then Notary Public for Cebu.24
Given the circumstances in this case and the contentions of the parties, we find that no reversible error was
committed by the appellate court in holding that herein petitioner's complaint against respondent should be
dismissed. The evidence on record and the applicable law indubitably favor respondent.
Petitioner principally relies on Articles 744 and 1544 of the New Civil Code, which provide:
Art. 744. Donations of the same thing to two or more different donees shall be governed by the
provisions concerning the sale of the same thing to two or more different persons.
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in
good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first
in the possession; and, in the absence thereof, to the person who presents the oldest title, provided
there is good faith. (Emphasis supplied.)
Petitioner claims that respondent was in bad faith when she registered the land in her name and, based on the
abovementioned rules, he has a better right over the property because he was first in material possession in
good faith. However, this allegation of bad faith on the part of Amelita Sola in acquiring the title is devoid
of evidentiary support. For one, the execution of public documents, as in the case of Affidavits of
Adjudication, is entitled to the presumption of regularity, hence convincing evidence is required to assail
and controvert them.25 Second, it is undisputed that OCT No. 3439 was issued in 1989 in the name of
Amelita. It requires more than petitioner's bare allegation to defeat the Original Certificate of Title which on
its face enjoys the legal presumption of regularity of issuance. 26 A Torrens title, once registered, serves as
notice to the whole world. All persons must take notice and no one can plead ignorance of its registration. 27
Even assuming that respondent Amelita Sola acquired title to the disputed property in bad faith, only the
State can institute reversion proceedings under Sec. 101 of the Public Land Act. 28 Thus:
Sec. 101.—All actions for reversion to the Government of lands of the public domain or
improvements thereon shall be instituted by the Solicitor General or the officer acting in his stead,
in the proper courts, in the name of the Republic of the Philippines.
In other words, a private individual may not bring an action for reversion or any action which would have
the effect of canceling a free patent and the corresponding certificate of title issued on the basis thereof, such
that the land covered thereby will again form part of the public domain. Only the Solicitor General or the
officer acting in his stead may do so.29 Since Amelita Sola's title originated from a grant by the government,
its cancellation is a matter between the grantor and the grantee.30 Clearly then, petitioner has no standing at
all to question the validity of Amelita's title. It follows that he cannot "recover" the property because, to
begin with, he has not shown that he is the rightful owner thereof.1âwphi1.nêt
Anent petitioner's contention that it was the intention of Fermina for Amelita to hold the property in trust for
him, we held that if this was really the intention of Fermina, then this should have been clearly stated in the
Deed of Self-Adjudication executed in 1983, in the Deed of Donation executed in 1984, or in a subsequent
instrument. Absent any persuasive proof of that intention in any written instrument, we are not prepared to
accept petitioner's bare allegation concerning the donor's state of mind.

577
 SECOND DIVISION
G.R. No. 172720, September 14, 2015
ELISEO MALTOS AND ROSITA P. MALTOS, Petitioners, v. HEIRS OF EUSEBIO
BORROMEO, Respondents.
DECISION
LEONEN, J.:
The sale of a parcel of agricultural land covered by a free patent during the five-year prohibitory period
under the Public Land Act is void. Reversion of the parcel of land is proper. However, reversion under
Section 101 of the Public Land Act is not automatic. The Office of the Solicitor General must first file an
action for reversion.
On February 13, 1979, Eusebio Borromeo was issued Free Patent No. 586681 over a piece of agricultural
land located in San Francisco, Agusan del Sur, covered by Original Certificate of Title No. P-9053.1
On June 15, 1983, well within the five-year prohibitory period, Eusebio Borromeo sold the land to Eliseo
Maltos.2
Eusebio Borromeo died on January 16, 1991. His heirs claimed that prior to his death, he allegedly told his
wife, Norberta Borromeo,3 and his children to nullify the sale made to Eliseo Maltos and have the Transfer
Certificate of Title No. T-5477 cancelled because the sale was within the five-year prohibitory period.4
On June 23, 1993, Norberta Borromeo and her children (heirs of Borromeo) filed a Complaint for Nullity of
Title and Reconveyance of Title against Eliseo Maltos, Rosita Maltos, and the Register of Deeds of Agusan
del Sur.5 The case was docketed as Civil Case No. 946.6
Eliseo Maltos and Rosita Maltos (Maltos Spouses) filed their Answer, arguing that the sale was made in
good faith and that in purchasing the property, they relied on Eusebio Borromeo's title. Further, the parties
were in pari delicto. Since the sale was made during the five-year prohibitory period, the land would revert
to the public domain and the proper party to institute reversion proceedings was the Office of the Solicitor
General.7
The Register of Deeds of Agusan del Sur also filed an Answer, arguing that the deed of sale was presented
for Registration after the five-year prohibitory period, thus, it was ministerial on its part to register the deed. 8
The heirs of Borromeo countered that good faith was not a valid defense because the prohibitory period
appeared on the face of the title of the property.9
The Regional Trial Court10 of Prosperidad, Agusan del Sur narrowed down the issues to the following:
1. Whether or not the herein plaintiffs are the legal heirs of the late Eusebio Borromeo.
2. Whether or not the sale of the disputed property within the prohibitory period is valid or binding. 11
The trial court dismissed the Complaint on the ground of failure to state a cause of action. 12 Also, the heirs
578
of Borromeo did not have a right of action because they were unable to establish their status as heirs of the
late Eusebio Borromeo.13 They may have declared themselves the legal heirs of Eusebio Borromeo, but they
did not present evidence to prove their allegation.14 Further, the determination of their rights to succession
must be established in special proceedings.15
The trial court also ruled that "[t]he sale was null and void because it was within the five (5) year
prohibitionary [sic] period"16 under the Public Land Act.17 The defense of indefeasibility of title was
unavailing because the title to the property stated that it was "subject to the provisions of Sections 118, 119,
121, 122 and 124"18 of the Public Land Act.19 Since the property was sold within the five-year prohibitory
period, such transfer "result[ed] in the cancellation of the grant and the reversion of the land to the public
domain."20
As to the defense of in pari delicto, the trial court ruled against its applicability, 21 citing Egao v. Court of
Appeals (Ninth Division).22
The rule of pari delicto non oritur action (where two persons are equally at fault neither party may be
entitled to relief under the law), admits of exceptions and does not apply to an inexistent contract, such as, a
sale void ab initio under the Public Land Act, when its enforcement or application runs counter to the public
policy of preserving the grantee's right to the land under the homestead law. 23 (Citation
omitted)ChanRoblesVirtualawlibrary
The trial court further held that since the sale was null and void, no title passed from Eusebio Borromeo to
Eliseo Maltos.24 The dispositive portion of the trial court's Decision states:
WHEREFORE, for lack of merit, the complaint under consideration is hereby ordered DISMISSED. No
pronouncement as to costs.
SO ORDERED.25
On appeal, the heirs of Borromeo argued that they were able to prove their status as heirs through the
testimony of their mother, Norberta Borromeo.26
The heirs of Borromeo also argued that the trial court should have ordered the "revival of [Original
Certificate of Title] No. P-9053 in the name of the Heirs of EUSEBIO BORROMEO."27
The Court of Appeals28 reversed the Decision of the trial court and held that since Eusebio Borromeo sold
his property within the five-year prohibitory period, the property should revert to the state. 29 However, the
government has to file an action for reversion because "reversion is not automatic." 30 While there is yet no
action for reversion instituted by the Office of the Solicitor General, the property should be returned to the
heirs of Borromeo.31 The dispositive portion of the Court of Appeals' Decision states:
WHEREFORE, premises considered, the instant Appeal is GRANTED. The Decision of the court a quo in
Civil Case No. 946 is hereby SET ASIDE and another one is entered (1) ordering Appellee ELISEO
MALTOS to reconvey the property subject matter of this litigation to Appellants upon the refund by the
latter to Appellee ELISEO MALTOS the sum of P36,863.00, all expenses for the reconveyance to be borne
by the buyer, ELISEO MALTOS, herein Appellee and (2) ordering the Register of Deeds of Prosperidad,
Agusan del Sur to cancel TCT No. T-5477 and revive OCT No. P-9053.
Let a copy of this Decision be furnished! the Office of the Solicitor General (OSG) for its information and
appropriate action and to inform this court within a period of thirty (30) days from receipt hereof of the
action done under the premises.

SO ORDERED.32 (Emphasis supplied)
The Maltos Spouses filed a Motion for Reconsideration, arguing that since the prohibition on transfers of
property is provided by law, only the heirs of Borromeo should be punished. 33 Punishment, in this case,
would come in the form of preventing the heirs of Borromeo from re-acquiring the land.34 Instead, the land
should revert back to the state.35 The Maltos Spouses also prayed that they be reimbursed for the
improvements they introduced on the land.36 Assuming that they would be found to be also at fault, the
principle of in pari delicto should apply.37
The Court of Appeals38 denied the Motion for Reconsideration,39 reasoning that it could not rule on the issue
of who between the parties had the better right to the property. 40 Also, it was the government who should
decide whether the heirs of Borromeo "should retain ownership of the land." 41 With regard to the
applicability of the in pari delicto doctrine, the Court of Appeals held that in pari delicto does not apply in
cases where its application will violate the policy of the state.42
On May 10, 2006, the Maltos Spouses |filed a Petition 43 for Review before this court, questioning the
Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 77142.44
This court, in a Resolution45 dated July 5, 2006, required the heirs of Borromeo to file their Comment.
The heirs of Borromeo filed their Comment,46 which was noted by this court in a Resolution47 dated
September 25, 2006. In the same Resolution, this court required the Maltos Spouses to file their Reply. 48
In a Resolution dated March 28, 2007, this court required Attys. Ma. Cherell L. De Castro and Gener C.
Sansaet, counsels for the Maltos Spouses, to show cause why they should not be disciplinarily dealt with for
their failure to file a Reply. They were also required to comply with the Resolution dated September 25,
2006.50
Counsels for the Maltos Spouses filed a] Compliance,51 together with the Reply.52 In a Resolution53 dated
August 15, 2007, this court noted and accepted the Compliance, and also noted the Reply.
I
The Maltos Spouses argue that the heirs of Borromeo did not present evidence to prove that they are indeed
the heirs of Eusebio Borromeo. The heirs of Borromeo did not present the death certificate of Eusebio
Borromeo, the marriage certificate of Eusebio Borromeo and Norberta Borromeo, or any of the birth
certificates of the children of Eusebio.54 While Norberta Borromeo and two of her children testified, 55 their
testimonies should be considered as self-serving.56 The Maltos Spouses cite Article 17257 of the Family
Code, which enumerates how filiation may be established. 58
The Maltos Spouses also contest the Court of Appeals' ruling stating that they did not rebut the testimonies
of the heirs of Borromeo because they continuously argued that the heirs of Borromeo were unable to prove
their status as heirs.59
The Maltos Spouses further argue that it was error for the Court of Appeals not to apply the in pari delicto
rule, considering that the sale violated Section 11860 of the Public Land Act.61 Since both parties are at fault,
it follows that Article 141262 of the Civil Code applies.63
In addition, the Maltos Spouses pray for the reimbursement of the value of the improvements on the
579
property to prevent unjust enrichment on the part of the heirs of Borromeo. 64 The Maltos Spouses enumerate
the following circumstances to show why they should be reimbursed:
a. EUSEBIO has already long received and enjoyed the amount of the purchase price of the subject land
from petitioners.
b. The value of the purchase price of PHP36,863.00 paid in 1983 have since then greatly depreciated. If
petitioners had deposited that money in bank or loaned it to another person instead of purchasing
EUSEBIO's property, it would have at least earned some interest. However, the Court of Appeals incorrectly
assumed that the return of the purchase price would be sufficient compensation to the petitioners.
c. The value of the improvements introduced by petitioners on the subject property is much greater than the
purchase price that they initially paid on the land. Petitioners estimate the value of the improvements,
including hundreds of various fruit-bearing trees and four residential houses, to be at least PHP900,000.00.
Because of these improvements, not only can respondents sell the land at a much higher price, they can even
sell the improvements and profit from them. It would be the height of injustice if all the petitioners would
receive in turning over the subject property to the respondents is the purchase price that was previously paid
EUSEBIO under the deed of sale.65ChanRoblesVirtualawlibrary
On the other hand, the heirs of Borromeo argue that the testimonies of Norberta Borromeo and Susan
Borromeo Morales on their relationship to Eusebio Borromeo were not refuted by the Malios Spouses. Thus,
they were able to prove their status as heirs.66
The heirs of Borromeo also argue that the in pari delicto rule is not applicable because in Santos v. Roman
Catholic Church of Midsayap, et al.,67 this court stated that the in pari delicto rule does not apply if its
application will have the effect of violating public policy.68
With regard to the claim for reimbursements, the heirs of Borromeo argue that the Maltos Spouses did not
raise their claim for reimbursement in their Answer to the Complaint. They are now barred from claiming
reimbursement since this was not raised at the first instance.69
Based on the arguments of the parties, the issues for resolution are:
First, whether the Court of Appeals erred in reversing the Decision of the trial court and ordering the
reconveyance of the property from petitioners Spouses Eliseo Maltos and Rosita Maltos to respondents heirs
of Eusebio Borromeo;cralawlawlibrary
Second, whether the Court of Appeals erred in not applying the doctrine of in pari delicto; and
Finally, whether the Court of Appeals erred in ruling that petitioners Spouses Eliseo Maltos and Rosita
Maltos are not entitled to reimbursement for the improvements they introduced on the land.
II
The five-year period prohibiting the sale of land obtained under homestead or free patent is provided under
Section 118 of the Public Land Act, which states:
SECTION 118. Except in favor of the Government or any of its branches, units, or institutions, or legally
constituted banking corporations, lands acquired under free patent or homestead provisions shall not be
subject to encumbrance or alienation from the date of the approval of the application and for a term of five
years from and after the date of issuance1 of the patent or grant, nor shall they become liable to the
satisfaction of any debt contracted prior to the expiration of said period; but the improvements or crops on
the land may be mortgaged] or pledged to qualified persons, associations, or corporations.
The reason for prohibiting the alienation or encumbrance of properties covered by patent or grant was
explained in Metropolitan Bank and Trust Company v. Viray.70
In Metropolitan Bank, Edgardo D. Viray and his wife contracted several loans with Metrobank which they
failed to pay.71 Metrobank filed a Complaint for sum of money before the Regional Trial Court in
Manila.72In 1982, during the pendency of the case, free patents over three parcels of land were issued in
favor of Viray.73 The Complaint for sum of money was decided in 1983 in favor of Metrobank. 74 In 1984,
the trial court issued a writ of execution over the parcels of land. 75 An auction sale was held, and Metrobank
emerged as the winning bidder.76 Viray filed an action for annulment of sale.77 This court ruled that the
auction sale was made within the five-year prohibitory period78 and explained that:
[T]he main purpose in the grant of a freq patent of homestead is to preserve and keep in the family of the
homesteader that portion of public land which the State has given to him so he may have a place to live with
his family and become a happy citizen and a useful member of the society. In Jocson v. Soriano, we held
that the conservation of a family home is the purpose of homestead laws. The policy of the state is to foster,
families as the foundation of society, and thus promote general welfare. . . .
Section 118 of CA 141, therefore, is predicated on public policy. Its violation gives rise to the cancellation
of the grant and the reversion of the land and its improvements to the government at the instance of the
latter. The provision that "nor shall they become liable to the satisfaction of any debt contracted prior to that
expiration of the five-year period" is mandatory and any sale made in violation of such provision is void and
produces no effect whatsoever, just like what transpired in this case. Clearly, it is not within the competence
of any citizen to barter away what public policy by law seeks to preserve. 79 (Citations omitted)
In Republic v. Court of Appeals,80 Josefina L. Morato applied for free patent over a parcel which was
granted.81 Morato mortgaged and leased a portion of the land within the five-year prohibitory period.82Later
on, it would also be discovered that Morato's land formed part of Calauag Bay. 83 The Republic filed a
Complaint for cancellation of title and reversion of the parcel of land. 84 This court held that "lease" and
"mortgage" were encumbrances on the parcel of land.85 This court also discussed the policy behind the five-
year prohibitory period:
It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the State
to land-destitute citizens for their home and cultivation. Pursuant to such benevolent intention the State
prohibits the sale or encumbrance of the homestead (Section 116) within five years after the grant of the
patent. After that five-year period the law impliedly permits alienation of the homestead; but in line with the
primordial purpose to favor the homesteader and his family the statute provides that such alienation or
conveyance (Section 117) shall be subject to the right of repurchase by the homesteader, his widow or heirs
within five years. This section 117 is undoubtedly a complement of Section 116. It aims to preserve and
keep in the family of the homesteader that portion of public land which the State had gratuitously given to
him. It would, therefore, be in keeping with this fundamental idea to hold, as we hold, that the right to
repurchase exists not only when the original homesteader makes the conveyance, but also when it is made
by his widow or heirs. This construction is clearly deducible from the terms of the
statute.ChanRoblesVirtualawlibrary
The effect of violating the five-year prohibitory period is provided under Section 124 of the Public Land
Act, which provides:
SECTION 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed in
violation of any of the provisions of sections one hundred and eighteen, one hundred and twenty, one
580
hundred and twenty-one, one hundred and twenty-two, and one hundred and twenty-three of this. Act shall
be unlawful and null and void from its execution and shall produce the effect of annulling and cancelling the
grant, title, patent, or permit originally issued, recognized or confirmed, actually or presumptively, and
cause the reversion of the property and its improvements to the State.
In this case, Section 10187 of the Public Land Act is applicable since title already vested in Eusebio
Borromeo's name. Both the trial court and the Court of Appeals found that the sale was made within the
five-year prohibitory period. Thus, there is sufficient cause to revert the property in favor of the state.
However, this court cannot declare reversion of the property in favor of the state in view of the limitation
imposed by Section 101 that an action for reversion must first be filed by the Office of the Solicitor
General.
III
The doctrine of in pari delicto non oritur actio is inapplicable when public policy will be violated.
constitute criminal offenses.
The in pari delicto rule is provided under Articles 1411 and 1412 of the Civil Code. Article 1411 pertains to
acts that constitute criminal offenses, while Article 1412 pertains to acts that do not These provisions state:
ART. 1411. When the nullity proceeds from the illegality of the cause or object of the contract, and the act
constitutes a criminal offense, both parties being in pari delicto, they shall have no action against each other,
and both shall be prosecuted. Moreover, the provisions of the Penal Code relative to the disposal of effects
or instruments of a crime shall be applicable to the things or the price of the contract.
This rule shall be applicable when only one of the parties is guilty; but the innocent one may claim what he
has given, and shall not be bound to comply with his promise.
ART. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal
offense, the following rules shall be observed:
(1) When the fault is on the part of both contracting parties, neither may recover what he has given by virtue
of the contract, or demand the performance of the other's undertaking;cralawlawlibrary
(2) When only one of the contracting parties is at fault, he cannot recover what he has given by reason of the
contract, or ask for the fulfilment of what has been promised him. The other, who is not at fault, may
demand the return of what he has given without any obligation to comply with his promise.
Santos involved the sale of a parcel of land within the five-year prohibitory period.88 The Roman Catholic
Church raised the defense of in pari delicto.89 It was also argued by the Rornan Catholic Church that the
effect of the sale would be the reversion of the] property to the state. 90 This court held that:
Section 124 of the Public Land Act indeed provides that any acquisition, conveyance or transfer executed in
violation of any of its provisions shall be null and void and shall produce the effect of annulling and
cancelling the grant or patent and cause the reversion of the property to the State, and the principle of pari
delicto has been applied by this Court in a number of cases wherein the parties to a transaction have proven
to be guilty of effected the transaction with knowledge of the cause of its invalidity. But we doubt if these
principles can now be invoked considering the philosophy and the policy behind the approval of the Public
Land Act. The principle underlying pari delicto as known here and in the United States is not absolute in its
application. It recognizes certain exceptions one of them being when its enforcement or application runs
counter to an avowed fundamental policy or to public interest. As stated by us in the Rellosa case, "This
doctrine is subject to one important limitation, namely, [']whenever public policy is considered advanced by
allowing either party to sue for relief against the transaction[']"
The case under consideration comes within the exception above adverted to. Here appellee desires to nullify
a transaction which was done in violation of the law. Ordinarily the principle of pari delicto would apply to
her because her predecessor-in-interest has carried out the sale with the presumed knowledge of its
illegality, but because the subject of the transaction is a piece of public land, public policy requires that she,
as heir, be not prevented from re-acquiring it because it was given by law to her family for her home and
cultivation. This is the policy on which our homestead law is predicated. This right cannot be waived. "It is
not within the competence of any citizen to barter away what public policy by law seeks to preserve." We
are, therefore, constrained to hold that appellee can maintain the present action it being in furtherance of this
fundamental aim of our homestead law.91 (Emphasis supplied, citations omitted)
The non-application of the in pari delicto rule where public policy would be violated has also been applied
in other cases.
In Pajuyo v. Court of Appeals,92 this court held that in pari delicto "is not [applicable to [e]jectment
[c]ases"93 and cited Drilon v. Gaurana,94 which discussed the policy behind ejectment cases:
It must be stated that the purpose of an action of forcible entry and detainer is that, regardless of the actual
condition of the title to the property, the party in peaceable quiet possession shall not be turned out by strong
hand, violence or terror. In affording this remedy of restitution the object of the statute is to prevent breaches
of the peace and criminal disorder which would ensue from the withdrawal of the remedy, and the
reasonable hope such withdrawal would create that some advantage must accrue to those persons who,
believing themselves entitled to the possession of property, resort to force to gain possession rather than to
some appropriate action in the courts to assert their claims. 95ChanRoblesVirtualawlibrary
This court elucidated that:
Clearly, the application of the principle of pari delicto to a case of ejectment between squatters is fraught
with danger. To shut out relief to squatters on the ground of pari delicto would openly invite mayhem and
lawlessness. A squatter would oust another squatter from possession of the lot that the latter had illegally
occupied, emboldened by the knowledge that the courts would leave them where they are. Nothing would
then stand in the way of the ousted squatter from re-claiming his prior possession at all cost.
Petty warfare over possession of properties is precisely what ejectment cases or actions for recovery of
possession seek to prevent. Even the owner who has title over the disputed property cannot take the law into
his own hands to regain possession of his property. The owner must go to court. 96 (Citation omitted)
In Loria v. Muñoz, Jr.,97 Carlos Loria asked Ludolfo Muñoz, Jr. "to advance [P]2,000,000.00 for a
subcontract of a [P]50,000,000.00 river-dredging project in Guinobatan."98 Loria informed Muñoz that the
project would be awarded to Sunwest Construction and Development Corporation, and Sunwest would
subcontract to Muñoz.99 Muñoz agreed to Loria's proposal.100 When the river-dredging project was finished,
Loria did not return the P2,000,000.00 despite Muñoz's demand. 101 Complaint for sum of money.102 Loria
raised the argument that Muñoz "should not be allowed to recover the money" 103 since they were in pari
delicto.104 This court held that under the principle of unjust enrichment, the sum of money should be
returned.105 In so ruling, this court cited Gonzalo v. Tarnate, Jr.106 where it was explained that:
. . . the application of the doctrine of in pari delicto is not always rigid. An accepted exception arises when
its application contravenes well-established public policy. In this jurisdiction, public policy has been defined
as "that principle of the law which holds that no subject or citizen can lawfully do that which has a tendency
to hi injurious to the public or against the public good."ChanRoblesVirtualawlibrary
581
Unjust enrichment exists, according to Hulst v. PR Builders, Inc., "when a person unjustly retains a benefit
at the loss of another, or when a person retains money or property of another against the fundamental
principles of justice, equity and good conscience." The prevention of unjust enrichment is a recognized
public policy of the State, for Article 22 of the Civil Code explicitly provides that "[e]very person who
through an act of performance by another, or any other meins, acquires or comes into possession of
something at the expense of the latter without just or legal ground, shall return the same to him." It is wel I
to note that Article 22 "is part of the chapter of the Civil Code on Human Relations, the provisions of which
were formulated as basic principles to be observed for the rightful relationship between human beings and
for the stability of the social order; designed to indicate certain norms that spring from the fountain of good
conscience; guides for human conduct that should run as golden threads through society to the end that law
may approach its supreme ideal which is the sway and dominance of justice." 107ChanRoblesVirtualawlibrary
As the in pari delicto rule is not applicable, the question now arises as to who between the parties have a
better right to possess the subject parcel of land. This issue was addressed in Santos:
What is important to consider now is who of the parties is the better entitled to the possession of the land
while the government does not take steps to assert its title to the homestead. Upon annulment of the sale, the
purchaser's claim is reduced to the purchase price and its interest. As against the vendor or his heirs, the
purchaser is no more entitled to keep the land than any intruder. Such is the situation of the appellants.
Their right to remain in possession of the land is no better than that of appellee and, therefore, they should
not be allowed to remain in it to the prejudice of appellee during and until the government takes steps
toward its reversion to the State.108 (Emphasis supplied, citation omitted)
In Binayug v. Ugaddan,109 which involved the sale of two properties covered by a homestead patent, 110this
court cited jurisprudence showing that in cases involving the sale of a property covered by the five-year
prohibitory period, the property should be returned to the grantee. 111
Applying the ruling in Santos and Binayug, this court makes it clear that petitioners have no better right to
remain in possession of the property against respondents.
Hence, the Court of Appeals did not err in ruling that while there is yet no action for reversion filed by the
Office of the Solicitor General, the property should be conveyed by petitioners to respondents.
III
Petitioners' argument that respondents failed to establish their status as heirs is belied by their admissions
during trial and in their pleadings. Petitioners t know the identity of Eusebio Borromeo's wife. As quoted in
the trial court's Decision, petitioners alleged in their Answer that:
[I]t was the late Eusebio Borromeo and his wife who came along in Bayugan 2, San Francisco, Agusan del
Sur, requesting the said defendants to purchase their land because they badly need money and
notwithstanding the fact that they have a little amount and out of pity bought the said
land.112ChanRoblesVirtualawlibrary
In the Reply, respondents alleged:
The allegation that the late Eusebio Borrjomeo and his wife went to Bayugan II, San Francisco, Agusan del
Sur in order to sell the land to the defendant Eliseo Maltos has no factual basis, the truth of the matter is that
the late Eusebio Borromeo, together with defendant Eliseo Maltos went to Esperanza, Sultan Kudarat to
secure the signature of the wife.113
In addition, when petitioner Eliseo Maltos was presented in court, he identified the signatures of the
witnesses on the deed of sale as the signatures of Eusebio Borromeo's children, namely, Susan, Ana, and
Nicolas Borromeo.114
Respondents' allegation that they are the heirs of Borromeo is admitted by petitioners. Thus, the Court of
Appeals did not err in ruling that "the fact that Appellants [referring to respondents] are the spouse and
children of the late EUSEBIO remains unrebutted."115
IV
With regard to the claim for reimbursement, respondents argue that it was not raised as a counterclaim in the
Answer to the Complaint.
During trial, petitioner Eliseo Maltos testified that when he entered the land, there were around 100 trees,
including coconut trees and a few banana trees. He then planted additional coconut trees which, at the time
of the trial, were already bearing fruit.116 Petitioner Eliseo Maltos' testimony was not rebutted by
respondents.
The general rule is that "[a] compulsory counterclaim . . . not set up shall be barred."117 Further, the
computation of the value of the improvements on the land entails findings of fact.
In any case, the Court of Appeals did not err when it stated in its Resolution dated April 7, 2006 that:
With respect to Appellees' claim for the reimbursement of the improvements on the land in question, they
are hereby declared to have lost and forfeited the value of the necessary improvements that they made
thereon in the same manner that Appellants should lose the value of the products gathered by the Appellees
from the said land.118
The Court of Appeals cited Angeles, et at v. Court of Appeals, et al.119 and Arsenal v. Intermediate Appellate
Court.120 In Angeles, this court discussed that:
The question that now poses is whether the return of the value of the products gathered from the land by the
defendants and the expenses incurred in the construction of the dike—all useful and necessary expenses—
should be ordered to be returned by the defendants to the plaintiffs. While we believe that the rule of in pari
delicto should not apply to the sale of the homestead, because such sale is contrary to the public policy
enunciated in the homestead law, the loss of the products realized by the defendants and the value of the
necessary improvements made by them on the land should not be excepted from the application of the said
rule because no cause or reason can be cited to justify an exception. It has been held that the rule of in pari
delicto is inapplicable only where the same violates a well-established public policy.
....
We are constrained to hold that the heirs of the homesteader should be declared to have lost and forfeited
the value of the products gathered from the land, and so should the defendants lose the value of the
necessary improvements that they have made thereon.121ChanRoblesVirtualawlibrary
In Arsenal, the property covered by a homestead patent had been sold to Suralta in 1957, 122 while the
Complaint was filed before the trial court in 1974.123 The case was decided by this court in 1986.124Thus,
Suralta had been in possession of the property for approximately 17 years before a Complaint was filed.
This court held that:
The value of any improvements made on the land and the interests on the purchase price are compensated by
the fruits the respondent Suralta and his heirs received from their long possession of the
homestead.125ChanRoblesVirtualawlibrary
582
Angeles and Arsenal both involved the sale of a parcel of land covered by a homestead patent within the
five-year prohibitory period. These cases also involved the introduction of improvements on the parcel of
land by the buyer.
Restating the rulings in Angeles and Arsenal, this court finds that while the rule on in pari delicto does not
apply policy, if its effect is to violate public policy it is applicable with regard to value of the improvements
introduced by petitioner Eliseo Maltos. Petitioners had been in possession of the land for 20 years before the
heirs of Borromeo filed a Complaint. The expenses incurred by petitioners in introducing improvements on
the land for which they seek reimbursement should already be compensated by the fruits they received from
the improvements.
V
Reversion is a remedy provided under Section 101 of the Public Land Act:
SECTION 101. All actions for the reversion to the Government of lands of the public domain or
improvements thereon shall be instituted by the Solicitor-General or the officer acting in his stead, in the
proper courts, in the name of Commonwealth of the Philippines.
The purpose of reversion is "to restore public land fraudulently awarded and disposed of to private
individuals or corporations to the mass of public domain."126
The general rule is that reversion of lands to the state is not automatic, and the Office of the Solicitor
General is the proper party to file an action for reversion.
In Villacorta v. Ulanday,127 defendant-appellee Vicente Ulanday admitted that his purchase of a parcel of
land covered by a homestead patent was made within the five-year prohibitory period, but argued that since
the sale was in violation of law,128 the property should automatically revert to the state.129 This court held
that reversion was not automatic, and government must file an appropriate action so that the land may be
reverted to the state.130
Ortega v. Tan131 involved the sale and mortgage of a parcel of land covered by a free patent. 132 The series of
transactions for the sale and mortgage of the property had been initiated within the five-year prohibitory
period but was finalized after the prohibitory period.133 This court held that the sale and mortgage violated
Section 118 of the Public Land Act and that reversion was proper. 134 This court also clarified that:
[Reversion] is not automatic. The government has to take action to cancel the patent and the certificate of
title in order that the land involved may be reverted to it. Correspondingly, any new transaction would be
subject to whatever steps the government may take for the reversion to it. 135 (Citation
omitted)ChanRoblesVirtualawlibrary
Alvarico v. Solau136 involved a miscellaneous sales application over a parcel of land by Fermina
Lopez.137Subsequently, Lopez executed a deed of self-adjudication and transfer of rights in favor of Amelita
Sola.138 The Bureau of Lands approved the transfer of rights, and title was issued in Sola's name. 139Castorio
Alvarico then filed an action for reconveyance, claiming that the parcel of land was donated to him. 140 He
also alleged that Sola acquired the property in bad faith. 141 This court held that Alvarico's allegation of bad
faith was not supported by evidence and that in any case, "only the State can institute reversion proceedings
under Sec[tion] 101 of the Public Land Act."142 This court restated Section 101 of the Public Land Act:
[A] private individual may not bring an action for reversion or any action which would have the effect of
canceling a free patent and the corresponding certificate of title issued on the basis thereof, such that the
land covered thereby will again form part of the public domain. Only the Solicitor General or the officer
acting in his stead may do so. Since [the] title originated from a grant by the government, its cancellation is
a matter between the grantor and the grantee.143 (Citations omitted)ChanRoblesVirtualawlibrary
The rule in Alvarico was cited in Cawis, et al. v. Hon. Cerilles, et al.144 In Cawis, the validity of a sales
patent and original certificate of title over a parcel of land in Baguio was questioned. 145 This court denied the
Petition146 and ruled that the Complaint was actually a reversion suit, which can be filed only by the Office
of the Solicitor General or a person acting in its stead. 147
It was also discussed in Cawis that:
The objective of an action for reversion of public land is the cancellation of the certificate of title an|l the
resulting reversion of the land covered by the title to the State| This is why an action for reversion is
oftentimes designated asj an annulment suit or a cancellation suit. 148
We clarify that the remedy of reversion is not the same as the remedy of declaration of nullity of free patents
and certificate of title. In reversion, the "allegations in the complaint would admit State ownership of the
disputed land[,]"149 while in an action for the declaration of nullity of free patent and certificate of title, the
allegations would include "plaintiffs ownership of the contested lot prior to the issuance of [the] free patent
and certificate of title[.]"150
Since an action for reversion presupposes that the property in dispute is owned by the state, it is proper that
the action be filed by the Office of the Solicitor General, being the real party-in-interest.
with all rights thereto to the State." As a matter of fact, Section 29 of the Public Land Law (Commonwealth
Act No. 141) expressly ordains that any sale and encumbrance made without the previous approval of the
Secretary of Agriculture and Natural Resources "shall be null and void and shall produce the effect of
annulling the acquisition and reverting property and all rights thereto to the State, and all payments on the
purchase price theretofore made to the Government shall be forfeited." . . . .
In fact, even if a sales application were already given due course by the Director of Lands, the applicant is
not thereby conferred any right over the land covered by the application. It is the award made by the
Director to the applicant (if he is the highest bidder) that confers upon him a certain right over the land,
namely, "to take possession of the land so that he could comply with the requirements prescribed by law." It
is at this stage, when the award is made, that the land can be considered "disposed of by the Government,"
since the aforestated right of the applicant has the effect of withdrawing the land from the public domain
that is "disposable" by the Director of Lands under the provisions of the Public Land Act. . . . However, the
disposition is merely provisional because the applicant has still to comply with the requirements prescribed
by law before . . . . any patent is issued. After the requisites of the law are complied with by the applicant to
the satisfaction of the Director [of] Lands, the patent is issued. It is then that the land covered by the
application may be considered "permanently disposed of by the Government." 157(Citations omitted)
In this case, a free patent over the subject parcel of land was issued to Eusebio Borromeo. This shows that
he already had title to the property when he sold it to petitioner Eliseo Maltos. Thus, Section 101 of the
Public Land Act applies.

There is, however, an exception to the rule that reversion is not automatic. Section 29 of the Public Land Act WHEREFORE, the Petition is denied, and the Decision and Resolution of the Court of Appeals in CA-
provides: G.R. CV No. 77142 are AFFIRMED, without prejudice to the appropriate institution of a case for
SECTION 29. After the cultivation of the land has begun, the purchaser, with the approval of the Secretary reversion.
of Agriculture and Commerce, may convey or encumber his rights to any person, corporation, or association
legally qualified under this Act to purchase agricultural public lands, provided such conveyance or Let a copy of this Decision be furnished the Office of the Solicitor General for its appropriate action with
encumbrance does not affect any right or interest of the Government in the land: And provided, further, That respect to the reversion of the land in question.
the transferee is not delinquent in the payment of any installment due and payable. Any sale and
encumbrance made without the previous approval of the Secretary of Agriculture and Commerce shall be SO ORDERED.chanroblesvirtuallawlibrary
null and void and shall produce the effect of annulling the acquisition and reverting the property and all
rights to the State, and all payments on the purchase price theretofore made to the Government shall be
forfeited. After the sale has been approved, the vendor shall not lose his right to acquire agricultural public
lands under the provisions of this Act, provided he has the necessary qualifications. (Emphasis supplied)

In Francisco v. Rodriguez, et al,151 this court differentiated reversion under Sections 29 and 101 of the
Public Land Act.152 This court explained that reversion under Section 29 is self-operative, unlike Section
101 which requires the Office of the Solicitor General to institute reversion proceedings. 153 Also, Section
101 applies in cases where "title has already vested in the individual[.]" 154 The Director of Lands sought to
execute the Decision in Francisco v. Rodriguez which petitioner Ursula Francisco opposed, arguing that
only 29 hectares were reverted to the state since she was in possession of the remaining four
hectares.155 This court held that the entire property reverted to the state. 156 This court also explained
why Francisco v. Rodriguez was covered by Section 29 and not Section 101 of the Public Land Act:
By transgressing the law, i.e., allowing herself to be a dummy in the acquisition of the land and selling the
same without the previous approval of the Secretary of Agriculture and Natural Resources, plaintiff-
appellant herself [referring to Ursula Francisco] has eliminated the very source (Sales Application) of her
claim to Lot No. 595, as a consequence of which, she cannot later assert any right or interest thereon. This is
the imperative import of the pronouncements in G.R. No. L-8263 and in G.R. No. L-15605 that the
invalidity of the conveyance by plaintiff-appellant "produced as a consequence the reversion of the property

583
 THIRD DIVISION
G.R. No. 196888, July 19, 2017
AURELIA NARCISE, GLORIA A. DELA CRUZ, MARITESS O. GARCIA, PHILIP FALCON,
ENRICO M. VITUG, LYNETTE C. PONTRERAS, BONIFACIO BARRAMEDA, RAMON S.
MORADA, MANUEL G. VIOLA, ZENAIDA LANUZA, CIRILO G. SALTO, TEODORO DEL
ROSARIO, NANCY G. INSIGNE, MELANIE G. VIANA, ROMEO TICSAY, AMY J. FRANCISCO,
MARIE J. FRANCISCO, ZENAIDA LANUZA, MIGUELITO B. MARTINEZ, APOLONIO
SANTOS, MARIVIC TAN, JANE CLOR DILEMA, VALENTINO DILEMA, JOSE L. PANGAN,
ANTONIA M. MANGELEN, IMELDA MANALASTAS, TEODORICO N. ANDRADE, AIDA L.
CRUZ, MANUEL YAMBOT, JAIME SERDENA, ARIEL PALACIOS, EVE BOLNEO, LIBETINE
MODESTO, MA. AILEEN VERDE, BENNY ILAGAN, MICHELLE ROMANA, DANILO
VILLANUEVA, LEO NALUGON, ROSSANA MARASIGAN, NELIE BINAY AND ISABELITA
MENDOZA, Petitioners, v. VALBUECO, INC., Respondent.
DECISION
TIJAM, J.:
Before Us is a Petition for Review on Certiorari under Rule 45, which seeks to reverse and set aside the
Decision1 dated December 21, 2010 and Resolution 2 dated May 11, 2011 of the Court of Appeals (CA) in
CA-G.R. CV No. 89616.
Facts
On March 8, 2005, respondent Valbueco, Inc. filed an action for Annulment of the Free Patents, Certificates
of Title and Damages, docketed as Civil Case No. 8144,3 against petitioners Narcise, et al., the Department
of Natural Resources (DENR) and the Register of Deeds of Bataan before the Regional Trial Court (RTC) of
Balanga City, Branch 1.
In said Complaint, respondent alleged that it is the possessor of the subject lots in an actual, peaceful,
adverse and peaceful possession since 1970.4 Respondent averred that from 1977 until 1999, Original
Certificates of Title, Free Patents and Transfer Certificates of Title covering the lots in question were issued
in the name of petitioners.5
Instead of filing their respective Answer, petitioners filed several Motions to Dismiss on the ground of lack
of cause of action, failure to state cause of action, defect in the certificate of non-forum shopping and
prescription.
6
On December 7, 2006, the RTC issued an Order, granting petitioners' motions. The RTC ruled that the
instant case is an action for reversion because petitioners are not qualified to be issued said free patents. As
such, the land must revert back to the State. Thus, it is the Office of the Solicitor General (OSG) who is the
real party-in-interest, and not the respondent. The dispositive portion of the same
reads:chanRoblesvirtualLawlibrary
WHEREFORE, in view of the foregoing, let the instant complaint be dismissed and the motion to declare
some defendants in default is necessarily denied.
SO ORDERED.7
584
Respondent filed a motion for reconsideration, which was denied by the RTC in its Order8 dated March 7,
2017.
Undaunted, respondent filed an appeal9 before the CA. In a Decision10 dated December 21, 2010, the CA
reversed and set aside the ruling of the RTC. The CA maintained that respondent alleged all the facts
necessary to seek the nullification of the subject free patents. The fallo thereof
reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The Orders of the Regional
Trial Court of Balanga City, Branch 1 dated December 7, 2006 and March 7, 2007 are
hereby REVERSED and SET ASIDE. This case is REMANDED to the trial court for further proceedings.
SO ORDERED.11
Petitioners filed a Motion for Reconsideration,12 which was denied in a Resolution13 dated May 11, 2011.
Hence, this petition.
Issues
Petitioners interposed the following grounds for review:chanRoblesvirtualLawlibrary
I.
Whether or not the instant case is actually a reversion case, and not a case for annulment of free patents and
certificates of title;
II.
Whether or not respondent is the real party-in-interest; and
III.
Whether or not the instant case had already prescribed. 14
Our Ruling
The petition is denied.
An action for reversion, a remedy provided under Commonwealth Act No. 141, seeks to cancel the original
certificate of registration, and nullify the original certificate of title, including the transfer of certificate of
title of the successors-in-interest because the same were all procured through fraud and
misrepresentation.15 In cancelling and nullifying such title, it restores the public land fraudulently awarded
and disposed of to private individuals or corporations to the mass of public domain. Such action is filed by
the OSG pursuant to its authority under the Administrative Code. 16
On the other hand, an action for annulment of free patents and certificates of title also seeks for the
cancellation and nullification of the certificate of title, but once the same is granted, it does not operate to
revert the property back to the State, but to its lawful owner. In such action, the nullity arises not from fraud
or deceit, but from the fact that the director of the Land Management Bureau had no jurisdiction to bestow
title; hence, the issued patent or certificate of title was void ab initio.17
Thus, the difference between them lies in the allegations as to the character of ownership of the realty whose
title is sought to be nullified. In an action for reversion, the pertinent allegations in the complaint would
admit State ownership of the disputed land, while in an action for annulment of patent and certificate of title,
pertinent allegations deal with plaintiffs ownership of the contested land prior to the issuance of the same as
well as defendant's fraud or mistake in successfully obtaining these documents of title over the parcel of WHEREFORE, the instant appeal is DENIED. Accordingly, the Decision dated December 21, 2010 and
land claimed by the plaintiff.18 the Resolution dated May 11, 2011 of the Court of Appeals in CA-G.R. CV No. 89616 are AFFIRMED in
toto.
A careful perusal of respondent's complaint reads:chanRoblesvirtualLawlibrary
3. That the herein plaintiff has been in the actual, peaceful, adverse, continuous and peaceful possession SO ORDERED.
since sometime in 1970 and up to the present time, by itself and its predecessor-in-interest, some of which
it acquired by transfer of rights, claims, interest as evidence [sic] by the documents x x x and the rest
by occupation and planting of root crops and other including trees x x x.

4. That the plaintiff and its workers and employees of its ranches and the cultivation and planting of
different root crops and trees were always in the premises since 1970 or thereabouts, and their presence were
never disturbed nor molested by anybody until sometime in the year 2000 x x x. 19 (Emphasis ours)
In this view, We hold that the action is one of annulment of patents and titles. The allegations in the
complaint show that respondent asserts its ownership over the subject properties by acquisitive prescription.

Acquisitive prescription is a mode of acquiring ownership of a real or immovable property by possessor

through the requisite lapse of time. In order to ripen into ownership, possession must be in the concept of an
owner, public, peaceful and uninterrupted.20 The possession contemplated as foundation for prescriptive
right must be one under claim of title or adverse to or in prescription. 21

On this note, acquisitive prescription may either be extraordinary, which requires uninterrupted adverse
possession for 30 years,22 or ordinary, which requires possession in good faith and with a just title for a
period of ten years.23

Without going into the merits of the case, We hold that the allegations in the complaint sufficiently show
that respondent claims its ownership right by expounding on its uninterrupted possession of the same for a
period of at least 35 years. Also, respondent's claim of its possession in a public, peaceful and uninterrupted
manner constitutes an allegation of ownership by acquisitive prescription.

Being an action for annulment of patents and titles, it is the respondent who is the real party-in-interest for it
is the one claiming title or ownership adverse to that of the registered owner. 24

Moreover, We agree with the CA when it declared that petitioners' argument of failure to exhaust
administrative remedies is misguided.

It must be noted that the trial court has jurisdiction over an action of an owner of a piece of land to recover
it, if the Director of Lands, thinking that it is still disposable public land, grants a free patent to the one who
has occupancy and cultivation.25 The jurisdiction of the Director of Lands, contrary to petitioners' claim,
covers those issues between two or more applicants for a free patent,26 which is not the case here. Here,
respondent claims to be the owner of the subject properties prior to the issuance of the patents and the
corresponding certificates of title. Thus, the trial court has jurisdiction to hear the case.

Lastly, the defense of prescription is evidentiary in nature which could not be established by mere
allegations in the pleadings and must not be resolved in a motion to dismiss. Such issue must be resolved at
the trial of the case on the merits wherein both parties will be given ample opportunity to prove their
respective claims and defenses.27

Verily, the CA did not err in considering the instant case as an action for annulment of patents and titles.

585
 THIRD DIVISION
G.R. No. 147148 January 13, 2003
PILAR Y. GOYENA, petitioner,
vs.
AMPARO LEDESMA-GUSTILO, respondent.
CARPIO MORALES, J.:
From the Court of Appeals June 19, 2000 Decision which affirmed that of the Regional Trial Court (RTC)
of Makati, Branch 149 in Special Proceeding No. N-4375 appointing herein respondent Amparo Ledesma
Gustilo as guardian over the person and property of her sister Julieta Ledesma, Pilar Y. Goyena, Julieta's
close friend and companion of more than 60 years, comes to this Court on petition for review on certiorari.
On July 8, 1996, respondent filed at the RTC of Makati a "PETITION FOR LETTERS OF
GUARDIANSHIP"1 over the person and properties of her sister Julieta, the pertinent allegations of which
read:
2. That for the most part during the year 1995 and 1996, Julieta Ledesma has been a patient in the
Makati Medical Center where she is under medical attention for old age, general debility, and a
"mini"-stroke which she suffered in the United States in early 1995;
3. That Julieta Ledesma is confined to her bed and can not get up from bed without outside
assistance, and she has to be moved by wheel chair;
4. That Julieta Ledesma owns real estate and personal properties in Metro Manila and in Western
Visayas, with an aggregate estimated assessed and par value of P1 Million Pesos[;]
5. That Julieta Ledesma is not in a position to care for herself, and that she needs the assistance of
a guardian to manage her interests in on-going corporate and agricultural enterprises;
6. That the nearest of kin of Julieta Ledesma are her sisters of the full blood, namely, petitioner
Amparo Ledesma Gustilo, Teresa Ledesma (aka. Sister Cristina of the Religious of the
Assumption, and Loreto Ledesma Mapa, all of whom have given their consent to the filing of this
petition as shown by their signatures at the bottom of this petition[;]
7. That petitioner has extensive experience in business management of commercial, agricultural
and corporate enterprises, many of which are in the same entities where Julieta Ledesma holds an
interest, and that she is in a position to monitor and supervise the delivery of vitally needed
medical services to Julieta Ledesma whether in the Metro Manila area, or elsewhere.
Petitioner filed an Opposition to the petition for letters of guardianship. She later filed an Amended
Opposition on August 15, 1996 reading in part:
2.03 The petition lacked factual and legal basis in that Julieta Ledesma is competent and sane and
there is absolutely no need to appoint a guardian to take charge of her person/property. She is very
able to take charge of her affairs, and this is clearly evident from her letters to the petitioner.
Copies of her recent letters are herewith attached as Annexes "A" to "E."
xxx xxx xxx
2.05 Petitioner is not fit to be appointed as the guardian of Julieta Ledesma since their interests are
antagonistic (Sudler v. Sudler, 121 Md. 46. 49 L.R.A. 800, as cited in vol. V-B Francisco Revised
Rules of Court, Rule 93, Section 4, p. 414).
xxx xxx xxx
3.01 The above captioned petition should be dismissed for utter lack of legal and/or factual basis.
3.02 In the remote event that this Honorable Court should find that Julieta Ledesma is incompetent
and resolve that there is need to appoint a guardian over her person and property, this Honorable
Court should appoint as such guardian:
1. Oppositor Goyena;
2. Bart Lacson;
3. Fely Montelibano;
4. Jose T. Revilla; or
586
5. a qualified and reputable person as may be determined fit by this Honorable Court.
By Decision2 of October 4, 1996, the trial court found Julieta "incompetent and incapable of taking care of
herself and her property" and appointed respondent as guardian of her person and properties, ratiocinating as
follows:
A perusal of the records shows that petitioner (Amparo) is 72 years of age, the youngest sister of
Julieta. Admittedly, the Oppositor Pilar Goyena, 90 years of age has been the close friend and
companion of Julieta for 61 years. Julieta was with Oppositor when she suffered her first stroke in
Makati in 1991 which was the reason why Julieta had to give up the management of their hacienda
in Bacolod. It is also not disputed that Julieta was with Pilar when she had her second stroke in the
U.S. In short, the special bond of friendship existing between Julieta and the Oppositor cannot be
denied. Now that Julieta is unable to manage her personal life and business concerns due to senility
and "vascular dementia," the oppositor wants to be appointed her guardian or else Bart Lacson,
Fely Montelibano and Jose T. Revilla.
It is interesting to note that the oppositor has interposed her objection to the appointment of
Amparo as guardian because she thinks that the latter dislikes her. She further added that there
were a number of letters allegedly written by Julieta to Amparo which showed Julieta's sentiments
regarding certain matters. Nevertheless, not one of the nearest of kin of Julieta opposed the
petition. As a matter of fact, her sisters signified their conformity thereto. Thus, Ms. Goyena's mere
conjecture that Amparo dislikes her is no sufficient reason why the petition should be denied.
Neither does it make Amparo unsuitable and unfit to perform the duties of a guardian. On the
contrary, it is Ms. Goyena who could be considered as to have an adverse interest to that of Julieta
if it is true that 50% of Julieta's holdings at the Makati Medical Center has been transferred to her
as alleged in Exhibit 1 and Exhibit A.
By and large, the qualification of Amparo to act as guardian over the person and properties of
Julieta has been duly established. As a sister, she can best take care of Julieta's concerns and well
being. Now that Julieta is in the twilight of her life, her family should be given the opportunity to
show their love and affection for her without however denying Pilar Goyena access to her
considering the special bond of friendship between the two. Needless to say, the oppositor at 90
years of age could not be said to be physically fit to attend to all the needs of Julieta.
WHEREFORE, petitioner Amparo Gustilo, is hereby appointed guardian over the person and
property of Julieta Ledesma, an incompetent with all the powers and duties specified under the
law.
Accordingly, let letters of guardianship issue to petitioner upon her filing of a bond in the amount
of P200,000.00 to guarantee the performance of the obligations prescribed for general guardians.
SO ORDERED. (Emphasis supplied)
Petitioner's Motion for Reconsideration of the trial court's decision was, by Order of November 4, 1996 3 ,
denied in this wise:
Acting on the Motion for Reconsideration filed by the Oppositor thru counsel, and finding no
merits on the ground stated therein, considering that petitioner appears to be most qualified and
suitable to act as Julieta Ledesma's guardian after taking into consideration the qualifications of the
oppositor and her other recomendees [sic], aside from the fact that petitioner's appointment as such
was not objected to by any of her nearest kin, in contrast to the hostile interest of oppositor, the
same is hereby DENIED.
SO ORDERED.
On appeal of petitioner, the Court of Appeals affirmed the trial court's decision on the following
ratiocination:4
Indeed, oppositor-appellant (Pilar) has not shown the authenticity and due execution of the letters
which purport to show the existence of a rift between Julieta and her family and dissatisfaction as
to how the businesses were managed. At any rate, while it is correct to say that no person should
 be appointed guardian if his interest conflict with those of the ward (Guerrero vs. Teran, 13 Phil.
212), there are really no antagonistic interests to speak of between petitioner [Amparo] and Julieta,
they being co-owners of certain properties. There is also no showing that petitioner's business
decisions in the past had resulted in the prejudice of Julieta.
While the oppositor may have been very close to Julieta, there is no sufficient showing that
petitioner is hostile to the best interests of the latter. On the contrary, it was the petitioner who,
realizing the need for the appointment of a person to guard her sister's interests, initiated the
petition for guardianship. We see no indication that petitioner is animated by a desire to prejudice
Julieta's health as well as financial interests. In point of fact, it was oppositor-appellant who had
initially concealed the deteriorating state of mind of Julieta from the court. Oppositor's advanced
age of 90 years also militate against her assuming the guardianship of the incompetent. The
oppositor has declared that she is not interested to be appointed legal guardian (p. 21[,] Appellant's
Brief, Rollo, p. 59). But the persons that she points to as being better choices as Julieta's guardian
over the appellee have not acted, nor even indicated, their desire to act as such. In any case, We see
no cogent reason why We should reverse the well-reasoned disquisition of the trial court.
WHEREFORE, finding no error in the appealed decision, the same is hereby AFFIRMED.
SO ORDERED. (Emphasis supplied)
Petitioner's Motion for Reconsideration of the Court of Appeals decision having been denied, she filed the
present petition which proffers that:
THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT
IN ACCORD WITH LAW AND APPLICABLE DECISIONS OF THIS HONORABLE COURT.
THE COURT OF APPEALS HAS DEPARTED FROM THE ACCEPTED AND USUAL
COURSE OF JUDICIAL PROCEEDINGS IN AFFIRMING THE TRIAL COURT'S DECISION
DATED OCTOBER 4, 1996 AND IN ISSUING THE RESOLUTIONS DATED JUNE 29, 2000
AND FEBRUARY 9, 2001.
The petition fails.
It is well-entrenched doctrine that questions of fact are not proper subjects of appeal by certiorari under Rule
45 of the Rules of Court as this mode of appeal is confined to questions of law. 5 The test of whether the
question is one of law or of fact 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 question of fact. 6
In the case at bar, the only issue before this Court is whether or not the appellate court and the trial court
erred in finding that respondent is not unsuitable for appointment as guardian of the person and properties of
Julieta. In support of an affirmative answer, petitioner posits as follows:
1. The Court of Appeals' basis for its decision that there are no antagonistic interests between [her]
and [respondent] is contrary to the evidence on record, 7
2. The Court of Appeals' erred in holding that there is no showing that [respondent] is hostile to the
best interest of Julieta,8 and
3. Julieta Ledesma's appointed representatives are most suitable to be appointed as her guardian.9
Clearly, the issues raised and arguments in support of petitioner's position require a review of the evidence,
hence, not proper for consideration in the petition at bar. This Court cannot thus be tasked to go over the
proofs presented by the parties and analyze, assess, and weigh them to ascertain if the trial court and
appellate court were correct in according them superior credit.10
That the issues raised are factual is in fact admitted by petitioner in her Reply dated August 30, 2001:11
Although the general rule is that this Honorable Court is not a trier of facts, its jurisdiction being
limited to reviewing and revising only errors of law, it is nonetheless subject to the following
exceptions which have been laid down in a number of decisions of this Honorable Court:
(1) When the conclusion is a finding grounded entirely on speculation, surmises and
conjectures; (2) When the inference made is manifestly mistaken, absurd or impossible;
(3) When there is grave abuse of discretion; (4) When the judgment is based on a
587
misapprehension of facts; (5) When the findings of facts are conflicting; (6) When the
Court of Appeals, in making its findings, went beyond the issues of the case and the same
is contrary to the admissions of both appellants and appellee; (7) When the findings of
the Court of Appeals are contrary to those of the trial court; (8) When the findings of facts
are conclusions without citation of specific evidence on which they are based; (9) When
the facts set forth in the petition as well as in the petitioners' main and reply briefs are not
disputed by the respondents; and (10) When the findings of fact of the Court of Appeals
is premised on the supposed absence of evidence and is contradicted by the evidence on
record (Emphasis supplied); (Rollo, 350–351)
Petitioner claims that "there is no doubt that the instant petition falls within the above-stated exceptions
because the findings of the Court of Appeals are clearly belied by the evidence on record." 12
In the selection of a guardian, a large discretion must be allowed the judge who deals directly with the
parties.13 As this Court said:
As a rule, when it appears that the judge has exercised care and diligence in selecting the guardian, and has
given due consideration to the reasons for and against his action which are urged by the interested
parties, his action should not be disturbed unless it is made very clear that he has fallen into grievous error.14
In the case at bar, petitioner has not shown that the lower courts committed any error.
Petitioner cannot rely on Garchitorena v. Sotelo15 with respect to the existence of antagonistic interests
between respondent and Julieta. In that case, the interest of Perfecto Gabriel as creditor and mortgagee of the
minor-wards' properties (a house and lot) is antagonistic to the interest of the wards as mortgagors, hence,
Gabriel's appointment as guardian was erroneous. For while he sought to foreclose the wards' properties as
creditor and mortgagee on one hand, he had to, on the other hand, endeavor to retain them for the wards as
their guardian. Added to that was Gabriel's appointment as guardian without him informing the guardianship
court that he held a mortgage on the properties. Furthermore, he deliberately misinformed the said court that
the first mortgagee was the Santa Clara Monastery when it was him. None of the said circumstances obtain
in the present case.
Petitioner can neither rely on certain letters of Julieta to establish her claim that there existed 16 a rift between
the two which amounts to antagonistic interests. The first letter17 sent by Julieta to respondent which reads:
x x x So if you (appellee) do not agree with me (Julieta) my decision is right to let us divide as
soon as possible, so we will have capital each of us to work, and keep the Hda, for [sic] generation
to generation.
xxx xxx xxx
For the last time I will repeat even if I have to kneel before you and Carlos I have no interest
anymore in any future investment due to my age and being single and alone in life. I would like to
be able to enjoy whatever monies that correspond to me. I would like to have enough money as a
reserve for any future need that I might have like hospitalization, travel, buying whatever I like,
etc. etc. (Letter to appellee; Exhibit "2")
merely shows Julieta's lack of interest in future investments, not necessarily a business disagreement, and
certainly not per se amounting to antagonistic interests between her and respondent to render the latter
unsuitable for appointment as guardian.
The second letter18 which reads:
My mind is still clear to tell you about Fortuna when I had my stroke I was confined in MMC for
one month. If I am not mistaken you did not visit me. One day Carlos came to visit me and asked
me this question. Do you think you will be able to continue managing the Hda? I answered him I
don't know it all depends on my sickness. Carlos said who do you want to take your place? I said I
want Cheling Zabaljauregui. Then Carlos said O.K. He asked Pilar can you contact Cheling? Tell
him to call me or see me. The nephew of Cheling was a resident in MMC through him Pilar was
able to contact Cheling and gave him Carlo's message. So I thought all the time it was agreeable. I
left for USA for treatment. To my surprise when I came back from USA it was not Cheling, but
 you (appellee) took over the management as you requested. Carlos did not tell me but decided in
your favor. . . . (Letter to appellee; Exhibit "3"; emphasis supplied)
shows that: 1) respondent did not visit Julieta when she was confined at the Makati Medical Center on
account of her stroke, 2) there was disagreement as to who should run the hacienda, with Julieta favoring a
certain Cheling Zabaljaurigue, and 3) respondent took over management of the hacienda with their brother
Carlos (Ledesma) supporting her. No inference as to the existence of antagonistic interests between
respondent and Julieta can thus be made.
The third letter19 which reads:
. . . Carlos went to the house before I left and asked from me twenty thousand (20,000) shares of
San Carlos Milling which you gave because I wanted to sell all. . . . If he does not sell or cannot
sell, just arrange to send them back to me. Amparing since I came here to America and Vancouver
my requests have been ignored. Everyone is suspecting that Pilar is the one ordering or
commanding me that is not true. What I asked from Julio is just to report to me or send me reports
so I can follow up from here. But up to now he has ignored my requests x x x . (Letter to appellee
Exhibit "4")
has no relevance to the issue of whether or not the lower courts erred in finding that respondent is not
unsuitable for appointment as guardian. The letter in fact discloses, that it was Julieta's nephew Julio
Ledesma, and not respondent, who ignored the "request."
As for the fourth letter20 which reads:
I want all of you to know that whatever decision now and in the future I want to do nobody can
stop me especially regarding my properties, money, etc. I will be the only one to dispose of it
because it is mine. You said to Raul you are going to court, you are most welcome x x x . (Letter to
Connie, Exhibit "5")
it has also no relevance to the issue in the case at bar. The letter is not even addressed to respondent but to a
certain Connie (a sister-in-law of Julieta).
Petitioner's assertion that respondent's intent in instituting the guardianship proceedings is to take control of
Julieta's properties and use them for her own benefit 21 is purely speculative and finds no support from the
records.
The claim that respondent is hostile to the best interests of Julieta also lacks merit. That respondent removed
Julieta from the Makati Medical Center where she was confined after she suffered a stroke does not
necessarily show her hostility towards Julieta, given the observation by the trial court, cited in the present
petition, that Julieta was still placed under the care of doctors 22 after she checked out and was returned to the
hospital when she suffered another stroke.
Finally, this Court notes two undisputed facts in the case at bar, to wit: 1) Petitioner opposed the petition for
the appointment of respondent as guardian before the trial court because, among other reasons, she felt she
was disliked by respondent,23 a ground which does not render respondent unsuitable for appointment as
guardian, and 2) Petitioner concealed the deteriorating state of mind of Julieta before the trial court, 24 which
is reflective of a lack of good faith.
Discussion of the third argument is unnecessary, the suitability of Amparo for appointment as guardian not
having been successfully contested.
ACCORDINGLY, for lack of merit, the petition is hereby DISMISSED.
SO ORDERED.

588
 THIRD DIVISION
G.R. No. 110427 February 24, 1997
The Incompetent, CARMEN CAÑIZA, represented by her legal guardian, AMPARO
EVANGELISTA, petitioner,
vs.
COURT OF APPEALS (SPECIAL FIRST DIVISION), PEDRO ESTRADA and his wife, LEONORA
ESTRADA, respondents.
NARVASA, C.J.:
On November 20, 1989, being then ninety-four (94) years of age, Carmen Cañiza, a spinster, a retired
pharmacist, and former professor of the College of Chemistry and Pharmacy of the University of the
Philippines, was declared incompetent by judgment1 of the Regional Trial Court of Quezon City, Branch
107,2 in a guardianship proceeding instituted by her niece, Amparo A. Evangelista.3 She was so adjudged
because of her advanced age and physical infirmities which included cataracts in both eyes and
senile dementia. Amparo A. Evangelista was appointed legal guardian of her person and estate.
Cañiza was the owner of a house and lot at No. 61 Tobias St., Quezon City. On September 17, 1990, her
guardian Amparo Evangelista commenced a suit in the Metropolitan Trial Court (MetroTC) of Quezon City
(Branch 35) to eject the spouses Pedro and Leonora Estrada from said premises. 4 The complaint was later
amended to identify the incompetent Cañiza as plaintiff, suing through her legal guardian, Amparo
Evangelista.
The amended Complaint5 pertinently alleged that plaintiff Cañiza was the absolute owner of the property in
question, covered by TCT No. 27147; that out of kindness, she had allowed the Estrada Spouses, their
children, grandchildren and sons-in-law to temporarily reside in her house, rent-free; that Cañiza already had
urgent need of the house on account of her advanced age and failing health, "so funds could be raised to
meet her expenses for support, maintenance and medical treatment;" that through her guardian, Cañiza had
asked the Estradas verbally and in writing to vacate the house but they had refused to do so; and that "by the
defendants' act of unlawfully depriving plaintiff of the possession of the house in question, they . . (were)
enriching themselves at the expense of the incompetent, because, while they . . (were) saving money by not
paying any rent for the house, the incompetent . . (was) losing much money as her house could not be rented
by others." Also alleged was that the complaint was "filed within one (1) year from the date of of first letter
of demand dated February 3, 1990."
In their Answer with Counterclaim, the defendants declared that they had been living in Cañiza's house
since the 1960's; that in consideration of their faithful service they had been considered by Cañiza as her
own family, and the latter had in fact executed a holographic will on September 4, 1988 by which she
"bequeathed" to the Estradas the house and lot in question.
Judgment was rendered by the MetroTC on April 13, 1992 in Cañiza's favor, 6 the Estradas being ordered to
vacate the premises and pay Cañiza P5,000.00 by way of attorney's fees.
But on appeal,8 the decision was reversed by the Quezon City Regional Trial Court, Branch 96. 9 By
judgment rendered on October 21, 1992, 10 the RTC held that the "action by which the issue of defendants'
possession should be resolved is accion publiciana, the obtaining factual and legal situation . . demanding
adjudication by such plenary action for recovery of possession cognizable in the first instance by the
Regional Trial Court."
Cañiza sought to have the Court of Appeals reverse the decision of October 21, 1992, but failed in that
attempt. In a decision 11 promulgated on June 2, 1993, the Appellate Court 12 affirmed the RTC's
judgment in toto. It ruled that (a) the proper remedy for Cañiza was indeed an accion publiciana in the RTC,
not an accion interdictal in the MetroTC, since the "defendants have not been in the subject premises as
mere tenants or occupants by tolerance, they have been there as a sort of adopted family of Carmen Cañiza,"
589
as evidenced by what purports to be the holographic will of the plaintiff; and (b) while "said will, unless and
until it has passed probate by the proper court, could not be the basis of defendants' claim to the property, . .
it is indicative of intent and desire on the part of Carmen Cañiza that defendants are to remain and are to
continue in their occupancy and possession, so much so that Cañiza's supervening incompetency can not be
said to have vested in her guardian the right or authority to drive the defendants out." 13
Through her guardian, Cañiza came to this Court praying for reversal of the Appellate Court's judgment. She
contends in the main that the latter erred in (a) holding that she should have pursued an accion publiciana,
and not an accion interdictal; and in (b) giving much weight to "a xerox copy of an alleged holographic will,
which is irrelevant to this case." 14
In the responsive pleading filed by them on this Court's requirement, 15 the Estradas insist that the case
against them was really not one of unlawful detainer; they argue that since possession of the house had not
been obtained by them by any "contract, express or implied," as contemplated by Section 1, Rule 70 of the
Rules of Court, their occupancy of the premises could not be deemed one "terminable upon mere demand
(and hence never became unlawful) within the context of the law." Neither could the suit against them be
deemed one of forcible entry, they add, because they had been occupying the property with the prior consent
of the "real owner," Carmen Cañiza, which "occupancy can even ripen into full ownership once the
holographic will of petitioner Carmen Cañiza is admitted to probate." They conclude, on those postulates,
that it is beyond the power of Cañiza's legal guardian to oust them from the disputed premises.
Carmen Cañiza died on March 19, 1994, 16 and her heirs — the aforementioned guardian, Amparo
Evangelista, and Ramon C. Nevado, her niece and nephew, respectively — were by this Court's leave,
substituted for her. 17
Three issues have to be resolved: (a) whether or not an ejectment action is the appropriate judicial remedy
for recovery of possession of the property in dispute; (b) assuming desahucio to be proper, whether or not
Evangelista, as Cañiza's legal guardian had authority to bring said action; and (c) assuming an affirmative
answer to both questions, whether or not Evangelista may continue to represent Cañiza after the latter's
death.
I
It is axiomatic that what determines the nature of an action as well as which court has jurisdiction over it, are
the allegations of the complaint and the character of the relief sought. 18 An inquiry into the averments of the
amended complaint in the Court of origin is thus in order. 19
The amended Complaint alleges: 20
6. That the plaintiff Carmen Cañiza, is the sole and absolute owner of a house and lot at
No. 61 Scout Tobias, Quezon City, which property is now the subject of this complaint;
xxx xxx xxx
9. That the defendants, their children, grandchildren and sons-in-law, were allowed to
live temporarily in the house of plaintiff Carmen Cañiza, for free, out of her kindness;
10. That the plaintiff, through her legal guardian, has duly notified the defendants, for
them to vacate the said house, but the two (2) letters of demand were ignored and the
defendants refused to vacate the same. . .
11. That the plaintiff, represented by her legal guardian, Amparo Evangelista, made
another demand on the defendants for them to vacate the premises, before Barangay
Captain Angelina A. Diaz of Barangay Laging Handa, Quezon City, but after two (2)
conferences, the result was negative and no settlement was reached. A photocopy of the
Certification to File Action dated July 4, 1990, issued by said Barangay Captain is
attached, marked Annex "D" and made an integral part hereof;
12. That the plaintiff has given the defendants more than thirty (30) days to vacate the
house, but they still refused to vacate the premises, and they are up to this time residing
in the said place;
 13. That this complaint is filed within one (1) year from the date of first letter of demand
dated February 3, 1990 (Annex "B") sent by the plaintiff to the defendants, by her legal
guardian — Amparo Evangelista;
14. By the defendants' act of unlawfully depriving the plaintiff of the possession of the
house in question, they are enriching themselves at the expense of the
incompetent plaintiff because, while they are saving money by not paying any rent for the
house, the plaintiff is losing much money as her house could not be rented by others;
15. That the plaintiff's health is failing and she needs the house urgently, so that funds
could be raised to meet her expenses for her support, maintenance and medical treatment;
16. That because of defendants' refusal to vacate the house at No. 61 Scout Tobias,
Quezon City, the plaintiff, through her legal guardian, was compelled to go to court for
justice, and she has to spend P10,000.00 as attorney's fees.
Its prayer 21 is quoted below:
WHEREFORE, in the interest of justice and the rule of law, plaintiff, Carmen Cañiza,
represented by her legal guardian, Amparo Evangelista, respectfully prays to this
Honorable Court, to render judgment in favor of plaintiff and against the defendants as
follows:
1. To order the defendants, their children, grandchildren, sons-in-law and other persons
claiming under them, to vacate the house and premises at No. 6 1 Scout Tobias, Quezon
City, so that its possession can be restored to the plaintiff Carmen Cañiza; and
2. To pay attorney's fees in the amount of P10,000.00;
3. To pay the costs of the suit.
In essence, the amended complaint states:
1) that the Estradas were occupying Cañiza's house by tolerance — having been "allowed
to live temporarily . . (therein) for free, out of . . (Cañiza's) kindness;"
2) that Cañiza needed the house "urgently" because her "health . . (was) failing and she . .
(needed) funds . . to meet her expenses for her support, maintenance and medical
treatment;"
3) that through her general guardian, Cañiza requested the Estradas several times, orally
and in writing, to give back possession of the house;
4) that the Estradas refused and continue to refuse to give back the house to Cañiza, to
her continuing prejudice; and
5) that the action was filed within one (1) year from the last demand to vacate.
Undoubtedly, a cause of action for desahucio has been adequately set out. It is settled that in an action for
unlawful detainer, it suffices to allege that the defendant is unlawfully withholding possession from the
plaintiff is deemed sufficient, 22 and a complaint for unlawful detainer is sufficient if it alleges that the
withholding of possession or the refusal to vacate is unlawful without necessarily employing the
terminology of the law. 23
The Estradas' first proffered defense derives from a literal construction of Section 1, Rule 70 of the Rules of
Court which inter alia authorizes the institution of an unlawful detainer suit when "the possession of any
land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by
virtue of any contract, express or implied." They contend that since they did not acquire possession of the
property in question "by virtue of any contract, express or implied" — they having been, to repeat, "allowed
to live temporarily . . (therein) for free, out of . . (Cañiza's) kindness" — in no sense could there be an
"expiration or termination of . . (their) right to hold possession, by virtue of any contract, express or
implied." Nor would an action for forcible entry lie against them, since there is no claim that they had
"deprived (Cañiza) of the possession of . . (her property) by force, intimidation, threat, strategy, or stealth.
The argument is arrant sophistry. Cañiza's act of allowing the Estradas to occupy her house, rent-free, did
not create a permanent and indefeasible right of possession in the latter's favor. Common sense, and the
590
most rudimentary sense of fairness clearly require that that act of liberality be implicitly, but no less
certainly, accompanied by the necessary burden on the Estradas of returning the house to Cañiza upon her
demand. More than once has this Court adjudged that a person who occupies the land of another at the
latter's tolerance or permission without any contract between them is necessarily bound by an implied
promise that he will vacate upon demand, failing which a summary action for ejectment is the proper
remedy against him. 24 The situation is not much different from that of a tenant whose lease expires but who
continues in occupancy by tolerance of the owner, in which case there is deemed to be an unlawful
deprivation or withholding of possession as of the date of the demand to vacate. 25 In other words, one
whose stay is merely tolerated becomes a deforciant illegally occupying the land or property the moment he
is required to leave. 26 Thus, in Asset Privatization Trust vs. Court of Appeals, 27 where a company, having
lawfully obtained possession of a plant upon its undertaking to buy the same, refused to return it after failing
to fulfill its promise of payment despite demands, this Court held that "(a)fter demand and its repudiation, . .
(its) continuing possession . . became illegal and the complaint for unlawful detainer filed by the
. . (plant's owner) was its proper remedy.
It may not be amiss to point out in this connection that where there had been more than one demand to
vacate, the one-year period for filing the complaint for unlawful detainer must be reckoned from the date of
the last demand, 28the reason being that the lessor has the option to waive his right of action based on
previous demands and let the lessee remain meanwhile in the premises. 29 Now, the complaint filed by
Cañiza's guardian alleges that the same was "filed within one (1) year from the date of the first letter of
demand dated February 3, 1990." Although this averment is not in accord with law because there is in fact
a second letter of demand to vacate, dated February 27, 1990, the mistake is inconsequential, since the
complaint was actually filed on September 17, 1990, well within one year from the second (last) written
demand to vacate.
The Estradas' possession of the house stemmed from the owner's express permission. That permission was
subsequently withdrawn by the owner, as was her right; and it is immaterial that the withdrawal was made
through her judicial guardian, the latter being indisputably clothed with authority to do so. Nor is it of any
consequence that Carmen Cañiza had executed a will bequeathing the disputed property to the Estradas; that
circumstance did not give them the right to stay in the premises after demand to vacate on the theory that
they might in future become owners thereof, that right of ownership being at best inchoate, no transfer of
ownership being possible unless and until the will is duly probated.
Thus, at the time of the institution of the action of desahucio, the Estradas had no legal right to the property,
whether as possessors by tolerance or sufferance, or as owners. They could not claim the right of possession
by sufferance; that had been legally ended. They could not assert any right of possession flowing from their
ownership of the house; their status as owners is dependent on the probate of the holographic will by which
the property had allegedly been bequeathed to them — an event which still has to take place; in other words,
prior to the probate of the will, any assertion of possession by them would be premature and inefficacious.
In any case, the only issue that could legitimately be raised under the circumstances was that involving the
Estradas' possession by tolerance, i.e., possession de facto, not de jure. It is therefore incorrect to postulate
that the proper remedy for Cañiza is not ejectment but accion publiciana, a plenary action in the RTC or an
action that is one for recovery of the right to possession de jure.
II
The Estradas insist that the devise of the house to them by Cañiza clearly denotes her intention that they
remain in possession thereof, and legally incapacitated her judicial guardian, Amparo Evangelista, from
evicting them therefrom, since their ouster would be inconsistent with the ward's will.
A will is essentially ambulatory; at any time prior to the testator's death, it may be changed or
revoked; 30 and until admitted to probate, it has no effect whatever and no right can be claimed thereunder,
the law being quite explicit: "No will shall pass either real or personal property unless it is proved and
allowed in accordance with the Rules of Court" (ART. 838, id.). 31 An owner's intention to confer title in the
future to persons possessing property by his tolerance, is not inconsistent with the former's taking back
possession in the meantime for any reason deemed sufficient. And that in this case there was sufficient cause The court charges involved in procuring such appointment, if defrayed by the opposing
for the owner's resumption of possession is apparent: she needed to generate income from the house on party, may be recovered as costs. The heirs of the deceased may be allowed to be
account of the physical infirmities afflicting her, arising from her extreme age. substituted for the deceased, without requiring the appointment of an executor or
Amparo Evangelista was appointed by a competent court the general guardian of both the person and the administrator and the court may appoint guardian ad litemfor the minor heirs.
estate of her aunt, Carmen Cañiza. Her Letters of Guardianship 32 dated December 19, 1989 clearly installed To be sure, an ejectment case survives the death of a party. Cañiza's demise did not extinguish
her as the "guardian over the person and properties of the incompetent CARMEN CANIZA with full the desahucio suit instituted by her through her guardian. 42 That action, not being a purely personal one,
authority to take possession of the property of said incompetent in any province or provinces in which it survived her death; her heirs have taken her place and now represent her interests in the appeal at bar.
may be situated and to perform all other acts necessary for the management of her properties . . " 33 By that WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals promulgated on June 2,
appointment, it became Evangelista's duty to care for her aunt's person, to attend to her physical and spiritual 1993 — affirming the Regional Trial Court's judgment and dismissing petitioner's petition for certiorari —
needs, to assure her well-being, with right to custody of her person in preference to relatives and friends. 34 It is REVERSED and SET ASIDE, and the Decision dated April 13, 1992 of the Metropolitan Trial Court of
also became her right and duty to get possession of, and exercise control over, Cañiza's property, both real Quezon City, Branch 35, in Civil Case No. 3410 is REINSTATED and AFFIRMED. Costs against private
and personal, it being recognized principle that the ward has no right to possession or control of his property respondents.
during her incompetency. 35 That right to manage the ward's estate carries with it the right to take possession SO ORDERED.
thereof and recover it from anyone who retains it, 36 and bring and defend such actions as may be needful for
this purpose. 37
Actually, in bringing the action of desahucio, Evangelista was merely discharging the duty to attend to "the
comfortable and suitable maintenance of the ward" explicitly imposed on her by Section 4, Rule 96 of the
Rules of Court, viz.:
Sec. 4. Estate to be managed frugally, and proceeds applied to maintenance of ward. —
A guardian must manage the estate of his ward frugally and without waste, and apply the
income and profits thereof, so far as maybe necessary, to the comfortable and suitable
maintenance of the ward and his family, if there be any; and if such income and profits be
insufficient for that purpose, the guardian may sell or encumber the real estate, upon
being authorized by order to do so, and apply to such of the proceeds as may be necessary
to such maintenance.
Finally, it may be pointed out in relation to the Estradas's defenses in the ejectment action, that as the law
now stands, even when, in forcible entry and unlawful detainer cases, the defendant raises the question of
ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of
ownership, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts
nevertheless have the undoubted competence to resolve "the issue of ownership . . only to determine the
issue of possession." 38
III
As already stated, Carmen Cañiza passed away during the pendency of this appeal. The Estradas thereupon
moved to dismiss the petition, arguing that Cañiza's death automatically terminated the guardianship,
Amaparo Evangelista lost all authority as her judicial guardian, and ceased to have legal personality to
represent her in the present appeal. The motion is without merit.
While it is indeed well-established rule that the relationship of guardian and ward is necessarily terminated
by the death of either the guardian or the ward, 39 the rule affords no advantage to the Estradas. Amparo
Evangelista, as niece of Carmen Cañiza, is one of the latter's only two (2) surviving heirs, the other being
Cañiza's nephew, Ramon C. Nevado. On their motion and by Resolution of this Court 40 of June 20, 1994,
they were in fact substituted as parties in the appeal at bar in place of the deceased, in accordance with
Section 17, Rule 3 of the Rules of Court, viz.: 41
Sec. 18. Death of a party. — After a party dies and the claim is not thereby extinguished,
the court shall order, upon proper notice, the legal representative of the deceased to
appear and be substituted for the deceased within a period of thirty (30) days, or within
such time as may be granted. If the legal representative fails to appear within said time,
the court may order the opposing party to procure the appointment of a legal
representative of the deceased within a time to be specified by the court, and the
representative shall immediately appear for and on behalf of the interest of the deceased.

591
 SECOND DIVISION
G.R. No. 194366 October 10, 2012
NAPOLEON D. NERI, ALICIA D. NERI-MONDEJAR, VISMINDA D. NERI-CHAMBERS, ROSA D.
NERI-MILLAN, DOUGLAS D. NERI, EUTROPIA D. ILLUT-COCKINOS AND VICTORIA D. ILLUT-
PIALA, Petitioners,
vs.
HEIRS OF HADJI YUSOP UY AND JULPHA* IBRAHIM UY, Respondents.
DECISION
PERLAS-BERNABE, J.:
In this Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, petitioners Napoleon D. Neri
(Napoleon), Alicia D. Neri-Mondejar (Alicia), Visminda D. Neri-Chambers (Visminda), Rosa D. Neri-
Millan (Rosa), Douglas D. Neri (Douglas), Eutropia D. Illut-Cockinos (Eutropia), and Victoria D. Illut-Piala
(Victoria) seek to reverse and set aside the April 27, 2010 Decision 2 and October 18, 2010 Resolution3 of the
Court of Appeals (CA) in CA-G.R. CV No. 01031-MIN which annulled the October 25, 2004 Decision4 of
the Regional Trial Court (RTC) of Panabo City, Davao del Norte and instead, entered a new one dismissing
petitioners’ complaint for annulment of sale, damages and attorney’s feesagainst herein respondents heirs of
spouses Hadji Yusop Uy and Julpha Ibrahim Uy (heirs of Uy).
The Facts
During her lifetime, Anunciacion Neri (Anunciacion) had seven children, two (2) from her first marriage
with Gonzalo Illut (Gonzalo), namely: Eutropia and Victoria, and five (5) from her second marriage with
Enrique Neri (Enrique), namely: Napoleon, Alicia, Visminda, Douglas and Rosa. Throughout the marriage
of spouses Enrique and Anunciacion, they acquired several homestead properties with a total area of
296,555 square meters located in Samal, Davao del Norte, embraced by Original Certificate of Title (OCT)
Nos. (P-7998) P-21285 , (P-14608) P-51536and P-20551 (P-8348)7 issued on February 15, 1957, August 27,
1962 and July 7, 1967, respectively.
On September 21, 1977, Anunciacion died intestate. Her husband, Enrique, in his personal capacity and as
natural guardian of his minor children Rosa and Douglas, together with Napoleon, Alicia, and
Vismindaexecuted an Extra-Judicial Settlement of the Estate with Absolute Deed of Sale8 on July 7, 1979,
adjudicating among themselves the said homestead properties, and thereafter, conveying themto the late
spouses Hadji Yusop Uy and Julpha Ibrahim Uy (spouses Uy)for a consideration of ₱ 80,000.00.
On June 11, 1996, the children of Enrique filed a complaint for annulment of saleof the said homestead
properties against spouses Uy (later substituted by their heirs)before the RTC, docketed as Civil Case
No.96-28, assailing the validity of the sale for having been sold within the prohibited period. Thecomplaint
was later amended to include Eutropia and Victoriaas additional plaintiffs for having been excluded and
deprived of their legitimes as childrenof Anunciacion from her first marriage.
In their amended answer with counterclaim, the heirs of Uy countered that the sale took place beyond the 5-
year prohibitory period from the issuance of the homestead patents. They also denied knowledge of Eutropia
and Victoria’s exclusionfrom the extrajudicial settlement and sale of the subject properties, and interposed
further the defenses of prescription and laches.
The RTC Ruling
On October 25, 2004, the RTC rendered a decision ordering, among others, the annulment of the Extra-
Judicial Settlement of the Estate with Absolute Deed of Sale. It ruled that while the sale occurred beyond the
5-year prohibitory period, the sale is still void because Eutropia and Victoria were deprived of their
hereditary rights and that Enrique had no judicial authority to sell the shares of his minor children, Rosa and
Douglas.
Consequently, it rejected the defenses of laches and prescription raised by spouses Uy, who claimed
possession of the subject properties for 17 years, holding that co-ownership rights are imprescriptible.
The CA Ruling
592
On appeal, the CAreversed and set aside the ruling of the RTC in its April 27, 2010 Decision and dismissed
the complaint of the petitioners. It held that, while Eutropia and Victoria had no knowledge of the
extrajudicial settlement and sale of the subject properties and as such, were not bound by it, the CA found it
unconscionable to permit the annulment of the sale considering spouses Uy’s possession thereof for 17
years, and thatEutropia and Victoriabelatedlyfiled their actionin 1997, ormore than two years
fromknowledge of their exclusion as heirs in 1994 when their stepfather died. It, however, did not preclude
the excluded heirs from recovering their legitimes from their co-heirs.
Similarly, the CA declared the extrajudicial settlement and the subsequent saleas valid and binding with
respect to Enrique and hischildren, holding that as co-owners, they have the right to dispose of their
respective shares as they consider necessary or fit.While recognizing Rosa and Douglas to be minors at that
time, they were deemed to have ratified the sale whenthey failed to question it upon reaching the age of
majority.Italso found laches to have set in because of their inaction for a long period of time.
The Issues
In this petition, petitioners imputeto the CA the following errors:
I. WHEN IT UPHELDTHE VALIDITY OF THE "EXTRA JUDICIAL SETTLEMENT OF THE ESTATE
WITH ABSOLUTE DEED OF SALE" AS FAR AS THE SHARES OF EUTROPIA AND VICTORIA
WERE CONCERNED, THEREBY DEPRIVING THEM OF THEIR INHERITANCE;
II. WHEN IT DID NOT NULLIFY OR ANNUL THE "EXTRA JUDICIAL SETTLEMENT OF THE
ESTATE WITH ABSOLUTE DEED OF SALE" WITH RESPECT TO THE SHARESOF ROSA AND
DOUGLAS, THEREBY DEPRIVING THEM OF THEIR INHERITANCE; and
III. WHEN IT FOUND THAT LACHES OR PRESCRIPTION HAS SET IN.
The Ruling of the Court
The petitionis meritorious.
It bears to stress that all the petitioners herein are indisputably legitimate children of Anunciacion from her
first and second marriages with Gonzalo and Enrique, respectively, and consequently, are entitled to inherit
from her in equal shares, pursuant to Articles 979 and 980 of the Civil Code which read:
ART. 979. Legitimate children and their descendants succeed the parents and other ascendants, without
distinction as to sex or age, and even if they should come from different marriages.
xxx
ART. 980. The children of the deceased shall always inherit from him in their own right, dividing the
inheritance in equal shares.
As such, upon the death of Anunciacion on September 21, 1977, her children and Enrique acquired their
respective inheritances,9 entitling them to their pro indiviso shares in her whole estate, as follows:
Enrique 9/16 (1/2 of the conjugal assets + 1/16)
Eutropia 1/16
Victoria 1/16
Napoleon 1/16
Alicia 1/16
Visminda 1/16
Rosa 1/16
Douglas 1/16
Hence, in the execution of the Extra-Judicial Settlement of the Estate with Absolute Deed of Sale in favor of
spouses Uy, all the heirs of Anunciacionshould have participated. Considering that Eutropia and Victoria
were admittedly excluded and that then minors Rosa and Douglas were not properly represented therein, the
settlement was not valid and binding uponthem and consequently, a total nullity.
Section 1, Rule 74 of the Rules of Court provides:
SECTION 1. Extrajudicial settlement by agreement between heirs. – x x x
The fact of the extrajudicial settlement or administration shall be published in a newspaper of general
circulation in the manner provided in the next succeeding section; but no extrajudicial settlement shall be
binding upon any person who has not participated therein or had no notice thereof. (Underscoring added)
The effect of excluding the heirs in the settlement of estate was further elucidated in Segura v.
Segura,10 thus:
It is clear that Section 1 of Rule 74 does not apply to the partition in question which was null and void as far
as the plaintiffs were concerned. The rule covers only valid partitions. The partition in the present case was
invalid because it excluded six of the nine heirs who were entitled to equal shares in the partitioned property.
Under the rule "no extrajudicial settlement shall be binding upon any person who has not participated
therein or had no notice thereof." As the partition was a total nullity and did not affect the excluded heirs, it
was not correct for the trial court to hold that their right to challenge the partition had prescribed after two
years from its execution…
However, while the settlement of the estate is null and void, the subsequent sale of the subject
propertiesmade by Enrique and his children, Napoleon, Alicia and Visminda, in favor of the respondents
isvalid but only with respect to their proportionate shares therein.It cannot be denied that these heirs have
acquired their respective shares in the properties of Anunciacion from the moment of her death 11 and that, as
owners thereof, they can very well sell their undivided share in the estate.12
With respect to Rosa and Douglas who were minors at the time of the execution of the settlement and sale,
their natural guardian and father, Enrique, represented them in the transaction. However, on the basis of the
laws prevailing at that time, Enrique was merely clothed with powers of administration and bereft of any
authority to dispose of their 2/16 shares in the estate of their mother, Anunciacion.
Articles 320 and 326 of the Civil Code, the laws in force at the time of the execution of the settlement and
sale, provide:
ART. 320. The father, or in his absence the mother, is the legal administrator of the property pertaining to
the child under parental authority. If the property is worth more than two thousand pesos, the father or
mother shall give a bond subject to the approval of the Court of First Instance.
ART. 326. When the property of the child is worth more than two thousand pesos, the father or mother shall
be considered a guardian of the child’s property, subject to the duties and obligations of guardians under the
Rules of Court.
Corollarily, Section 7, Rule 93 of the Rules of Court also provides:
SEC. 7. Parents as Guardians. – When the property of the child under parental authority is worth two
thousand pesos or less, the father or the mother, without the necessity of court appointment, shall be his
legal guardian. When the property of the child is worth more than two thousand pesos, the father or the
mother shall be considered guardian of the child’s property, with the duties and obligations of guardians
under these Rules, and shall file the petition required by Section 2 hereof. For good reasons, the court may,
however, appoint another suitable persons.
Administration includes all acts for the preservation of the property and the receipt of fruits according to the
natural purpose of the thing. Any act of disposition or alienation, or any reduction in the substance of the
patrimony of child, exceeds the limits of administration. 13 Thus, a father or mother, as the natural guardian
of the minor under parental authority, does not have the power to dispose or encumber the property of the
latter. Such power is granted by law only to a judicial guardian of the ward’s property and even then only
with courts’ prior approval secured in accordance with the proceedings set forth by the Rules of Court.14
Consequently, the disputed sale entered into by Enrique in behalf of his minor children without the proper
judicial authority, unless ratified by them upon reaching the age of majority, 15 is unenforceable in
accordance with Articles 1317 and 1403(1) of the Civil Code which provide:
593
ART. 1317. No one may contract in the name of another without being authorized by the latter or unless he
has by law a right to represent him.
A contract entered into in the name of another by one who has no authority or legal representation, or who
has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the
person on whose behalf it has been executed, before it is revoked by the other contracting party.
ART. 1403. The following contracts are unenforceable, unless they are ratified:
(1) Those entered into the name of another person by one who has been given no authority or legal
representation, or who has acted beyond his powers;
xxx
Ratification means that one under no disability voluntarily adopts and gives sanction to some unauthorized
act or defective proceeding, which without his sanction would not be binding on him. It is this voluntary
choice, knowingly made, which amounts to a ratification of what was theretofore unauthorized, and
becomes the authorized act of the party so making the ratification.16 Once ratified, expressly or impliedly
such as when the person knowingly received benefits from it, the contract is cleansed from all its defects
from the moment it was constituted,17 as it has a retroactive effect.
Records, however, show that Rosa had ratified the extrajudicial settlement of the estate with absolute deed
of sale. In Napoleon and Rosa’s Manifestation 18 before the RTC dated July 11, 1997,they stated:
"Concerning the sale of our parcel of land executed by our father, Enrique Neri concurred in and conformed
to by us and our other two sisters and brother (the other plaintiffs), in favor of Hadji Yusop Uy and his
spouse Hadja Julpa Uy on July 7, 1979, we both confirmed that the same was voluntary and freely made by
all of us and therefore the sale was absolutely valid and enforceable as far as we all plaintiffs in this case are
concerned;" (Underscoring supplied)
In their June 30, 1997 Joint-Affidavit,19 Napoleon and Rosa also alleged:
"That we are surprised that our names are included in this case since we do not have any intention to file a
case against Hadji Yusop Uy and Julpha Ibrahim Uy and their family and we respect and acknowledge the
validity of the Extra-Judicial Settlement of the Estate with Absolute Deed of Sale dated July 7, 1979;"
(Underscoring supplied)
Clearly, the foregoing statements constitutedratification of the settlement of the estate and the subsequent
sale, thus, purging all the defects existing at the time of its execution and legitimizing the conveyance of
Rosa’s 1/16 share in the estate of Anunciacion to spouses Uy. The same, however, is not true with respect to
Douglas for lack of evidence showing ratification.
Considering, thus, that the extrajudicial settlement with sale is invalid and therefore, not binding on
Eutropia, Victoria and Douglas, only the shares ofEnrique, Napoleon, Alicia, Visminda and Rosa in the
homestead properties have effectivelybeen disposed in favor of spouses Uy. "A person can only sell what he
owns, or is authorized to sell and the buyer can as a consequence acquire no more than what the sellercan
legally transfer."20 On this score, Article 493 of the Civil Codeis relevant, which provides:
Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and
he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-
owners, shall be limited to the portion which may be allotted to him in the division upon the termination of
the co-ownership.
Consequently, spouses Uy or their substituted heirs became pro indiviso co-owners of the homestead
properties with Eutropia, Victoria and Douglas, who retained title to their respective 1/16 shares. They were
deemed to be holding the 3/16 shares of Eutropia, Victoria and Douglas under an implied constructive trust
for the latter’s benefit, conformably with Article 1456 of the Civil Code which states:"if property is acquired
through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust
for the benefit of the person from whom the property comes." As such, it is only fair, just and equitable that
the amount paid for their shares equivalent to ₱ 5,000.00 21 each or a total of ₱ 15,000.00 be returned to
spouses Uy with legal interest.
On the issue of prescription, the Court agrees with petitioners that the present action has not prescribed in so
far as it seeks to annul the extrajudicial settlement of the estate. Contrary to the ruling of the CA, the
prescriptive period of 2 years provided in Section 1 Rule 74 of the Rules of
Court reckoned from the execution of the extrajudicial settlement finds no application to petitioners
Eutropia, Victoria and Douglas, who were deprived of their lawful participation in the subject estate.
Besides, an "action or defense for the declaration of the inexistence of a contract does not prescribe" in
accordance with Article 1410 of the Civil Code.
However, the action to recover property held in trust prescribes after 10 years from the time the cause of
action accrues,22 which is from the time of actual notice in case of unregistered deed. 23 In this case, Eutropia,
Victoria and Douglas claimed to have knowledge of the extrajudicial settlement with sale after the death of
their father, Enrique, in 1994 which spouses Uy failed to refute. Hence, the complaint filed in 1997 was well
within the prescriptive period of 10 years.
WHEREFORE, the instant petition is GRANTED. The April 27, 2010 Decision and October 18, 2010
Resolution of the Court of Appeals are REVERSED and SET ASIDE and a new judgment is entered:
1. Declaring the Extra-Judicial Settlement of the Estate of Anunciacion Neri NULL and VOID;
2. Declaring the Absolute Deed of Sale in favor of the late spouses Hadji Yusop Uy and Julpha
Ibrahim Uy as regards the 13/16 total shares of the late Enrique Neri, Napoleon Neri, Alicia D.
Neri-Mondejar, Visminda D. Neri-Chambers and Rosa D. Neri-Millan VALID;
3. Declaring Eutropia D. Illut-Cockinos, Victoria D. Illut-Piala and Douglas D. Neri as
the LAWFUL OWNERSof the 3/16 portions of the subject homestead properties, covered by
Original Certificate of Title Nos. (P-7998) P-2128, (P-14608) P-5153 and P-20551 (P-8348); and
4. Ordering the estate of the late Enrique Neri, as well as Napoleon Neri, Alicia D. Neri-Mondejar,
Visminda D. Neri-Chambers and Rosa D. Neri-Millan to return to the respondents jointly and
solidarily the amount paid corresponding to the 3/16 shares of Eutropia, Victoria and Douglas in
the total amount of ₱ 15,000.00, with legal interest at 6% per annum computed from the time of
payment until finality of this decision and 12% per annum thereafter until fully paid.
No pronouncement as to costs.
SO ORDERED.

594
 IRST DIVISION
G.R. No. 184528 April 25, 2012
NILO OROPESA, Petitioner,
vs.
CIRILO OROPESA, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure of the
Decision1 dated February 29, 2008, as well as the Resolution 2 dated September 16, 2008, both rendered by
the Court of Appeals in CA-G.R. CV No. 88449, entitled "NILO OROPESA vs. CIRILO OROPESA." The
Court of Appeals’ issuances affirmed the Order3 dated September 27, 2006 and the Order4 dated November
14, 2006 issued by the Regional Trial Court (RTC) of Parañaque City, Branch 260 in SP. Proc. Case No. 04-
0016, which dismissed petitioner Nilo Oropesa’s petition for guardianship over the properties of his father,
respondent Cirilo Oropesa (a widower), and denied petitioner’s motion for reconsideration thereof,
respectively.
The facts of this case, as summed in the assailed Decision, follow:
On January 23, 2004, the (petitioner) filed with the Regional Trial Court of Parañaque City, a petition for
him and a certain Ms. Louie Ginez to be appointed as guardians over the property of his father, the
(respondent) Cirilo Oropesa. The case was docketed as SP Proc. No. 04-0016 and raffled off to Branch 260.
In the said petition, it is alleged among others that the (respondent) has been afflicted with several maladies
and has been sickly for over ten (10) years already having suffered a stroke on April 1, 2003 and June 1,
2003, that his judgment and memory [were] impaired and such has been evident after his hospitalization;
that even before his stroke, the (respondent) was observed to have had lapses in memory and judgment,
showing signs of failure to manage his property properly; that due to his age and medical condition, he
cannot, without outside aid, manage his property wisely, and has become an easy prey for deceit and
exploitation by people around him, particularly Ms. Ma. Luisa Agamata, his girlfriend.
In an Order dated January 29, 2004, the presiding judge of the court a quo set the case for hearing, and
directed the court social worker to conduct a social case study and submit a report thereon.
Pursuant to the abovementioned order, the Court Social Worker conducted her social case study,
interviewing the (petitioner) and his witnesses. The Court Social Worker subsequently submitted her report
but without any finding on the (respondent) who refused to see and talk to the social worker.
On July 6, 2004, the (respondent) filed his Opposition to the petition for guardianship. On August 3, 2004,
the (respondent) filed his Supplemental Opposition.
Thereafter, the (petitioner) presented his evidence which consists of his testimony, and that of his sister
Gianina Oropesa Bennett, and the (respondent’s) former nurse, Ms. Alma Altaya.
After presenting evidence, the (petitioner) filed a manifestation dated May 29, 2006 resting his case. The
(petitioner) failed to file his written formal offer of evidence.
Thus, the (respondent) filed his "Omnibus Motion (1) to Declare the petitioner to have waived the
presentation of his Offer of Exhibits and the presentation of his Evidence Closed since they were not
formally offered; (2) To Expunge the Documents of the Petitioner from the Record; and (3) To Grant leave
to the Oppositor to File Demurrer to Evidence.
In an Order dated July 14, 2006, the court a quo granted the (respondent’s) Omnibus Motion. Thereafter, the
(respondent) then filed his Demurrer to Evidence dated July 23, 2006. 5 (Citations omitted.)
The trial court granted respondent’s demurrer to evidence in an Order dated September 27, 2006. The
dispositive portion of which reads:
WHEREFORE, considering that the petitioner has failed to provide sufficient evidence to establish that Gen.
Cirilo O. Oropesa is incompetent to run his personal affairs and to administer his properties, Oppositor’s
Demurrer to Evidence is GRANTED, and the case is DISMISSED.6
595
Petitioner moved for reconsideration but this was denied by the trial court in an Order dated November 14,
2006, the dispositive portion of which states:
WHEREFORE, considering that the Court record shows that petitioner-movant has failed to provide
sufficient documentary and testimonial evidence to establish that Gen. Cirilo Oropesa is incompetent to run
his personal affairs and to administer his properties, the Court hereby affirms its earlier Order dated 27
September 2006.
Accordingly, petitioner’s Motion for Reconsideration is DENIED for lack of merit. 7
Unperturbed, petitioner elevated the case to the Court of Appeals but his appeal was dismissed through the
now assailed Decision dated February 29, 2008, the dispositive portion of which reads:
WHEREFORE, premises considered the instant appeal is DISMISSED. The assailed orders of the court a
quo dated September 27, 2006 and November 14, 2006 are AFFIRMED.8
A motion for reconsideration was filed by petitioner but this was denied by the Court of Appeals in the
similarly assailed Resolution dated September 16, 2008. Hence, the instant petition was filed.
Petitioner submits the following question for consideration by this Court:
WHETHER RESPONDENT IS CONSIDERED AN "INCOMPETENT" PERSON AS DEFINED UNDER
SECTION 2, RULE 92 OF THE RULES OF COURT WHO SHOULD BE PLACED UNDER
GUARDIANSHIP9
After considering the evidence and pleadings on record, we find the petition to be without merit.
Petitioner comes before the Court arguing that the assailed rulings of the Court of Appeals should be set
aside as it allegedly committed grave and reversible error when it affirmed the erroneous decision of the trial
court which purportedly disregarded the overwhelming evidence presented by him showing respondent’s
incompetence.
In Francisco v. Court of Appeals,10 we laid out the nature and purpose of guardianship in the following wise:
A guardianship is a trust relation of the most sacred character, in which one person, called a "guardian" acts
for another called the "ward" whom the law regards as incapable of managing his own affairs. A
guardianship is designed to further the ward’s well-being, not that of the guardian. It is intended to preserve
the ward’s property, as well as to render any assistance that the ward may personally require. It has been
stated that while custody involves immediate care and control, guardianship indicates not only those
responsibilities, but those of one in loco parentis as well. 11
In a guardianship proceeding, a court may appoint a qualified guardian if the prospective ward is proven to
be a minor or an incompetent.
A reading of Section 2, Rule 92 of the Rules of Court tells us that persons who, though of sound mind but by
reason of age, disease, weak mind or other similar causes, are incapable of taking care of themselves and
their property without outside aid are considered as incompetents who may properly be placed under
guardianship. The full text of the said provision reads:
Sec. 2. Meaning of the word "incompetent." – Under this rule, the word "incompetent" includes persons
suffering the penalty of civil interdiction or who are hospitalized lepers, prodigals, deaf and dumb who are
unable to read and write, those who are of unsound mind, even though they have lucid intervals, and persons
not being of unsound mind, but by reason of age, disease, weak mind, and other similar causes, cannot,
without outside aid, take care of themselves and manage their property, becoming thereby an easy prey for
deceit and exploitation.
We have held in the past that a "finding that a person is incompetent should be anchored on clear, positive
and definite evidence."12 We consider that evidentiary standard unchanged and, thus, must be applied in the
case at bar.
In support of his contention that respondent is incompetent and, therefore, should be placed in guardianship,
petitioner raises in his Memorandum13 the following factual matters:
a. Respondent has been afflicted with several maladies and has been sickly for over ten (10) years
already;
 b. During the time that respondent was hospitalized at the St. Luke’s Medical Center after his
stroke, he purportedly requested one of his former colleagues who was visiting him to file a loan
application with the Armed Forces of the Philippines Savings and Loan Association, Inc.
(AFPSLAI) for payment of his hospital bills, when, as far as his children knew, he had substantial
amounts of money in various banks sufficient to cover his medical expenses;
c. Respondent’s residence allegedly has been left dilapidated due to lack of care and management;
d. The realty taxes for respondent’s various properties remain unpaid and therefore petitioner and
his sister were supposedly compelled to pay the necessary taxes;
e. Respondent allegedly instructed petitioner to sell his Nissan Exalta car for the reason that the
former would be purchasing another vehicle, but when the car had been sold, respondent did not
procure another vehicle and refused to account for the money earned from the sale of the old car;
f. Respondent withdrew at least $75,000.00 from a joint account under his name and his daughter’s
without the latter’s knowledge or consent;
g. There was purportedly one occasion where respondent took a kitchen knife to stab himself upon
the "orders" of his girlfriend during one of their fights;
h. Respondent continuously allows his girlfriend to ransack his house of groceries and furniture,
despite protests from his children.14
Respondent denied the allegations made by petitioner and cited petitioner’s lack of material evidence to
support his claims. According to respondent, petitioner did not present any relevant documentary or
testimonial evidence that would attest to the veracity of his assertion that respondent is incompetent largely
due to his alleged deteriorating medical and mental condition. In fact, respondent points out that the only
medical document presented by petitioner proves that he is indeed competent to run his personal affairs and
administer his properties. Portions of the said document, entitled "Report of Neuropsychological
Screening,"15 were quoted by respondent in his Memorandum16 to illustrate that said report in fact favored
respondent’s claim of competence, to wit:
General Oropesa spoke fluently in English and Filipino, he enjoyed and participated meaningfully in
conversations and could be quite elaborate in his responses on many of the test items. He spoke in a clear
voice and his articulation was generally comprehensible. x x x.
xxxx
General Oropesa performed in the average range on most of the domains that were tested. He was able to
correctly perform mental calculations and keep track of number sequences on a task of attention. He did
BEST in visuo-constructional tasks where he had to copy geometrical designs using tiles. Likewise, he was
able to render and read the correct time on the Clock Drawing Test. x x x.
xxxx
x x x Reasoning abilities were generally intact as he was able to suggest effective solutions to problem
situations. x x x.17
With the failure of petitioner to formally offer his documentary evidence, his proof of his father’s
incompetence consisted purely of testimonies given by himself and his sister (who were claiming interest in
their father’s real and personal properties) and their father’s former caregiver (who admitted to be acting
under their direction). These testimonies, which did not include any expert medical testimony, were
insufficient to convince the trial court of petitioner’s cause of action and instead lead it to grant the demurrer
to evidence that was filed by respondent.
Even if we were to overlook petitioner’s procedural lapse in failing to make a formal offer of evidence, his
documentary proof were comprised mainly of certificates of title over real properties registered in his, his
father’s and his sister’s names as co-owners, tax declarations, and receipts showing payment of real estate
taxes on their co-owned properties, which do not in any way relate to his father’s alleged incapacity to make
decisions for himself. The only medical document on record is the aforementioned "Report of
Neuropsychological Screening" which was attached to the petition for guardianship but was never identified
by any witness nor offered as evidence. In any event, the said report, as mentioned earlier, was ambivalent at
596
best, for although the report had negative findings regarding memory lapses on the part of respondent, it also
contained findings that supported the view that respondent on the average was indeed competent.
In an analogous guardianship case wherein the soundness of mind of the proposed ward was at issue, we had
the occasion to rule that "where the sanity of a person is at issue, expert opinion is not necessary [and that]
the observations of the trial judge coupled with evidence establishing the person’s state of mental sanity will
suffice."18
Thus, it is significant that in its Order dated November 14, 2006 which denied petitioner’s motion for
reconsideration on the trial court’s unfavorable September 27, 2006 ruling, the trial court highlighted the
fatal role that petitioner’s own documentary evidence played in disproving its case and, likewise, the trial
court made known its own observation of respondent’s physical and mental state, to wit:
The Court noted the absence of any testimony of a medical expert which states that Gen. Cirilo O. Oropesa
does not have the mental, emotional, and physical capacity to manage his own affairs. On the contrary,
Oppositor’s evidence includes a Neuropsychological Screening Report which states that Gen. Oropesa, (1)
performs on the average range in most of the domains that were tested; (2) is capable of mental calculations;
and (3) can provide solutions to problem situations. The Report concludes that Gen. Oropesa possesses
intact cognitive functioning, except for mildly impaired abilities in memory, reasoning and orientation. It is
the observation of the Court that oppositor is still sharp, alert and able. 19 (Citation omitted; emphasis
supplied.)
It is axiomatic that, as a general rule, "only questions of law may be raised in a petition for review on
certiorari because the Court is not a trier of facts."20 We only take cognizance of questions of fact in certain
exceptional circumstances;21 however, we find them to be absent in the instant case. It is also long settled
that "factual findings of the trial court, when affirmed by the Court of Appeals, will not be disturbed by this
Court. As a rule, such findings by the lower courts are entitled to great weight and respect, and are deemed
final and conclusive on this Court when supported by the evidence on record." 22 We therefore adopt the
factual findings of the lower court and the Court of Appeals and rule that the grant of respondent’s demurrer
to evidence was proper under the circumstances obtaining in the case at bar.
Section 1, Rule 33 of the Rules of Court provides:
Section 1. Demurrer to evidence. – After the plaintiff has completed the presentation of his evidence, the
defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no
right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but
on appeal the order of dismissal is reversed he shall be deemed to have waived the right to present evidence.
A demurrer to evidence is defined as "an objection by one of the parties in an action, to the effect that the
evidence which his adversary produced is insufficient in point of law, whether true or not, to make out a
case or sustain the issue."23 We have also held that a demurrer to evidence "authorizes a judgment on the
merits of the case without the defendant having to submit evidence on his part, as he would ordinarily have
to do, if plaintiff’s evidence shows that he is not entitled to the relief sought."24 1âwphi1
There was no error on the part of the trial court when it dismissed the petition for guardianship without first
requiring respondent to present his evidence precisely because the effect of granting a demurrer to evidence
other than dismissing a cause of action is, evidently, to preclude a defendant from presenting his evidence
since, upon the facts and the law, the plaintiff has shown no right to relief.
WHEREFORE, premises considered, the petition is hereby DENIED. The assailed Decision dated February
29, 2008 as well as the Resolution dated September 16, 2008 of the Court of Appeals in CA-G.R. CV No.
88449 are AFFIRMED.
SO ORDERED.
 FIRST DIVISION
G.R. No. 191993 December 5, 2012
EDUARDO T. ABAD, Petitioner,
vs.
LEONARDO BIASON and GABRIEL A. MAGNO, Respondents.
RESOLUTION
REYES, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to
annul and set aside the Decision 1 dated August 28, 2009 and Resolution 2 dated April 19, 2010 of the Court
of Appeals (CA) in CA-G.R. CV No; 90145.
The facts show that on March 19, 2007, petitioner Eduardo Abad (Abad) filed a petition for guardianship
over the person and properties of Maura B. Abad (Maura) with the Regional Trial Court (RTC), Dagupan
City, Branch 42, which was docketed as Sp. Proc. No. 2007-0050-D. In support thereof, Abad alleged that
he maintains residence at No. 14 B St. Paul Street, Horseshoe Village, Quezon City and that he is Maura’s
nephew. He averred that Maura, who is single, more than ninety (90) years old and a resident of Rizal Street,
Poblacion, Mangaldan, Pangasinan, is in dire need of a guardian who will look after her and her business
affairs. Due to her advanced age, Maura is already sickly and can no longer manage to take care of herself
and her properties unassisted thus becoming an easy prey of deceit and exploitation. 3
Finding the petition sufficient in form and substance, the RTC gave due course to the same and scheduled it
for hearing. When the petition was called for hearing on April 27, 2007, nobody entered an opposition and
Abad was allowed to present evidence ex parte. After Abad formally offered his evidence and the case was
submitted for decision, Atty. Gabriel Magno filed a Motion for Leave to Intervene, together with an
Oppositionin- Intervention. Subsequently, on June 14, 2007, Leonardo Biason (Biason) filed a Motion for
Leave to File Opposition to the Petition and attached therewith his Opposition to the Appointment of
Eduardo Abad as Guardian of the Person and Properties of Maura B. Abad. Specifically, Biason alleged that
he is also a nephew of Maura and that he was not notified of the pendency of the petition for the
appointment of the latter’s guardian. He vehemently opposed the appointment of Abad as Maura’s guardian
as he cannot possibly perform his duties as such since he resides in Quezon City while Maura maintains her
abode in Mangaldan, Pangasinan. Biason prayed that he be appointed as Maura’s guardian since he was
previously granted by the latter with a power of attorney to manage her properties. 4
On September 26, 2007, the RTC rendered a Decision, 5 denying Abad’s petition and appointing Biason as
Maura’s guardian. The RTC disposed thus:
WHEREFORE, the petition is hereby denied. Petitioner Eduardo T. Abad is found to be disqualified to act
as guardian of incompetent Maura B. Abad. Oppositor Leonardo A. Biason is established by this Court to be
in a better position to be the guardian of said incompetent Maura B. Abad.
The Court hereby fixes the guardianship bond at [P]500,000.00 and the letters of guardianship shall be
issued only upon the submission of the bond, conditioned on the following provisions of the Rule 94[,]
Section 1, of the 1997 Rules of Civil Procedure:
a. To make and return to the Court within three (3) months true and complete inventory of all the
estate, real and personal, of his ward which shall come to his possession or knowledge or to the
possession or knowledge of any other person for him;
b. To faithfully execute the duties of his trust, to manage and dispose of the estate according to
these rules for the best interests of the ward, and to provide for the proper care, custody x x x of the
ward;
c. To render a true and just account of all the estate of the ward in his hands, and of all proceeds or
interest derived therefrom, and of the management and disposition of the same, at the time
designated by these rules and such other times as the court directs, and at the expiration of his trust
to settle his accounts with the court and deliver and pay over all the estate, effects, and moneys
remaining in his hands, or due from him on such settlement, to the person lawfully entitled thereto;
597
d. To perform all orders of the court by him to be performed.
SO ORDERED.6
Unyielding, Abad filed a motion for reconsideration of the foregoing decision but the RTC denied the same
in an Order dated December 11, 2007.
Abad filed an appeal to the CA. He argued that the RTC erred in disqualifying him from being appointed as
Maura’s guardian despite the fact that he has all the qualifications stated under the Rules. That he was not a
resident of Mangaldan, Pangasinan should not be a ground for his disqualification as he had actively and
efficiently managed the affairs and properties of his aunt even if he is residing in Metro Manila. Moreover,
he was expressly chosen by Maura to be her guardian.7
Abad further averred that no hearing was conducted to determine the qualifications of Biason prior to his
appointment as guardian. He claimed that the RTC also overlooked Maura’s express objection to Biason’s
appointment.8
On August 28, 2009, the CA issued a Decision, 9 affirming the decision of the RTC, the pertinent portions of
which read:
The petitioner-appellant may have been correct in arguing that there is no legal requirement that the
guardian must be residing in the same dwelling place or municipality as that of the ward or incompetent, and
that the Vancil vs. Belmes case cited by the court a quo which held that "courts should not appoint as
guardians persons who are not within the jurisdiction of our courts" pertains to persons who are not residents
of the country.
However, we do not find that the court a quo, by deciding to appoint the oppositor-appellee as guardian, has
fallen into grievous error.
For one, the oppositor-appellee, like petitioner-appellant, is also a relative, a nephew of the incompetent.
There are no vices of character which have been established as to disqualify him from being appointed as a
guardian.
xxxx
Anent the claim of the petitioner-appellant that he has been expressly chosen by her aunt to be her guardian
as evidenced by her testimony, although it could be given weight, the same could not be heavily relied upon,
especially considering the alleged mental state of the incompetent due to her advanced age.
xxxx
WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The assailed
decision of the Regional Trial Court of Dagupan City, Branch 42 is AFFIRMED IN TOTO.
SO ORDERED.[10
Dissatisfied, Abad filed a motion for reconsideration but the CA denied the same in a Resolution 11 dated
April 19, 2010, the dispositive portion of which reads:
WHEREFORE, premises considered, the Motion for Reconsideration is DENIED for lack of merit.
SO ORDERED.12
On June 7, 2010, Abad filed a Petition for Review on Certiorari with this Court. Subsequently, Maura filed
a Motion for Leave to Intervene,13 together with a Petition-in-Intervention.14
The instant petition raises the following assignment of errors:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT DENIED THE
PETITIONER’S APPEAL AND AFFIRMED THE TRIAL COURT’S DECISION DESPITE
VERY CLEAR VIOLATIONS OF DUE PROCESS, DISREGARD OF THE RULES, AND
IRREGULARITIES IN THE APPOINTMENT OF RESPONDENT BIASON AS GUARDIAN;
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT DENIED THE
PETITIONER’S APPEAL AND ERRONEOUSLY UPHELD RESPONDENT BIASON’S
APPOINTMENT AS GUARDIAN BASED ON SOLE GROUND OF RESIDENCE, AND
 FAILED TO CONSIDER THE REQUIREMENTS AND QUALIFICATIONS PRESCRIBED BY
THE SUPREME COURT FOR THE APPOINTMENT OF GUARDIAN.15
Abad contends that that CA erred in affirming the RTC’s decision despite the fact that it did not hold any
hearing to determine whether Biason possessed all the qualifications for a guardian as provided by law.
Further, he was not given the opportunity to submit evidence to controvert Biason’s appointment.16
Abad also bewails his disqualification as guardian on the sole basis of his residence. He emphasizes that it is
not a requirement for a guardian to be a resident of the same locality as the ward, or to be living with the
latter under the same roof in order to qualify for the appointment. The more significant considerations are
that the person to be appointed must be of good moral character and must have the capability and sound
judgment in order that he may be able to take care of the ward and prudently manage his assets. 17
Unfortunately, pending the resolution of the instant petition, Biason died. On May 11, 2012, Maura filed a
Manifestation and Motion,18 informing this Court that Biason passed away on April 3, 2012 at SDS Medical
Center, Marikina City due to multiple organ failure, septic shock, community acquired pneumonia high risk,
prostate CA with metastasis, and attached a copy of his Death Certificate. 19 Maura averred that Biason’s
death rendered moot and academic the issues raised in the petition. She thus prayed that the petition be
dismissed and the guardianship be terminated.
On June 20, 2012, this Court issued a Resolution, 20 requiring Abad to comment on the manifestation filed by
Maura. Pursuant to the Resolution, Abad filed his Comment21 on August 9, 2012 and expressed his
acquiescence to Maura’s motion to dismiss the petition. He asseverated that the issues raised in the petition
pertain to the irregularity in the appointment of Biason as guardian which he believed had been rendered
moot and academic by the latter’s death. He also supported Maura’s prayer for the termination of the
guardianship by asseverating that her act of filing of a petition-in-intervention is indicative of the fact that
she is of sound mind and that she can competently manage her business affairs.
We find Maura’s motion meritorious.
An issue or a case becomes moot and academic when it ceases to present a justiciable controversy, so that a
determination of the issue would be without practical use and value. In such cases, there is no actual
substantial relief to which the petitioner would be entitled and which would be negated by the dismissal of
the petition.22
In his petition, Abad prayed for the nullification of the CA Decision dated August 28, 2009 and Resolution
dated April 19, 2010, which dismissed his appeal from the Decision dated September 26, 2007 of the RTC
and denied his motion for reconsideration, respectively. Basically, he was challenging Biason’s
qualifications and the procedure by which the RTC appointed him as guardian for Maura. However, with
Biason’s demise, it has become impractical and futile to proceed with resolving the merits of the petition. It
is a well-established rule that the relationship of guardian and ward is necessarily terminated by the death of
either the guardian or the ward.23 The supervening event of death rendered it pointless to delve into the
propriety of Biason’s appointment since the juridical tie between him and Maura has already been dissolved.
The petition, regardless of its disposition, will not afford Abad, or anyone else for that matter, any
substantial relief.1âwphi1
Moreover, Abad, in his Comment, shared Maura’s belief that the petition has lost its purpose and even
consented to Maura’s prayer for the dismissal of the petition.
WHEREFORE, in consideration of the foregoing disquisitions, the petition is hereby DISMISSED.
SO ORDERED.

598
 SECOND DIVISION
G.R. No. 166884 June 13, 2012
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
LAMBERTO C. PEREZ, NESTOR C. KUN, MA. ESTELITA P. ANGELES-PANLILIO, and
NAPOLEON O. GARCIA, Respondents.
DECISION
BRION, J.:
Before this Court is a petition for review on certiorari,1 under Rule 45 of the Rules of Court, assailing the
decision2dated January 20, 2005 of the Court of Appeals in CA-G.R. SP No. 76588. In the assailed decision,
the Court of Appeals dismissed the criminal complaint for estafa against the respondents, Lamberto C.
Perez, Nestor C. Kun, Ma. Estelita P. Angeles-Panlilio and Napoleon Garcia, who allegedly violated Article
315, paragraph 1(b) of the Revised Penal Code, in relation with Section 13 of Presidential Decree No. (P.D.)
115 – the "Trust Receipts Law."
Petitioner Land Bank of the Philippines (LBP) is a government financial institution and the official
depository of the Philippines.3 Respondents are the officers and representatives of Asian Construction and
Development Corporation (ACDC), a corporation incorporated under Philippine law and engaged in the
construction business.4
On June 7, 1999, LBP filed a complaint for estafa or violation of Article 315, paragraph 1(b) of the Revised
Penal Code, in relation to P.D. 115, against the respondents before the City Prosecutor’s Office in Makati
City. In the affidavit-complaint5 of June 7, 1999, the LBP’s Account Officer for the Account Management
Development, Edna L. Juan, stated that LBP extended a credit accommodation to ACDC through the
execution of an Omnibus Credit Line Agreement (Agreement)6 between LBP and ACDC on October 29,
1996. In various instances, ACDC used the Letters of Credit/Trust Receipts Facility of the Agreement to buy
construction materials. The respondents, as officers and representatives of ACDC, executed trust receipts7 in
connection with the construction materials, with a total principal amount of ₱52,344,096.32. The trust
receipts matured, but ACDC failed to return to LBP the proceeds of the construction projects or the
construction materials subject of the trust receipts. LBP sent ACDC a demand letter, 8 dated May 4, 1999, for
the payment of its debts, including those under the Trust Receipts Facility in the amount of ₱66,425,924.39.
When ACDC failed to comply with the demand letter, LBP filed the affidavit-complaint.
The respondents filed a joint affidavit9 wherein they stated that they signed the trust receipt documents on or
about the same time LBP and ACDC executed the loan documents; their signatures were required by LBP
for the release of the loans. The trust receipts in this case do not contain (1) a description of the goods placed
in trust, (2) their invoice values, and (3) their maturity dates, in violation of Section 5(a) of P.D. 115.
Moreover, they alleged that ACDC acted as a subcontractor for government projects such as the Metro Rail
Transit, the Clark Centennial Exposition and the Quezon Power Plant in Mauban, Quezon. Its clients for the
construction projects, which were the general contractors of these projects, have not yet paid them; thus,
ACDC had yet to receive the proceeds of the materials that were the subject of the trust receipts and were
allegedly used for these constructions. As there were no proceeds received from these clients, no
misappropriation thereof could have taken place.
On September 30, 1999, Makati Assistant City Prosecutor Amador Y. Pineda issued a
Resolution10 dismissing the complaint. He pointed out that the evidence presented by LBP failed to state the
date when the goods described in the letters of credit were actually released to the possession of the
respondents. Section 4 of P.D. 115 requires that the goods covered by trust receipts be released to the
possession of the entrustee after the latter’s execution and delivery to the entruster of a signed trust receipt.
He adds that LBP’s evidence also fails to show the date when the trust receipts were executed since all the
trust receipts are undated. Its dispositive portion reads:
WHEREFORE, premises considered, and for insufficiency of evidence, it is respectfully recommended that
the instant complaints be dismissed, as upon approval, the same are hereby dismissed. 11
599
LBP filed a motion for reconsideration which the Makati Assistant City Prosecutor denied in his order of
January 7, 2000.12
On appeal, the Secretary of Justice reversed the Resolution of the Assistant City Prosecutor. In his resolution
of August 1, 2002,13 the Secretary of Justice pointed out that there was no question that the goods covered by
the trust receipts were received by ACDC. He likewise adopted LBP’s argument that while the subjects of
the trust receipts were not mentioned in the trust receipts, they were listed in the letters of credit referred to
in the trust receipts. He also noted that the trust receipts contained maturity dates and clearly set out their
stipulations. He further rejected the respondents’ defense that ACDC failed to remit the payments to LBP
due to the failure of the clients of ACDC to pay them. The dispositive portion of the resolution reads:
WHEREFORE, the assailed resolution is REVERSED and SET ASIDE. The City Prosecutor of Makati City
is hereby directed to file an information for estafa under Art. 315 (1) (b) of the Revised Penal Code in
relation to Section 13, Presidential Decree No. 115 against respondents Lamberto C. Perez, Nestor C. Kun,
[Ma. Estelita P. Angeles-Panlilio] and Napoleon O. Garcia and to report the action taken within ten (10)
days from receipt hereof.14
The respondents filed a motion for reconsideration of the resolution dated August 1, 2002, which the
Secretary of Justice denied.15 He rejected the respondents’ submission that Colinares v. Court of
Appeals16 does not apply to the case. He explained that in Colinares, the building materials were delivered to
the accused before they applied to the bank for a loan to pay for the merchandise; thus, the ownership of the
merchandise had already been transferred to the entrustees before the trust receipts agreements were entered
into. In the present case, the parties have already entered into the Agreement before the construction
materials were delivered to ACDC.
Subsequently, the respondents filed a petition for review before the Court of Appeals.
After both parties submitted their respective Memoranda, the Court of Appeals promulgated the assailed
decision of January 20, 2005.17 Applying the doctrine in Colinares, it ruled that this case did not involve a
trust receipt transaction, but a mere loan. It emphasized that construction materials, the subject of the trust
receipt transaction, were delivered to ACDC even before the trust receipts were executed. It noted that LBP
did not offer proof that the goods were received by ACDC, and that the trust receipts did not contain a
description of the goods, their invoice value, the amount of the draft to be paid, and their maturity dates. It
also adopted ACDC’s argument that since no payment for the construction projects had been received by
ACDC, its officers could not have been guilty of misappropriating any payment. The dispositive portion
reads:
WHEREFORE, in view of the foregoing, the Petition is GIVEN DUE COURSE. The assailed Resolutions
of the respondent Secretary of Justice dated August 1, 2002 and February 17, 2003, respectively in I.S. No.
99-F-9218-28 are hereby REVERSED and SET ASIDE.18
LBP now files this petition for review on certiorari, dated March 15, 2005, raising the following error:
THE COURT OF APPEALS GRAVELY ERRED WHEN IT REVERSED AND SET ASIDE THE
RESOLUTIONS OF THE HONORABLE SECRETARY OF JUSTICE BY APPLYING THE RULING IN
THE CASE OF COLINARES V. COURT OF APPEALS, 339 SCRA 609, WHICH IS NOT APPLICABLE
IN THE CASE AT BAR.19
On April 8, 2010, while the case was pending before this Court, the respondents filed a motion to
dismiss.20 They informed the Court that LBP had already assigned to Philippine Opportunities for Growth
and Income, Inc. all of its rights, title and interests in the loans subject of this case in a Deed of Absolute
Sale dated June 23, 2005 (attached as Annex "C" of the motion). The respondents also stated that Avent
Holdings Corporation, in behalf of ACDC, had already settled ACDC’s obligation to LBP on October 8,
2009. Included as Annex "A" in this motion was a certification21 issued by the Philippine Opportunities for
Growth and Income, Inc., stating that it was LBP’s successor-in-interest insofar as the trust receipts in this
case are concerned and that Avent Holdings Corporation had already settled the claims of LBP or
obligations of ACDC arising from these trust receipts.
We deny this petition.
The disputed transactions are not trust receipts.
Section 4 of P.D. 115 defines a trust receipt transaction in this manner:
Section 4. What constitutes a trust receipt transaction. A trust receipt transaction, within the meaning of this
Decree, is any transaction by and between a person referred to in this Decree as the entruster, and another
person referred to in this Decree as entrustee, whereby the entruster, who owns or holds absolute title or
security interests over certain specified goods, documents or instruments, releases the same to the possession
of the entrustee upon the latter's execution and delivery to the entruster of a signed document called a "trust
receipt" wherein the entrustee binds himself to hold the designated goods, documents or instruments in trust
for the entruster and to sell or otherwise dispose of the goods, documents or instruments with the obligation
to turn over to the entruster the proceeds thereof to the extent of the amount owing to the entruster or as
appears in the trust receipt or the goods, documents or instruments themselves if they are unsold or not
otherwise disposed of, in accordance with the terms and conditions specified in the trust receipt, or for other
purposes substantially equivalent to any of the following:
1. In the case of goods or documents, (a) to sell the goods or procure their sale; or (b) to manufacture or
process the goods with the purpose of ultimate sale: Provided, That, in the case of goods delivered under
trust receipt for the purpose of manufacturing or processing before its ultimate sale, the entruster shall retain
its title over the goods whether in its original or processed form until the entrustee has complied fully with
his obligation under the trust receipt; or (c) to load, unload, ship or tranship or otherwise deal with them in a
manner preliminary or necessary to their sale[.]
There are two obligations in a trust receipt transaction. The first is covered by the provision that refers to
money under the obligation to deliver it (entregarla) to the owner of the merchandise sold. The second is
covered by the provision referring to merchandise received under the obligation to return it (devolvera) to
the owner. Thus, under the Trust Receipts Law,22 intent to defraud is presumed when (1) the entrustee fails
to turn over the proceeds of the sale of goods covered by the trust receipt to the entruster; or (2) when the
entrustee fails to return the goods under trust, if they are not disposed of in accordance with the terms of the
trust receipts.23
In all trust receipt transactions, both obligations on the part of the trustee exist in the alternative – the return
of the proceeds of the sale or the return or recovery of the goods, whether raw or processed. 24 When both
parties enter into an agreement knowing that the return of the goods subject of the trust receipt is not
possible even without any fault on the part of the trustee, it is not a trust receipt transaction penalized under
Section 13 of P.D. 115; the only obligation actually agreed upon by the parties would be the return of the
proceeds of the sale transaction. This transaction becomes a mere loan, 25 where the borrower is obligated to
pay the bank the amount spent for the purchase of the goods.
Article 1371 of the Civil Code provides that "[i]n order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered." Under this provision, we can
examine the contemporaneous actions of the parties rather than rely purely on the trust receipts that they
signed in order to understand the transaction through their intent.
We note in this regard that at the onset of these transactions, LBP knew that ACDC was in the construction
business and that the materials that it sought to buy under the letters of credit were to be used for the
following projects: the Metro Rail Transit Project and the Clark Centennial Exposition Project. 26 LBP had in
fact authorized the delivery of the materials on the construction sites for these projects, as seen in the letters
of credit it attached to its complaint.27 Clearly, they were aware of the fact that there was no way they could
recover the buildings or constructions for which the materials subject of the alleged trust receipts had been
used. Notably, despite the allegations in the affidavit-complaint wherein LBP sought the return of the
construction materials,28 its demand letter dated May 4, 1999 sought the payment of the balance but failed to
ask, as an alternative, for the return of the construction materials or the buildings where these materials had
been used.29
The fact that LBP had knowingly authorized the delivery of construction materials to a construction site of
two government projects, as well as unspecified construction sites, repudiates the idea that LBP intended to
600
be the owner of those construction materials. As a government financial institution, LBP should have been
aware that the materials were to be used for the construction of an immovable property, as well as a property
of the public domain. As an immovable property, the ownership of whatever was constructed with those
materials would presumably belong to the owner of the land, under Article 445 of the Civil Code which
provides:
Article 445. Whatever is built, planted or sown on the land of another and the improvements or repairs made
thereon, belong to the owner of the land, subject to the provisions of the following articles.
Even if we consider the vague possibility that the materials, consisting of cement, bolts and reinforcing steel
bars, would be used for the construction of a movable property, the ownership of these properties would still
pertain to the government and not remain with the bank as they would be classified as property of the public
domain, which is defined by the Civil Code as:
Article 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and are intended for some public
service or for the development of the national wealth.
In contrast with the present situation, it is fundamental in a trust receipt transaction that the person who
advanced payment for the merchandise becomes the absolute owner of said merchandise and continues as
owner until he or she is paid in full, or if the goods had already been sold, the proceeds should be turned
over to him or to her.30
Thus, in concluding that the transaction was a loan and not a trust receipt, we noted in Colinares that the
industry or line of work that the borrowers were engaged in was construction. We pointed out that the
borrowers were not importers acquiring goods for resale.31 Indeed, goods sold in retail are often within the
custody or control of the trustee until they are purchased. In the case of materials used in the manufacture of
finished products, these finished products – if not the raw materials or their components – similarly remain
in the possession of the trustee until they are sold. But the goods and the materials that are used for a
construction project are often placed under the control and custody of the clients employing the contractor,
who can only be compelled to return the materials if they fail to pay the contractor and often only after the
requisite legal proceedings. The contractor’s difficulty and uncertainty in claiming these materials (or the
buildings and structures which they become part of), as soon as the bank demands them, disqualify them
from being covered by trust receipt agreements.
Based on these premises, we cannot consider the agreements between the parties in this case to be trust
receipt transactions because (1) from the start, the parties were aware that ACDC could not possibly be
obligated to reconvey to LBP the materials or the end product for which they were used; and (2) from the
moment the materials were used for the government projects, they became public, not LBP’s, property.
Since these transactions are not trust receipts, an action for estafa should not be brought against the
respondents, who are liable only for a loan. In passing, it is useful to note that this is the threat held against
borrowers that Retired Justice Claudio Teehankee emphatically opposed in his dissent in People v.
Cuevo,32 restated in Ong v. CA, et al.:33
The very definition of trust receipt x x x sustains the lower court’s rationale in dismissing the information
that the contract covered by a trust receipt is merely a secured loan. The goods imported by the small
importer and retail dealer through the bank’s financing remain of their own property and risk and the old
capitalist orientation of putting them in jail for estafa for non-payment of the secured loan (granted after they
had been fully investigated by the bank as good credit risks) through the fiction of the trust receipt device
should no longer be permitted in this day and age.
As the law stands today, violations of Trust Receipts Law are criminally punishable, but no criminal
complaint for violation of Article 315, paragraph 1(b) of the Revised Penal Code, in relation with P.D. 115,
should prosper against a borrower who was not part of a genuine trust receipt transaction.
Misappropriation or abuse of confidence is absent in this case.
Even if we assume that the transactions were trust receipts, the complaint against the respondents still should
have been dismissed. The Trust Receipts Law punishes the dishonesty and abuse of confidence in the
handling of money or goods to the prejudice of another, regardless of whether the latter is the owner or not.
The law does not singularly seek to enforce payment of the loan, as "there can be no violation of [the] right
against imprisonment for non-payment of a debt."34
In order that the respondents "may be validly prosecuted for estafa under Article 315, paragraph 1(b) of the
Revised Penal Code,35 in relation with Section 13 of the Trust Receipts Law, the following elements must be
established: (a) they received the subject goods in trust or under the obligation to sell the same and to remit
the proceeds thereof to [the trustor], or to return the goods if not sold; (b) they misappropriated or converted
the goods and/or the proceeds of the sale; (c) they performed such acts with abuse of confidence to the
damage and prejudice of Metrobank; and (d) demand was made on them by [the trustor] for the remittance
of the proceeds or the return of the unsold goods."36
In this case, no dishonesty or abuse of confidence existed in the handling of the construction materials.
In this case, the misappropriation could be committed should the entrustee fail to turn over the proceeds of
the sale of the goods covered by the trust receipt transaction or fail to return the goods themselves. The
respondents could not have failed to return the proceeds since their allegations that the clients of ACDC had
not paid for the projects it had undertaken with them at the time the case was filed had never been
questioned or denied by LBP. What can only be attributed to the respondents would be the failure to return
the goods subject of the trust receipts.
We do not likewise see any allegation in the complaint that ACDC had used the construction materials in a
manner that LBP had not authorized. As earlier pointed out, LBP had authorized the delivery of these
materials to these project sites for which they were used. When it had done so, LBP should have been aware
that it could not possibly recover the processed materials as they would become part of government projects,
two of which (the Metro Rail Transit Project and the Quezon Power Plant Project) had even become part of
the operations of public utilities vital to public service. It clearly had no intention of getting these materials
back; if it had, as a primary government lending institution, it would be guilty of extreme negligence and
incompetence in not foreseeing the legal complications and public inconvenience that would arise should it
decide to claim the materials. ACDC’s failure to return these materials or their end product at the time these
"trust receipts" expired could not be attributed to its volition. No bad faith, malice, negligence or breach of
contract has been attributed to ACDC, its officers or representatives. Therefore, absent any abuse of
confidence or misappropriation on the part of the respondents, the criminal proceedings against them for
estafa should not prosper.
In Metropolitan Bank,37 we affirmed the city prosecutor’s dismissal of a complaint for violation of the Trust
Receipts Law. In dismissing the complaint, we took note of the Court of Appeals’ finding that the bank was
interested only in collecting its money and not in the return of the goods. Apart from the bare allegation that
demand was made for the return of the goods (raw materials that were manufactured into textiles), the bank
had not accompanied its complaint with a demand letter. In addition, there was no evidence offered that the
respondents therein had misappropriated or misused the goods in question.
The petition should be dismissed because the OSG did not file it and the civil liabilities have already been
settled.
The proceedings before us, regarding the criminal aspect of this case, should be dismissed as it does not
appear from the records that the complaint was filed with the participation or consent of the Office of the
Solicitor General (OSG). Section 35, Chapter 12, Title III, Book IV of the Administrative Code of 1987
provides that:
Section 35. Powers and Functions. — The Office of the Solicitor General shall represent the Government of
the Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceedings,
investigation or matter requiring the services of lawyers. x x x It shall have the following specific powers
and functions:
601
(1) Represent the Government in the Supreme Court and the Court of Appeals in all criminal proceedings;
represent the Government and its officers in the Supreme Court, the Court of Appeals and all other courts or
tribunals in all civil actions and special proceedings in which the Government or any officer thereof in his
official capacity is a party. (Emphasis provided.)
In Heirs of Federico C. Delgado v. Gonzalez,38 we ruled that the preliminary investigation is part of a
criminal proceeding. As all criminal proceedings before the Supreme Court and the Court of Appeals may
be brought and defended by only the Solicitor General in behalf of the Republic of the Philippines, a
criminal action brought to us by a private party alone suffers from a fatal defect. The present petition was
brought in behalf of LBP by the Government Corporate Counsel to protect its private interests. Since the
representative of the "People of the Philippines" had not taken any part of the case, it should be
dismissed.1âwphi1
On the other hand, if we look at the mandate given to the Office of the Government Corporate Counsel, we
find that it is limited to the civil liabilities arising from the crime, and is subject to the control and
supervision of the public prosecutor. Section 2, Rule 8 of the Rules Governing the Exercise by the Office of
the Government Corporate Counsel of its Authority, Duties and Powers as Principal Law Office of All
Government Owned or Controlled Corporations, filed before the Office of the National Administration
Register on September 5, 2011, reads:
Section 2. Extent of legal assistance – The OGCC shall represent the complaining GOCC in all stages of the
criminal proceedings. The legal assistance extended is not limited to the preparation of appropriate sworn
statements but shall include all aspects of an effective private prosecution including recovery of civil
liability arising from the crime, subject to the control and supervision of the public prosecutor.
Based on jurisprudence, there are two exceptions when a private party complainant or offended party in a
criminal case may file a petition with this Court, without the intervention of the OSG: (1) when there is
denial of due process of law to the prosecution, and the State or its agents refuse to act on the case to the
prejudice of the State and the private offended party;39 and (2) when the private offended party questions the
civil aspect of a decision of the lower court.40
In this petition, LBP fails to allege any inaction or refusal to act on the part of the OSG, tantamount to a
denial of due process. No explanation appears as to why the OSG was not a party to the case. Neither can
LBP now question the civil aspect of this decision as it had already assigned ACDC’s debts to a third
person, Philippine Opportunities for Growth and Income, Inc., and the civil liabilities appear to have already
been settled by Avent Holdings Corporation, in behalf of ACDC. These facts have not been disputed by
LBP. Therefore, we can reasonably conclude that LBP no longer has any claims against ACDC, as regards
the subject matter of this case, that would entitle it to file a civil or criminal action.
WHEREFORE, we DENY the petition and AFFIRM the January 20, 2005 decision of the Court of Appeals
in CA-G.R. SP No. 76588. No costs.
SO ORDERED.
 SECOND DIVISION
G.R. No. 188801, October 15, 2014
ROSARIO MATA CASTRO AND JOANNE BENEDICTA CHARISSIMA M. CASTRO, A.K.A.
"MARIA SOCORRO M. CASTRO" AND "JAYROSE M. CASTRO," Petitioners, v. JOSE MARIA
JED LEMUEL GREGORIO AND ANA MARIA REGINA GREGORIO, Respondents.
DECISION
LEONEN, J.:
The policy of the law is clear. In order to maintain harmony, there must be a showing of notice and consent.
This cannot be defeated by mere procedural devices. In all instances where it appears that a spouse attempts
to adopt a child out of wedlock, the other spouse and other legitimate children must be personally notified
through personal service of summons. It is not enough that they be deemed notified through constructive
service.
This is a petition for review on certiorari1 assailing the decision2 of the Court of Appeals in CA-G.R. SP No.
101021, which denied the petition for annulment of judgment filed by petitioners. The petition before the
appellate court sought to annul the judgment of the trial court that granted respondents' decree of
adoption.3chanrobleslaw
The case originally stemmed from the adoption of Jose Maria Jed Lemuel Gregorio (Jéd) and Ana Maria
Regina Gregorio (Regina) by Atty. Jose G. Castro (Jose). Jose is the estranged husband of Rosario Mata
Castro (Rosario) and the father of Joanne Benedicta Charissima M. Castro (Joanne), also known by her
baptismal name, "Maria Socorro M. Castro" and her nickname, "Jayrose."
Rosario alleged that she and Jose were married on August 5, 1962 in Laoag City. Their marriage had
allegedly been troubled. They had a child, Rose Marie, who was born in 1963, but succumbed to congenital
heart disease and only lived for nine days. Rosario allegedly left Jose after a couple of months because of
the incompatibilities between them.4chanrobleslaw
Rosario and Jose, however, briefly reconciled in 1969. Rosario gave birth to Joanne a year later. She and
Jose allegedly lived as husband and wife for about a year even if she lived in Manila and Jose stayed in
Laoag City. Jose would visit her in Manila during weekends. Afterwards, they separated permanently
because Rosario alleged that Jose had homosexual tendencies. 5 She insisted, however, that they "remained
friends for fifteen (15) years despite their separation(.)"6chanrobleslaw
7
On August 1, 2000, Jose filed a petition for adoption before the Regional Trial Court of Batac, Ilocos
Norte. In the petition, he alleged that Jed and Regina were his illegitimate children with Lilibeth Fernandez
Gregorio (Lilibeth),8 whom Rosario alleged was his erstwhile housekeeper. 9 At the time of the filing of the
petition, Jose was 70 years old.10chanrobleslaw
According to the Home Study Report11 conducted by the Social Welfare Officer of the trial court, Jose
belongs to a prominent and respected family, being one of the three children of former Governor Mauricio
Castro.
He was also a well-known lawyer in Manila and Ilocos Norte.12 The report mentioned that he was once
602
married to Rosario, but the marriage did not produce any children.13 It also stated that he met and fell in love
with Lilibeth in 1985, and Lilibeth was able to bear him two children, Jed on August 1987, and Regina on
March 1989.14 Under "Motivation for Adoption," the social welfare officer
noted:chanRoblesvirtualLawlibrary
Since, he has no child with his marriaged [sic] to Rosario Mata, he was not able to fulfill his dreams to
parent a child. However, with the presence of his 2 illegitimate children will fulfill his dreams [sic] and it is
his intention to legalize their relationship and surname. . . .15
At the time of the report, Jose was said to be living with Jed and Regina temporarily in Batac, Ilocos
Norte.16 The children have allegedly been in his custody since Lilibeth's death in July 1995. 17chanrobleslaw
On October 16, 2000, the trial court approved the adoption, 18 having ruled that "[n]o opposition had been
received by this Court from any person including the government which was represented by the Office of
the Solicitor General."19 A certificate of finality20 was issued on February 9, 2006.
Meanwhile, on July 3, 2006, Rosario, through her lawyer, Atty. Rene V. Saguisag, filed a complaint for
disbarment against Jose with the Integrated Bar of the Philippines. 21 In her complaint, she alleged that Jose
had been remiss in providing support for their daughter, Joanne, for the past 36 years. 22 She alleged that she
single-handedly raised and provided financial support to Joanne while Jose had been showering gifts to his
driver and alleged lover, Larry R. Rentegrado (Larry), and even went to the extent of adopting Larry's two
children, Jed and Regina, without her and Joanne's knowledge and consent. 23She also alleged that Jose made
blatant lies to the trial court by alleging that Jed and Regina were his illegitimate children with Larry's wife,
Lilibeth, to cover up for his homosexual relationship with Larry. 24chanrobleslaw
In his answer before the Integrated Bar of the Philippines, Jose denies being remiss in his fatherly duties to
Joanne during her minority. He alleged that he always offered help, but it was often declined. 25 He also
alleged that he adopted Jed and Regina because they are his illegitimate children. He denied having
committed any of the falsification alluded to by Rosario. He also stated that he had suffered a stroke in 1998
that left him paralyzed. He alleged that his income had been diminished because several properties had to be
sold to pay for medical treatments.26 He then implored the Integrated Bar of the Philippines to weigh on the
case with "justice and equity."27chanrobleslaw
On October 8, 2006, Jose died in Laoag City, Ilocos Norte. 28chanrobleslaw
On October 18, 2007, Rosario and Joanne filed a petition for annulment of judgment under Rule 47 of the
Rules of Civil Procedure with the Court of Appeals, seeking to annul the October 16, 2000 decision of the
trial court approving Jed and Regina's adoption. 29chanrobleslaw
In their petition, Rosario and Joanne allege that they learned of the adoption sometime in 2005. 30 They
allege that Rosario's affidavit of consent, marked by the trial court as "Exh. K,"31 was fraudulent.32 They also
allege that Jed and Regina's birth certificates showed different sets of information, such as the age of their
mother, Lilibeth, at the time she gave birth. They argue that one set of birth certificates states the father to be
Jose and in another set of National Statistic Office certificates shows the father to be Larry, Jose's driver and
alleged lover.33 It was further alleged that Jed and Regina are not actually Jose's illegitimate children but the
legitimate children of Lilibeth and Larry who were married at the time of their birth. 34chanrobleslaw
On May 26, 2009, the Court of Appeals denied the petition.
While admittedly, no notice was given by the trial court to Rosario and Joanne of the adoption, the appellate
court ruled that there is "no explicit provision in the rules that the spouse and legitimate child of the adopter
. . . should be personally notified of the hearing."35chanrobleslaw
The appellate court "abhor[red] the mind baffling scheme employed by [Jose] in obtaining an adoption
decree in favor of [his illegitimate children] to the prejudice of the interests of his legitimate heirs" 36 but
stated that its hands were bound by the trial court decision that had already attained "finality and
immutability."37chanrobleslaw
The appellate court also ruled that the alleged fraudulent information contained in the different sets of birth
certificates required the determination of the identities of the persons stated therein and was, therefore,
beyond the scope of the action for annulment of judgment. The alleged fraud was also perpetrated during the
trial and could not be classified as extrinsic fraud, which is required in an action for annulment of
judgment.38chanrobleslaw
When Rosario and Joanne's motion for reconsideration was denied on July 10, 2009, 39 they filed this
petition.
The issue before this court is whether the Court of Appeals erred in denying the petition for annulment for
failure of petitioners to (1) show that the trial court lacked jurisdiction and (2) show the existence of
extrinsic fraud.
In their petition, petitioners argue that the appellate court erred in its application of the law on extrinsic fraud
as ground to annul a judgment.40 They argue that because of the fabricated consent obtained by Jose and the
alleged false information shown in the birth certificates presented as evidence before the trial court, 41 they
were not given the opportunity to oppose the petition since the entire proceedings were concealed from
them.42chanrobleslaw
Petitioners also argue that the appellate court misunderstood and misapplied the law on jurisdiction despite
the denial of due process, notice, and non-inclusion of indispensable parties.43 They argue that the adoption
of illegitimate children requires the consent, not only of the spouse, but also the legitimate children 10 years
or over of the adopter, and such consent was never secured from Joanne. 44chanrobleslaw
Respondents, however, argue in their comment that petitioners could not have been deprived of their day in
court since their interest was "amply protected by the participation and representation of the Solicitor
General through the deputized public prosecutor."45chanrobleslaw
Respondents also argue that there was constructive notice through publication for three consecutive weeks
in a newspaper of general circulation, which constitutes not only notice to them but also notice to the world
of the adoption proceedings.46 They argue that since the alleged fraud was perpetrated during the trial, it
cannot be said to be extrinsic fraud but intrinsic fraud, which is not a ground for annulment of
judgment.47 They also argue that petitioners were not indispensable parties because adoption is an action in
rem and, as such, the only indispensable party is the state. 48chanrobleslaw
The petition is granted.
Annulment of judgment under Rule 47
of the Rules of Civil Procedure
Under Rule 47, Section 1 of the Rules of Civil Procedure, a party may file an action with the Court of
603
Appeals to annul judgments or final orders and resolutions in civil actions of Regional Trial Courts. This
remedy will only be available if "the ordinary remedies of new trial, appeal, petition for relief or other
appropriate remedies are no longer available through no fault of the petitioner." 49chanrobleslaw
In Dare Adventure Farm Corporation v. Court of Appeals:50chanrobleslaw
A petition for annulment of judgment is a remedy in equity so exceptional in nature that it may be availed of
only when other remedies are wanting, and only if the judgment, final order or final resolution sought, to be
annulled was rendered by a court lacking jurisdiction or through extrinsic fraud. Yet, the remedy, being
exceptional in character, is not allowed to be so easily and readily abused by parties aggrieved by the final
judgments, orders or resolutions. The Court has thus instituted safeguards by limiting the grounds for the
annulment to lack of jurisdiction and extrinsic fraud, and by prescribing in Section 1 of Rule 47 of the Rules
of Court that the petitioner should show that the ordinary remedies of new trial, appeal, petition for relief or
other appropriate remedies are no longer available through no fault of the petitioner. A petition for
annulment that ignores or disregards any of the safeguards cannot prosper.
The attitude of judicial reluctance towards the annulment of a judgment, final order or final resolution is
understandable, for the remedy disregards the time-honored doctrine of immutability and unalterability of
final judgments, a solid corner stone in the dispensation of justice by the courts. The doctrine of
immutability and unalterability serves a two-fold purpose, namely: (a) to avoid delay in the administration
of justice and thus, procedurally, to make orderly the discharge of judicial business; and (b) to put an end to
judicial controversies, at the risk of occasional errors, which is precisely why the courts exist. As to the first,
a judgment that has acquired finality becomes immutable and unalterable and is no longer to be modified in
any respect even if the modification is meant to correct an erroneous conclusion of fact or of law, and
whether the modification is made by the court that rendered the decision or by the highest court of the land.
As to the latter, controversies cannot drag on indefinitely because fundamental considerations of public
policy and sound practice demand that the rights and obligations of every litigant must not hang in suspense
for an indefinite period of time.51 (Emphasis supplied)
Because of the exceptional nature of the remedy, there are only two grounds by which annulment of
judgment may be availed of: extrinsic fraud, which must be brought four years from discovery, and lack of
jurisdiction, which must be brought before it is barred by estoppel or laches. 52chanrobleslaw
Lack of jurisdiction under this rule means lack of jurisdiction over the nature of the action or subject matter,
or lack of jurisdiction over the parties.53 Extrinsic fraud, on the other hand, is "[that which] prevents a party
from having a trial or from presenting his entire case to the court, or [that which] operates upon matters
pertaining not to the judgment itself but to the manner in which it is procured." 54chanrobleslaw
The grant of adoption over respondents should be annulled as the trial court did not validly acquire
jurisdiction over the proceedings, and the favorable decision was obtained through extrinsic fraud.
Jurisdiction over adoption proceedings
vis-a-vis the law on adoption
Petitioners argue that they should have been given notice by the trial court of the adoption, as adoption laws
require their consent as a requisite in the proceedings.
Petitioners are correct.
It is settled that "the jurisdiction of the court is determined by the statute in force at the time of the
commencement of the action."55 As Jose filed the petition for adoption on August 1, 2000, it is Republic Act
No. 855256 which applies over the proceedings. The law on adoption requires that the adoption by the father
of a child born out of wedlock obtain not only the consent of his wife but also the consent of his legitimate
children.
Under Article III, Section 7 of Republic Act No. 8552, the husband must first obtain the consent of his wife
if he seeks to adopt his own children born out of wedlock:chanRoblesvirtualLawlibrary
ARTICLE III
ELIGIBILITY
SEC. 7. Who May Adopt. — The following may adopt:chanroblesvirtuallawlibrary
Husband and wife shall jointly adopt, except in the following cases:chanroblesvirtuallawlibrary
(i) if one spouse seeks to adopt the legitimate son/daughter of the other; or
(ii) if one spouse seeks to adopt his/her own illegitimate son/daughter: Provided, however, That the other
spouse has signified, his/her consent thereto; or
(iii) if the spouses are legally separated from each other. . . (Emphasis supplied)
The provision is mandatory. As a general rule, the husband and wife must file a joint petition for adoption.
The rationale for this is stated in In Re: Petition for Adoption of Michelle P. Lim:57chanrobleslaw
The use of the word "shall" in the above-quoted provision means that joint adoption by the husband and the
wife is mandatory. This is in consonance with the concept of joint parental authority over the child which is
the ideal situation. As the child to be adopted is elevated to the level of a legitimate child, it is but natural to
require the spouses to adopt jointly. The rule also insures harmony between the spouses.58
The law provides for several exceptions to the general rule, as in a situation where a spouse seeks to adopt
his or her own children born out of wedlock. In this instance, joint adoption is not necessary. However, the
spouse seeking to adopt must first obtain the consent of his or her spouse.
In the absence of any decree of legal separation or annulment, Jose and Rosario remained legally married
despite their de facto separation. For Jose to be eligible to adopt Jed and Regina, Rosario must first signify
her consent to the adoption. Jose, however, did not validly obtain Rosario's consent. His submission of a
fraudulent affidavit of consent in her name cannot be considered compliance of the requisites of the law.
Had Rosario been given notice by the trial court of the proceedings, she would have had a reasonable
opportunity to contest the validity of the affidavit. Since her consent was not obtained, Jose was ineligible to
adopt.
The law also requires the written consent of the adopter's children if they are 10 years old or older. In Article
III, Section 9 of Republic Act No. 8552:chanRoblesvirtualLawlibrary
SEC. 9. Whose Consent is Necessary to the Adoption. — After being properly counseled and informed of
his/her right to give or withhold his/her approval of the adoption, the written consent of the following to the
adoption is hereby required:chanroblesvirtuallawlibrary
(c) The legitimate and adopted sons/daughters, ten (10) years of age or over, of the adopter(s) and adoptee,
if any; (Emphasis supplied)
604
The consent of the adopter's other children is necessary as it ensures harmony among the prospective
siblings. It also sufficiently puts the other children on notice that they will have to share their parent's love
and care, as well as their future legitimes, with another person.
It is undisputed that Joanne was Jose and Rosario's legitimate child and that she was over 10 years old at the
time of the adoption proceedings. Her written consent, therefore, was necessary for the adoption to be valid.
To circumvent this requirement, however, Jose manifested to the trial court that he and Rosario were
childless, thereby preventing Joanne from being notified of the proceedings. As her written consent was
never obtained, the adoption was not valid.
For the adoption to be valid, petitioners' consent was required by Republic Act No. 8552. Personal service of
summons should have been effected on the spouse and all legitimate children to ensure that their substantive
rights are protected. It is not enough to rely on constructive notice as in this case. Surreptitious use of
procedural technicalities cannot be privileged over substantive statutory rights.
Since the trial court failed to personally serve notice on Rosario and Joanne of the proceedings, it never
validly acquired jurisdiction.
There was extrinsic fraud
The appellate court, in denying the petition, ruled that while fraud may have been committed in this case, it
was only intrinsic fraud, rather than extrinsic fraud. This is erroneous.
In People v. Court of Appeals and Socorro Florece:59chanrobleslaw
Extrinsic fraud refers to any fraudulent act of the prevailing party in litigation committed outside of the trial
of the case, whereby the defeated party is prevented from fully exhibiting his side of the case by fraud or
deception practiced on him by his opponent, such as by keeping him away from court, by giving him a
false promise of a compromise, or where the defendant never had the knowledge of the suit, being kept in
ignorance by the acts of the plaintiff, or where an attorney fraudulently or without authority connives at his
defeat.60 (Emphasis supplied)
An action for annulment based on extrinsic fraud must be brought within four years from
discovery.61Petitioners alleged that they were made aware of the adoption only in 2005. The filing of this
petition on October 18, 2007 is within the period allowed by the rules.
The badges of fraud are present in this case.
First, the petition for adoption was filed in a place that had no relation to any of the parties. Jose was a
resident of Laoag City, llocos Norte.62 Larry and Lilibeth were residents of Barangay 6, Laoag City. 63 Jed
and Regina were born in San Nicolas, Ilocos Norte. 64 Rosario and Joanne were residents of Parañaque City,
Manila.65 The petition for adoption, however, was filed in the Regional Trial Court of Batac, Ilocos
Norte.66 The trial court gave due course to the petition on Jose's bare allegation in his petition that he was a
resident of Batac,67 even though it is admitted in the Home Study Report that he was a practicing lawyer in
Laoag City.68chanrobleslaw
Second, using the process of delayed registration,69 Jose was able to secure birth certificates for Jed and
Regina showing him to be the father and Larry as merely the informant.70 Worse still is that two different
sets of fraudulent certificates were procured: one showing that Jose and Lilibeth were married on December
4, 1986 in Manila,71 and another wherein the portion for the mother's name was not filled in at all.72 The
birth certificates of Jed and Regina from the National Statistics Office, however, show that their father was
Larry R. Rentegrado.73 These certificates are in clear contradiction to the birth certificates submitted by Jose
to the trial court in support of his petition for adoption.
Third, Jose blatantly lied to the trial court when he declared that his motivation for adoption was because he
and his wife, Rosario, were childless,74 to the prejudice of their daughter, Joanne. The consent of Rosario to
the adoption was also disputed by Rosario and alleged to be fraudulent. 75chanrobleslaw
All these tactics were employed by Jose, not only to induce the trial court in approving his petition, but also
to prevent Rosario and Joanne from participating in the proceedings or opposing the petition.
The appellate court erroneously classified the fraud employed by Jose as intrinsic on the basis that they were
"forged instruments or perjured testimonies"76 presented during the trial. It failed to understand, however,
that fraud is considered intrinsic when the other party was either present at the trial or was a participant in
the proceedings when such instrument or testimony was presented in court,
thus:chanRoblesvirtualLawlibrary
[I]ntrinsic fraud refers to the acts of a party at a trial that prevented a fair and just determination of the case,
but the difference is that the acts or things, like falsification and false testimony, could have been litigated
and determined at the trial or adjudication of the case. In other words, intrinsic fraud does not deprive the
petitioner of his day in court because he can guard against that kind of fraud through so many means,
including a thorough trial preparation, a skillful, cross-examination, resorting to the modes of discovery,
and proper scientific or forensic applications. Indeed, forgery of documents and evidence for use at the trial
and perjury in court testimony have been regarded as not preventing the participation of any party in the
proceedings, and are not, therefore, constitutive of extrinsic fraud.77 (Emphasis supplied)
inducement, or other similar acts;
(ii) non-compliance with the procedures and safeguards provided by the law for adoption; or
(iii) subjecting or exposing the child to be adopted to danger, abuse, or exploitation.
(b) Any person who shall cause the fictitious registration of the birth of a child under the name(s) of a
person(s) who is not his/her biological parent(s) shall be guilty of simulation of birth, and shall be
punished by prision mayor in its medium period and a fine not exceeding Fifty thousand pesos
(P50.000.00). (Emphasis supplied)
Unfortunately, Jose's death carried with it the extinguishment of any of his criminal liabilities. 78 Republic
Act No. 8552 also fails to provide any provision on the status of adoption decrees if the adoption is found to
have been obtained fraudulently. Petitioners also cannot invoke Article VI, Section 19 of Republic Act No.
855279 since rescission of adoption can only be availed of by the adoptee. Petitioners, therefore, are left with
no other remedy in law other than the annulment of the judgment.
The fraud employed in this case has been to Joanne's prejudice. There is reason to believe that Joanne has
grown up having never experienced the love and care of a father, her parents having separated a year after
her birth. She has never even benefited from any monetary support from her father. Despite all these
adversities, Joanne was able to obtain a medical degree from the University of the Philippines College of
Medicine80 and is now working as a doctor in Canada.81 These accomplishments, however, are poor
substitutes if the injustice done upon her is allowed to continue.
WHEREFORE, the petition is GRANTED. The decision dated October 16, 2000 of the Regional Trial
Court of Batac, Ilocos Norte, Branch 17 in SP. Proc. No. 3445-17 is rendered NULL and VOID.
SO ORDERED.

When fraud is employed by a party precisely to prevent the participation of any other interested party, as in
this case, then the fraud is extrinsic, regardless of whether the fraud was committed through the use of
forged documents or perjured testimony during the trial.

Jose's actions prevented Rosario and Joanne from having a reasonable opportunity to contest the adoption.
Had Rosario and Joanne been allowed to participate, the trial court would have hesitated to grant Jose's
petition since he failed to fulfill the necessary requirements under the law. There can be no other conclusion
than that because of Jose's acts, the trial court granted the decree of adoption under fraudulent
circumstances.

The law itself provides for penal sanctions for those who violate its provisions. Under Article VII, Section
21 of Republic Act No. 8552:chanRoblesvirtualLawlibrary
ARTICLE VII
VIOLATIONS AND PENALTIES

SEC. 21. Violations and Penalties. —

(a) The penalty of imprisonment ranging from six (6) years and one (1) day to twelve (12) years and/or a
fine not less than Fifty thousand pesos (P50,000.00), but not more than Two hundred thousand pesos
(P200,000.00) at the discretion of the court shall be imposed on any person who shall commit any of
the following acts:
(i) obtaining consent for an adoption through coercion, undue influence, fraud, improper material

605
 THIRD DIVISION
G.R. No. 105308 September 25, 1998
HERBERT CANG, petitioner,
vs.
COURT OF APPEALS and Spouses RONALD V. CLAVANO and MARIA CLARA
CLAVANO, respondents.
ROMERO, J.:
Can minor children be legally adopted without the written consent of a natural parent on the ground that the
latter has abandoned them? The answer to this interesting query, certainly not one of first impression, would
have to be reached, not solely on the basis of law and jurisprudence, but also the hard reality presented by
the facts of the case.
This is the question posed before this Court in this petition for review on certiorari of the Decision1 of the
Court of Appeals affirming the decree of adoption issued by the Regional Trial Court of Cebu City, Branch
14,2 in Special Proceedings No. 1744-CEB, "In the Matter of the Petition for Adoption of the minors Keith,
Charmaine and Joseph Anthony, all surnamed Cang, Spouses Ronald V. Clavano and Maria Clara Diago
Clavano, petitioners."
Petitioner Herbert Cang and Anna Marie Clavano who were married on January 27, 1973, begot three
children, namely: Keith, born on July 3, 1973; Charmaine, born on January 23, 1977, and Joseph Anthony,
born on January 3, 1981.
During the early years of their marriage, the Cang couple's relationship was undisturbed. Not long thereafter,
however, Anna Marie learned of her husband's alleged extramarital affair with Wilma Soco, a family friend
of the Clavanos.
Upon learning of her husband's alleged illicit liaison, Anna Marie filed a petition for legal separation with
alimonypendente lite 3 with the then Juvenile and Domestic Relations Court of Cebu 4 which rendered a
decision5 approving the joint manifestation of the Cang spouses providing that they agreed to "live
separately and apart or from bed and board." They further agreed:
(c) That the children of the parties shall be entitled to a monthly
support of ONE THOUSAND PESOS (P1,000.00) effective from the
date of the filing of the complaint. This shall constitute a first lien on
the net proceeds of the house and lot jointly owned by the parties
situated at Cinco Village, Mandaue City;
(d) That the plaintiff shall be entitled to enter into any contract or
agreement with any person or persons, natural or juridical without the
written consent of the husband; or any undertaking or acts that
ordinarily requires husband's consent as the parties are by this
agreement legally separated; 6
Petitioner then left for the United States where he sought a divorce from Anna Marie before the Second
Judicial District Court of the State of Nevada. Said court issued the divorce decree that also granted sole
custody of the three minor children to Anna Marie, reserving "rights of visitation at all reasonable times and
places" to petitioner. 7
Thereafter, petitioner took an American wife and thus became a naturalized American citizen. In 1986, he
divorced his American wife and never remarried.
While in the United States, petitioner worked in Tablante Medical Clinic earning P18,000.00 to P20,000.00
a month8a portion of which was remitted to the Philippines for his children's expenses and another,
deposited in the bank in the name of his children.
606
Meanwhile, on September 25, 1987, private respondents Ronald V. Clavano and Maria Clara Diago
Clavano, respectively the brother and sister-in-law of Anna Marie, filed Special Proceedings No. 1744-CEB
for the adoption of the three minor Cang children before the Regional Trial Court of Cebu. The petition
bears the signature of then 14-year-old Keith signifying consent to his adoption. Anna Marie likewise filed
an affidavit of consent alleging that her husband had "evaded his legal obligation to support" his children;
that her brothers and sisters including Ronald V. Clavano, had been helping her in taking care of the
children; that because she would be going to the United States to attend to a family business, "leaving the
children would be a problem and would naturally hamper (her) job-seeking venture abroad;" and that her
husband had "long forfeited his parental rights" over the children for the following reasons:
1. The decision in Civil Case No. JD-707 allowed her to enter into any contract without
the written consent of her husband;
2. Her husband had left the Philippines to be an illegal alien in the United States and had
been transferring from one place to another to avoid detection by Immigration authorities,
and
3. Her husband had divorced her.
Upon learning of the petitioner for adoption, petitioner immediately returned to the Philippines and filed an
opposition thereto, alleging that, although private respondents Ronald and Maria Clara Clavano were
financially capable of supporting the children while his finances were "too meager" compared to theirs, he
could not "in conscience, allow anybody to strip him of his parental authority over his beloved children."
Pending resolution of the petition for adoption, petitioner moved to reacquire custody over his children
alleging that Anna Marie had transferred to the United States thereby leaving custody of their children to
private respondents. On January 11, 1988, the Regional Trial Court of Cebu City, Branch 19, issued an order
finding that Anna Marie had, in effect, relinquished custody over the children and, therefore, such custody
should be transferred to the father. The court then directed the Clavanos to deliver custody over the minors
to petitioner.
On March 27, 1990, the Regional Trial Court of Cebu City, Branch 14, issued a decree of adoption with a
dispositive portion reading as follows:
WHEREFORE, premises considered, the petition for adoption of the minors Keith,
Charmaine and Joseph Anthony all surnamed Cang, by the petitioner-spouses Ronald V.
Clavano and Maria Clara Diago Clavano is hereby granted and approved. These children
shall henceforth be known and called as Keith D. Clavano, Charmaine D. Clavano and
Joseph Anthony D. Clavano respectively. Moreover, this Decree of Adoption shall:
(1) Confer upon the adopted children the same rights and duties as
though they were in fact the legitimate children of the petitioners;
(2) Dissolve the authority vested in the parents by nature, of the
children; and,
(3) Vest the same authority in the petitioners.
Furnish the Local Civil Registrar of Cebu City, Philippines with a copy of this Decree of
Adoption for registration purposes.
SO ORDERED.
In so ruling, the lower court was "impelled" by these reasons:
(1) The Cang children had, since birth, developed "close filial ties with
the Clavano family, especially their maternal uncle," petitioner Ronald
Clavano.
(2) Ronald and Maria Clara Clavano were childless and, with their
printing press, real estate business, export business and gasoline
station and mini-mart in Rosemead, California, U.S.A., had substantial
assets and income.
 (3) The natural mother of the children, Anna Marie, nicknamed
"Menchu," approved of the adoption because of her heart ailment,
near-fatal accident in 1981, and the fact that she could not provide
them a secure and happy future as she "travels a lot."
(4) The Clavanos could provide the children moral and spiritual
direction as they would go to church together and had sent the children
to Catholic schools.
(5) The children themselves manifested their desire to be adopted by
the Clavanos — Keith had testified and expressed the wish to be
adopted by the Clavanos while the two younger ones were observed
by the court to have "snuggled" close to Ronald even though their
natural mother was around.
On the other hand, the lower court considered the opposition of petitioner to rest on "a very shaky
foundation" because of its findings that:
(1) Petitioner was "morally unfit to be the father of his children" on
account of his being "an improvident father of his family" and an
"undisguised Lothario." This conclusion is based on the testimony of
his alleged paramour, mother of his two sons and close friend of Anna
Marie, Wilma Soco, who said that she and petitioner lived as husband
and wife in the very house of the Cangs in Opao, Mandaue City.
(2) The alleged deposits of around $10,000 that were of
"comparatively recent dates" were "attempts at verisimilitude" as these
were joint deposits the authenticity of which could not be verified.
(3) Contrary to pe
adoption did not present as witness the representative of the Department of Social Welfare and Development
who made the case study report required by law.
The Court of Appeals affirmed the decree of adoption stating:
Art. 188 of the Family Code requires the written consent of the natural parents of the
child to be adopted. It has been held however that the consent of the parent who has
abandoned the child is not necessary (Dayrit vs. Piccio, 92 Phil. 729; Santos vs.
Ananzanso, 16 SCRA 344). The question therefore is whether or not oppositor may be
considered as having abandoned the children. In adoption cases, abandonment connotes
any conduct on the part of the parent to forego parental duties and relinquish parental
claims to the child, or the neglect or refusal to perform the natural and legal obligations
which parents owe their children (Santos vs. Ananzanso, supra), or the withholding of the
parent's presence, his care and the opportunity to display voluntary affection. The issue of
abandonment is amply covered by the discussion of the first error.
Oppositor argues that he has been sending dollar remittances to the children and has in
fact even maintained bank accounts in their names. His duty to provide support comes
from two judicial pronouncements. The first, the decision in JD-707 CEB, supra, obliges
him to pay the children P1,000.00 a month. The second is mandated by the divorce
decree of the Nevada, U.S.A. Federal Court which orders him to pay monthly support of
US$50.00 for each child. Oppositor has not submitted any evidence to show compliance
with the decision in JD-101 CEB, but he has submitted 22 cancelled dollar checks (Exhs.
24 to 45) drawn in the children's names totalling $2,126.98. The last remittance was on
October 6, 1987 (Exh. 45). His obligation to provide support commenced under the
divorce decree on May 5, 1982 so that as of October 6, 1987, oppositor should have made