G.R. No.

L-28673 October 23, 1984

SAMAR MINING COMPANY, INC., plaintiff-appellee,

vs.
NORDEUTSCHER LLOYD and C.F. SHARP & COMPANY, INC., defendants-appellants.

CUEVAS, J.:

This is an appeal taken directly to Us on certiorari from the decision of the defunct Court of First Instance
of Manila, finding defendants carrier and agent, liable for the value of goods never delivered to plaintiff
consignee. The issue raised is a pure question of law, which is, the liability of the defendants, now
appellants, under the bill of lading covering the subject shipment.

The case arose from an importation made by plaintiff, now appellee, SAMAR MINING COMPANY, INC., of
one (1) crate Optima welded wedge wire sieves through the M/S SCHWABENSTEIN a vessel owned by
defendant-appellant NORDEUTSCHER LLOYD, (represented in the Philippines by its agent, C.F. SHARP &
CO., INC.), which shipment is covered by Bill of Lading No. 18 duly issued to consignee SAMAR MINING
COMPANY, INC. Upon arrival of the aforesaid vessel at the port of Manila, the aforementioned importation
was unloaded and delivered in good order and condition to the bonded warehouse of AMCYL. 1 The goods
were however never delivered to, nor received by, the consignee at the port of destination — Davao.

When the letters of complaint sent to defendants failed to elicit the desired response, consignee herein
appellee, filed a formal claim for P1,691.93, the equivalent of $424.00 at the prevailing rate of exchange at
that time, against the former, but neither paid. Hence, the filing of the instant suit to enforce payment.
Defendants-appellants brought in AMCYL as third party defendant.

The trial court rendered judgment in favor of plaintiff, ordering defendants to pay the amount of P1,691.93
plus attorney's fees and costs. However, the Court stated that defendants may recoup whatever they may
pay plaintiff by enforcing the judgment against third party defendant AMCYL which had earlier been
declared in default. Only the defendants appealed from said decision.

The issue at hand demands a close scrutiny of Bill of Lading No. 18 and its various clauses and stipulations
which should be examined in the light of pertinent legal provisions and settled jurisprudence. This
undertaking is not only proper but necessary as well because of the nature of the bill of lading which
operates both as a receipt for the goods; and more importantly, as a contract to transport and deliver the
same as stipulated therein. 2 Being a contract, it is the law between the parties thereto 3 who are bound by
its terms and conditions 4 provided that these are not contrary to law, morals, good customs, public order
and public policy. 5

Bill of Lading No. 18 sets forth in page 2 thereof 6 that one (1) crate of Optima welded wedge wire sieves
was received by the carrier NORDEUTSCHER LLOYD at the "port of loading" which is Bremen, Germany,
while the freight had been prepaid up to the port of destination or the "port of discharge of goods in this
case, Davao, the carrier undertook to transport the goods in its vessel, M/S SCHWABENSTEIN only up to
the "port of discharge from ship-Manila. Thereafter, the goods were to be transshipped by the carrier to the
port of destination or "port of discharge of goods The stipulation is plainly indicated on the face of the bill
which contains the following phrase printed below the space provided for the port of discharge from ship",
thus: if goods are to be transshipped at port of discharge, show destination under the column for
"description of contents" 7

As instructed above, the following words appeared typewritten under the column for "description of
contents": PORT OF DISCHARGE OF GOODS: DAVAO FREIGHT PREPAID 8

It is clear, then, that in discharging the goods from the ship at the port of Manila, and delivering the same
into the custody of AMCYL, the bonded warehouse, appellants were acting in full accord with the
contractual stipulations contained in Bill of Lading No. 18. The delivery of the goods to AMCYL was part of
appellants' duty to transship the goods from Manila to their port of destination-Davao. The word
"transship" means: to transfer for further transportation from one ship or conveyance to another 9
The extent of appellant carrier's responsibility and/or liability in the transshipment of the goods in
question are spelled out and delineated under Section 1, paragraph 3 of Bill of Lading No. 18, to wit: The
carrier shall not be liable in any capacity whatsoever for any delay, loss or damage occurring before the
goods enter ship's tackle to be loaded or after the goods leave ship's tackle to be discharged, transshipped or
forwarded ... and in Section 11 of the same Bill, which provides:

Whenever the carrier or m aster may deem it advisable or in any case where the goods are
placed at carrier's disposal at or consigned to a point where the ship does not expect to load
or discharge, the carrier or master may, without notice, forward the whole or any part of
the goods before or after loading at the original port of shipment, ... This carrier, in making
arrangements for any transshipping or forwarding vessels or means of transportation not
operated by this carrier shall be considered solely the forwarding agent of the shipper and
without any other responsibility whatsoever even though the freight for the whole
transport has been collected by him. ... Pending or during forwarding or transshipping the
carrier may store the goods ashore or afloat solely as agent of the shipper and at risk and
expense of the goods and the carrier shall not be liable for detention nor responsible for
the acts, neglect, delay or failure to act of anyone to whom the goods are entrusted or
delivered for storage, handling or any service incidental thereto (Emphasis supplied) 10

Defendants-appellants now shirk liability for the loss of the subject goods by claiming that they have
discharged the same in full and good condition unto the custody of AMCYL at the port of discharge from
ship — Manila, and therefore, pursuant to the aforequoted stipulation (Sec. 11) in the bill of lading, their
responsibility for the cargo had ceased. 11

We find merit in appellants' stand. The validity of stipulations in bills of lading exempting the carrier from
liability for loss or damage to the goods when the same are not in its actual custody has been upheld by Us
in PHOENIX ASSURANCE CO., LTD. vs. UNITED STATES LINES, 22 SCRA 674 (1968). Said case matches the
present controversy not only as to the material facts but more importantly, as to the stipulations contained
in the bill of lading concerned. As if to underline their awesome likeness, the goods in question in both cases
were destined for Davao, but were discharged from ship in Manila, in accordance with their respective bills
of lading.

The stipulations in the bill of lading in the PHOENIX case which are substantially the same as the subject
stipulations before Us, provides:

The carrier shall not be liable in any capacity whatsoever for any loss or damage to the
goods while the goods are not in its actual custody. (Par. 2, last subpar.)

xxx xxx xxx

The carrier or master, in making arrangements with any person for or in connection with
all transshipping or forwarding of the goods or the use of any means of transportation or
forwarding of goods not used or operated by the carrier, shall be considered solely the
agent of the shipper and consignee and without any other responsibility whatsoever or
for the cost thereof ... (Par. 16). 12

Finding the above stipulations not contrary to law, morals, good customs, public order or public policy, We
sustained their validity 13 Applying said stipulations as the law between the parties in the aforecited case,
the Court concluded that:

... The short form Bill of Lading ( ) states in no uncertain terms that the port of discharge
of the cargo is Manila, but that the same was to be transshipped beyond the port of
discharge to Davao City. Pursuant to the terms of the long form Bill of Lading ( ), appellee's
responsibility as a common carrier ceased the moment the goods were unloaded in Manila
and in the matter of transshipment, appellee acted merely as an agent of the shipper and
consignee. ... (Emphasis supplied) 14
Coming now to the case before Us, We hold, that by the authority of the above pronouncements, and in
conformity with the pertinent provisions of the New Civil Code, Section 11 of Bill of Lading No. 18 and the
third paragraph of Section 1 thereof are valid stipulations between the parties insofar as they exempt the
carrier from liability for loss or damage to the goods while the same are not in the latter's actual custody.

The liability of the common carrier for the loss, destruction or deterioration of goods transported from a
foreign country to the Philippines is governed primarily by the New Civil Code. 15 In all matters not
regulated by said Code, the rights and obligations of common carriers shall be governed by the Code of
Commerce and by special laws. 16 A careful perusal of the provisions of the New Civil Code on common
carriers (Section 4, Title VIII, Book IV) directs our attention to Article 1736 thereof, which reads:

Article 1736. The extraordinary responsibility of the common carrier lasts from the time
the goods are unconditionally placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or constructively, by the carrier to
the consignee, or to the person who has a right to receive them, without prejudice to the
provisions of article 1738.

Article 1738 referred to in the foregoing provision runs thus:

Article 1738. The extraordinary liability of the common carrier continues to be operative
even during the time the goods are stored in a warehouse of the carrier at the place of
destination, until the consignee has been advised of the arrival of the goods and has had
reasonable opportunity thereafter to remove them or otherwise dispose of them.

There is no doubt that Art. 1738 finds no applicability to the instant case. The said article contemplates a
situation where the goods had already reached their place of destination and are stored in the warehouse
of the carrier. The subject goods were still awaiting transshipment to their port of destination, and were
stored in the warehouse of a third party when last seen and/or heard of. However, Article 1736 is applicable
to the instant suit. Under said article, the carrier may be relieved of the responsibility for loss or damage to
the goods upon actual or constructive delivery of the same by the carrier to the consignee, or to the person
who has a right to receive them. In sales, actual delivery has been defined as the ceding of corporeal
possession by the seller, and the actual apprehension of corporeal possession by the buyer or by some
person authorized by him to receive the goods as his representative for the purpose of custody or
disposal. 17 By the same token, there is actual delivery in contracts for the transport of goods when
possession has been turned over to the consignee or to his duly authorized agent and a reasonable time is
given him to remove the goods. 18 The court a quo found that there was actual delivery to the consignee
through its duly authorized agent, the carrier.

It becomes necessary at this point to dissect the complex relationship that had developed between
appellant and appellee in the course of the transactions that gave birth to the present suit. Two
undertakings appeared embodied and/or provided for in the Bill of Lading 19 in question. The first is FOR
THE TRANSPORT OF GOODS from Bremen, Germany to Manila. The second, THE TRANSSHIPMENT OF THE
SAME GOODS from Manila to Davao, with appellant acting as agent of the consignee. 20 At the hiatus
between these two undertakings of appellant which is the moment when the subject goods are discharged
in Manila, its personality changes from that of carrier to that of agent of the consignee. Thus, the character
of appellant's possession also changes, from possession in its own name as carrier, into possession in the
name of consignee as the latter's agent. Such being the case, there was, in effect, actual delivery of the goods
from appellant as carrier to the same appellant as agent of the consignee. Upon such delivery, the appellant,
as erstwhile carrier, ceases to be responsible for any loss or damage that may befall the goods from that
point onwards. This is the full import of Article 1736, as applied to the case before Us.

But even as agent of the consignee, the appellant cannot be made answerable for the value of the missing
goods, It is true that the transshipment of the goods, which was the object of the agency, was not fully
performed. However, appellant had commenced said performance, the completion of which was aborted
by circumstances beyond its control. An agent who carries out the orders and instructions of the principal
without being guilty of negligence, deceit or fraud, cannot be held responsible for the failure of the principal
to accomplish the object of the agency, 21This can be gleaned from the following provisions of the New Civil
Code on the obligations of the agent:
 Article 1884. The agent is bound by his acceptance to carry out the agency, and is liable
for the damages which, through his non-performance, the principal may suffer.

xxx xxx xxx

Article 1889. The agent shall be liable for damages if, there being a conflict between his
interests and those of the principal, he should prefer his own.

Article 1892. The agent may appoint a substitute if the principal has not prohibited him
from doing so; but he shall be responsible for the acts of the substitute:

(1) When he was not given the power to appoint one;

(2) When he was given such power but without designating the person and the person
appointed was notoriously incompetent or insolvent.

xxx xxx xxx

Article 1909. The agent is responsible not only for fraud, but also for negligence which
shall be judged with more or less rigor by the courts, according to whether the agency was
or was not for a compensation.

The records fail to reveal proof of negligence, deceit or fraud committed by appellant or by its
representative in the Philippines. Neither is there any showing of notorious incompetence or insolvency on
the part of AMCYT, which acted as appellant's substitute in storing the goods awaiting transshipment.

The actions of appellant carrier and of its representative in the Philippines being in full faith with the lawful
stipulations of Bill of Lading No. 18 and in conformity with the provisions of the New Civil Code on common
carriers, agency and contracts, they incur no liability for the loss of the goods in question.

WHEREFORE, the appealed decision is hereby REVERSED. Plaintiff-appellee's complaint is hereby

DISMISSED.

No costs.

SO ORDERED.
G.R. No. L-30573 October 29, 1971

VICENTE M. DOMINGO, represented by his heirs, ANTONINA RAYMUNDO VDA. DE DOMINGO,

RICARDO, CESAR, AMELIA, VICENTE JR., SALVADOR, IRENE and JOSELITO, all surnamed
DOMINGO, petitioners-appellants,
vs.
GREGORIO M. DOMINGO, respondent-appellee, TEOFILO P. PURISIMA, intervenor-respondent..

MAKASIAR, J.:

Petitioner-appellant Vicente M. Domingo, now deceased and represented by his heirs, Antonina Raymundo
vda. de Domingo, Ricardo, Cesar, Amelia, Vicente Jr., Salvacion, Irene and Joselito, all surnamed Domingo,
sought the reversal of the majority decision dated, March 12, 1969 of the Special Division of Five of the
Court of Appeals affirming the judgment of the trial court, which sentenced the said Vicente M. Domingo to
pay Gregorio M. Domingo P2,307.50 and the intervenor Teofilo P. Purisima P2,607.50 with interest on both
amounts from the date of the filing of the complaint, to pay Gregorio Domingo P1,000.00 as moral and
exemplary damages and P500.00 as attorney's fees plus costs.

The following facts were found to be established by the majority of the Special Division of Five of the Court
of Appeals:

In a document Exhibit "A" executed on June 2, 1956, Vicente M. Domingo granted Gregorio Domingo, a real
estate broker, the exclusive agency to sell his lot No. 883 of Piedad Estate with an area of about 88,477
square meters at the rate of P2.00 per square meter (or for P176,954.00) with a commission of 5% on the
total price, if the property is sold by Vicente or by anyone else during the 30-day duration of the agency or
if the property is sold by Vicente within three months from the termination of the agency to apurchaser to
whom it was submitted by Gregorio during the continuance of the agency with notice to Vicente. The said
agency contract was in triplicate, one copy was given to Vicente, while the original and another copy were
retained by Gregorio.

On June 3, 1956, Gregorio authorized the intervenor Teofilo P. Purisima to look for a buyer, promising him
one-half of the 5% commission.

Thereafter, Teofilo Purisima introduced Oscar de Leon to Gregorio as a prospective buyer.

Oscar de Leon submitted a written offer which was very much lower than the price of P2.00 per square
meter (Exhibit "B"). Vicente directed Gregorio to tell Oscar de Leon to raise his offer. After several
conferences between Gregorio and Oscar de Leon, the latter raised his offer to P109,000.00 on June 20,
1956 as evidenced by Exhibit "C", to which Vicente agreed by signing Exhibit "C". Upon demand of Vicente,
Oscar de Leon issued to him a check in the amount of P1,000.00 as earnest money, after which Vicente
advanced to Gregorio the sum of P300.00. Oscar de Leon confirmed his former offer to pay for the property
at P1.20 per square meter in another letter, Exhibit "D". Subsequently, Vicente asked for an additional
amount of P1,000.00 as earnest money, which Oscar de Leon promised to deliver to him. Thereafter, Exhibit
"C" was amended to the effect that Oscar de Leon will vacate on or about September 15, 1956 his house and
lot at Denver Street, Quezon City which is part of the purchase price. It was again amended to the effect that
Oscar will vacate his house and lot on December 1, 1956, because his wife was on the family way and
Vicente could stay in lot No. 883 of Piedad Estate until June 1, 1957, in a document dated June 30, 1956 (the
year 1957 therein is a mere typographical error) and marked Exhibit "D". Pursuant to his promise to
Gregorio, Oscar gave him as a gift or propina the sum of One Thousand Pesos (P1,000.00) for succeeding in
persuading Vicente to sell his lot at P1.20 per square meter or a total in round figure of One Hundred Nine
Thousand Pesos (P109,000.00). This gift of One Thousand Pesos (P1,000.00) was not disclosed by Gregorio
to Vicente. Neither did Oscar pay Vicente the additional amount of One Thousand Pesos (P1,000.00) by way
of earnest money. In the deed of sale was not executed on August 1, 1956 as stipulated in Exhibit "C" nor
on August 15, 1956 as extended by Vicente, Oscar told Gregorio that he did not receive his money from his
brother in the United States, for which reason he was giving up the negotiation including the amount of One
Thousand Pesos (P1,000.00) given as earnest money to Vicente and the One Thousand Pesos (P1,000.00)
given to Gregorio aspropina or gift. When Oscar did not see him after several weeks, Gregorio sensed
something fishy. So, he went to Vicente and read a portion of Exhibit "A" marked habit "A-1" to the effect
that Vicente was still committed to pay him 5% commission, if the sale is consummated within three
months after the expiration of the 30-day period of the exclusive agency in his favor from the execution of
the agency contract on June 2, 1956 to a purchaser brought by Gregorio to Vicente during the said 30-day
period. Vicente grabbed the original of Exhibit "A" and tore it to pieces. Gregorio held his peace, not wanting
to antagonize Vicente further, because he had still duplicate of Exhibit "A". From his meeting with Vicente,
Gregorio proceeded to the office of the Register of Deeds of Quezon City, where he discovered Exhibit "G'
deed of sale executed on September 17, 1956 by Amparo Diaz, wife of Oscar de Leon, over their house and
lot No. 40 Denver Street, Cubao, Quezon City, in favor Vicente as down payment by Oscar de Leon on the
purchase price of Vicente's lot No. 883 of Piedad Estate. Upon thus learning that Vicente sold his property
to the same buyer, Oscar de Leon and his wife, he demanded in writting payment of his commission on the
sale price of One Hundred Nine Thousand Pesos (P109,000.00), Exhibit "H". He also conferred with Oscar
de Leon, who told him that Vicente went to him and asked him to eliminate Gregorio in the transaction and
that he would sell his property to him for One Hundred Four Thousand Pesos (P104,000.0 In Vicente's reply
to Gregorio's letter, Exhibit "H", Vicente stated that Gregorio is not entitled to the 5% commission because
he sold the property not to Gregorio's buyer, Oscar de Leon, but to another buyer, Amparo Diaz, wife of
Oscar de Leon.

The Court of Appeals found from the evidence that Exhibit "A", the exclusive agency contract, is genuine;
that Amparo Diaz, the vendee, being the wife of Oscar de Leon the sale by Vicente of his property is
practically a sale to Oscar de Leon since husband and wife have common or identical interests; that Gregorio
and intervenor Teofilo Purisima were the efficient cause in the consummation of the sale in favor of the
spouses Oscar de Leon and Amparo Diaz; that Oscar de Leon paid Gregorio the sum of One Thousand Pesos
(P1,000.00) as "propina" or gift and not as additional earnest money to be given to the plaintiff, because
Exhibit "66", Vicente's letter addressed to Oscar de Leon with respect to the additional earnest money, does
not appear to have been answered by Oscar de Leon and therefore there is no writing or document
supporting Oscar de Leon's testimony that he paid an additional earnest money of One Thousand Pesos
(P1,000.00) to Gregorio for delivery to Vicente, unlike the first amount of One Thousand Pesos (P1,000.00)
paid by Oscar de Leon to Vicente as earnest money, evidenced by the letter Exhibit "4"; and that Vicente did
not even mention such additional earnest money in his two replies Exhibits "I" and "J" to Gregorio's letter
of demand of the 5% commission.

The three issues in this appeal are (1) whether the failure on the part of Gregorio to disclose to Vicente the
payment to him by Oscar de Leon of the amount of One Thousand Pesos (P1,000.00) as gift or "propina" for
having persuaded Vicente to reduce the purchase price from P2.00 to P1.20 per square meter, so
constitutes fraud as to cause a forfeiture of his commission on the sale price; (2) whether Vicente or
Gregorio should be liable directly to the intervenor Teofilo Purisima for the latter's share in the expected
commission of Gregorio by reason of the sale; and (3) whether the award of legal interest, moral and
exemplary damages, attorney's fees and costs, was proper.

Unfortunately, the majority opinion penned by Justice Edilberto Soriano and concurred in by Justice Juan
Enriquez did not touch on these issues which were extensively discussed by Justice Magno Gatmaitan in his
dissenting opinion. However, Justice Esguerra, in his concurring opinion, affirmed that it does not
constitute breach of trust or fraud on the part of the broker and regarded same as merely part of the whole
process of bringing about the meeting of the minds of the seller and the purchaser and that the commitment
from the prospect buyer that he would give a reward to Gregorio if he could effect better terms for him
from the seller, independent of his legitimate commission, is not fraudulent, because the principal can reject
the terms offered by the prospective buyer if he believes that such terms are onerous disadvantageous to
him. On the other hand, Justice Gatmaitan, with whom Justice Antonio Cafizares corner held the view that
such an act on the part of Gregorio was fraudulent and constituted a breach of trust, which should deprive
him of his right to the commission.

The duties and liabilities of a broker to his employer are essentially those which an agent owes to his
principal.1

Consequently, the decisive legal provisions are in found Articles 1891 and 1909 of the New Civil Code.
 Art. 1891. Every agent is bound to render an account of his transactions and to deliver to
the principal whatever he may have received by virtue of the agency, even though it may
not be owing to the principal.

Every stipulation exempting the agent from the obligation to render an account shall be
void.

xxx xxx xxx

Art. 1909. The agent is responsible not only for fraud but also for negligence, which shall
be judged with more less rigor by the courts, according to whether the agency was or was
not for a compensation.

Article 1891 of the New Civil Code amends Article 17 of the old Spanish Civil Code which provides that:

Art. 1720. Every agent is bound to give an account of his transaction and to pay to the
principal whatever he may have received by virtue of the agency, even though what he has
received is not due to the principal.

The modification contained in the first paragraph Article 1891 consists in changing the phrase "to pay" to
"to deliver", which latter term is more comprehensive than the former.

Paragraph 2 of Article 1891 is a new addition designed to stress the highest loyalty that is required to an
agent — condemning as void any stipulation exempting the agent from the duty and liability imposed on
him in paragraph one thereof.

Article 1909 of the New Civil Code is essentially a reinstatement of Article 1726 of the old Spanish Civil
Code which reads thus:

Art. 1726. The agent is liable not only for fraud, but also for negligence, which shall be
judged with more or less severity by the courts, according to whether the agency was
gratuitous or for a price or reward.

The aforecited provisions demand the utmost good faith, fidelity, honesty, candor and fairness on the part
of the agent, the real estate broker in this case, to his principal, the vendor. The law imposes upon the agent
the absolute obligation to make a full disclosure or complete account to his principal of all his transactions
and other material facts relevant to the agency, so much so that the law as amended does not countenance
any stipulation exempting the agent from such an obligation and considers such an exemption as void. The
duty of an agent is likened to that of a trustee. This is not a technical or arbitrary rule but a rule founded on
the highest and truest principle of morality as well as of the strictest justice. 2

Hence, an agent who takes a secret profit in the nature of a bonus, gratuity or personal benefit from the
vendee, without revealing the same to his principal, the vendor, is guilty of a breach of his loyalty to the
principal and forfeits his right to collect the commission from his principal, even if the principal does not
suffer any injury by reason of such breach of fidelity, or that he obtained better results or that the agency
is a gratuitous one, or that usage or custom allows it; because the rule is to prevent the possibility of any
wrong, not to remedy or repair an actual damage.3 By taking such profit or bonus or gift or propina from
the vendee, the agent thereby assumes a position wholly inconsistent with that of being an agent for
hisprincipal, who has a right to treat him, insofar as his commission is concerned, as if no agency had
existed. The fact that the principal may have been benefited by the valuable services of the said agent does
not exculpate the agent who has only himself to blame for such a result by reason of his treachery or perfidy.

This Court has been consistent in the rigorous application of Article 1720 of the old Spanish Civil Code.
Thus, for failure to deliver sums of money paid to him as an insurance agent for the account of his employer
as required by said Article 1720, said insurance agent was convicted estafa. 4 An administrator of an estate
was likewise under the same Article 1720 for failure to render an account of his administration to the heirs
unless the heirs consented thereto or are estopped by having accepted the correctness of his account
previously rendered.5

Because of his responsibility under the aforecited article 1720, an agent is likewise liable for estafa for
failure to deliver to his principal the total amount collected by him in behalf of his principal and cannot
retain the commission pertaining to him by subtracting the same from his collections. 6

A lawyer is equally liable unnder said Article 1720 if he fails to deliver to his client all the money and
property received by him for his client despite his attorney's lien.7 The duty of a commission agent to
render a full account his operations to his principal was reiterated in Duhart, etc. vs. Macias.8

The American jurisprudence on this score is well-nigh unanimous.

Where a principal has paid an agent or broker a commission while ignorant of the fact that
the latter has been unfaithful, the principal may recover back the commission paid, since
an agent or broker who has been unfaithful is not entitled to any compensation.

xxx xxx xxx

In discussing the right of the principal to recover commissions retained by an unfaithful

agent, the court in Little vs. Phipps (1911) 208 Mass. 331, 94 NE 260, 34 LRA (NS) 1046,
said: "It is well settled that the agent is bound to exercise the utmost good faith in his
dealings with his principal. As Lord Cairns said, this rule "is not a technical or arbitrary
rule. It is a rule founded on the highest and truest principles, of morality." Parker vs.
McKenna (1874) LR 10,Ch(Eng) 96,118 ... If the agent does not conduct himself with entire
fidelity towards his principal, but is guilty of taking a secret profit or commission in regard
the matter in which he is employed, he loses his right to compensation on the ground that
he has taken a position wholly inconsistent with that of agent for his employer, and which
gives his employer, upon discovering it, the right to treat him so far as compensation, at
least, is concerned as if no agency had existed. This may operate to give to the principal
the benefit of valuable services rendered by the agent, but the agent has only himself to
blame for that result."

xxx xxx xxx

The intent with which the agent took a secret profit has been held immaterial where the
agent has in fact entered into a relationship inconsistent with his agency, since the law
condemns the corrupting tendency of the inconsistent relationship. Little vs.
Phipps (1911) 94 NE 260.9

As a general rule, it is a breach of good faith and loyalty to his principal for an agent, while
the agency exists, so to deal with the subject matter thereof, or with information acquired
during the course of the agency, as to make a profit out of it for himself in excess of his
lawful compensation; and if he does so he may be held as a trustee and may be compelled
to account to his principal for all profits, advantages, rights, or privileges acquired by him in
such dealings, whether in performance or in violation of his duties, and be required to
transfer them to his principal upon being reimbursed for his expenditures for the same,
unless the principal has consented to or ratified the transaction knowing that benefit or
profit would accrue or had accrued, to the agent, or unless with such knowledge he has
allowed the agent so as to change his condition that he cannot be put in status quo. The
application of this rule is not affected by the fact that the principal did not suffer any injury
by reason of the agent's dealings or that he in fact obtained better results; nor is it affected
by the fact that there is a usage or custom to the contrary or that the agency is a gratuitous
one. (Emphasis applied.) 10

In the case at bar, defendant-appellee Gregorio Domingo as the broker, received a gift or propina in the
amount of One Thousand Pesos (P1,000.00) from the prospective buyer Oscar de Leon, without the
knowledge and consent of his principal, herein petitioner-appellant Vicente Domingo. His acceptance of
said substantial monetary gift corrupted his duty to serve the interests only of his principal and
undermined his loyalty to his principal, who gave him partial advance of Three Hundred Pesos (P300.00)
on his commission. As a consequence, instead of exerting his best to persuade his prospective buyer to
purchase the property on the most advantageous terms desired by his principal, the broker, herein
defendant-appellee Gregorio Domingo, succeeded in persuading his principal to accept the counter-offer of
the prospective buyer to purchase the property at P1.20 per square meter or One Hundred Nine Thousand
Pesos (P109,000.00) in round figure for the lot of 88,477 square meters, which is very much lower the the
price of P2.00 per square meter or One Hundred Seventy-Six Thousand Nine Hundred Fifty-Four Pesos
(P176,954.00) for said lot originally offered by his principal.

The duty embodied in Article 1891 of the New Civil Code will not apply if the agent or broker acted only as
a middleman with the task of merely bringing together the vendor and vendee, who themselves thereafter
will negotiate on the terms and conditions of the transaction. Neither would the rule apply if the agent or
broker had informed the principal of the gift or bonus or profit he received from the purchaser and his
principal did not object therto. 11 Herein defendant-appellee Gregorio Domingo was not merely a
middleman of the petitioner-appellant Vicente Domingo and the buyer Oscar de Leon. He was the broker
and agent of said petitioner-appellant only. And therein petitioner-appellant was not aware of the gift of
One Thousand Pesos (P1,000.00) received by Gregorio Domingo from the prospective buyer; much less did
he consent to his agent's accepting such a gift.

The fact that the buyer appearing in the deed of sale is Amparo Diaz, the wife of Oscar de Leon, does not
materially alter the situation; because the transaction, to be valid, must necessarily be with the consent of
the husband Oscar de Leon, who is the administrator of their conjugal assets including their house and lot
at No. 40 Denver Street, Cubao, Quezon City, which were given as part of and constituted the down payment
on, the purchase price of herein petitioner-appellant's lot No. 883 of Piedad Estate. Hence, both in law and
in fact, it was still Oscar de Leon who was the buyer.

As a necessary consequence of such breach of trust, defendant-appellee Gregorio Domingo must forfeit his
right to the commission and must return the part of the commission he received from his principal.

Teofilo Purisima, the sub-agent of Gregorio Domingo, can only recover from Gregorio Domingo his one-half
share of whatever amounts Gregorio Domingo received by virtue of the transaction as his sub-agency
contract was with Gregorio Domingo alone and not with Vicente Domingo, who was not even aware of such
sub-agency. Since Gregorio Domingo received from Vicente Domingo and Oscar de Leon respectively the
amounts of Three Hundred Pesos (P300.00) and One Thousand Pesos (P1,000.00) or a total of One
Thousand Three Hundred Pesos (P1,300.00), one-half of the same, which is Six Hundred Fifty Pesos
(P650.00), should be paid by Gregorio Domingo to Teofilo Purisima.

Because Gregorio Domingo's clearly unfounded complaint caused Vicente Domingo mental anguish and
serious anxiety as well as wounded feelings, petitioner-appellant Vicente Domingo should be awarded
moral damages in the reasonable amount of One Thousand Pesos (P1,000.00) attorney's fees in the
reasonable amount of One Thousand Pesos (P1,000.00), considering that this case has been pending for the
last fifteen (15) years from its filing on October 3, 1956.

WHEREFORE, the judgment is hereby rendered, reversing the decision of the Court of Appeals and directing
defendant-appellee Gregorio Domingo: (1) to pay to the heirs of Vicente Domingo the sum of One Thousand
Pesos (P1,000.00) as moral damages and One Thousand Pesos (P1,000.00) as attorney's fees; (2) to pay
Teofilo Purisima the sum of Six Hundred Fifty Pesos (P650.00); and (3) to pay the costs.
G.R. No. 136433 December 6, 2006

ANTONIO B. BALTAZAR, petitioner,

vs.
HONORABLE OMBUDSMAN, EULOGIO M. MARIANO, JOSE D. JIMENEZ, JR., TORIBIO E. ILAO, JR. and
ERNESTO R. SALENGA, respondents.

DECISION

VELASCO, JR., J.:

The Case

Ascribing grave abuse of discretion to respondent Ombudsman, this Petition for Review on
Certiorari,1 under Rule 45 pursuant to Section 27 of RA 6770,2 seeks to reverse and set aside the November
26, 1997 Order3 of the Office of the Special Prosecutor (OSP) in OMB-1-94-3425 duly approved by then
Ombudsman Aniano Desierto on August 21, 1998, which recommended the dismissal of the Information 4 in
Criminal Case No. 23661 filed before the Sandiganbayan against respondents Pampanga Provincial
Adjudicator Toribio E. Ilao, Jr., Chief Legal Officer Eulogio M. Mariano and Legal Officer Jose D. Jimenez, Jr.
(both of the DAR Legal Division in San Fernando, Pampanga), and Ernesto R. Salenga. The petition likewise
seeks to set aside the October 30, 1998 Memorandum5of the OSP duly approved by the Ombudsman on
November 27, 1998 which denied petitioner's Motion for Reconsideration. 6 Previously, the filing of the
Information against said respondents was authorized by the May 10, 1996 Resolution7 and October 3, 1996
Order8 of the Ombudsman which found probable cause that they granted unwarranted benefits, advantage,
and preference to respondent Salenga in violation of Section 3 (e) of RA 3019.9

The Facts

Paciencia Regala owns a seven (7)-hectare fishpond located at Sasmuan, Pampanga. Her Attorney-in-Fact
Faustino R. Mercado leased the fishpond for PhP 230,000.00 to Eduardo Lapid for a three (3)-year period,
that is, from August 7, 1990 to August 7, 1993.10 Lessee Eduardo Lapid in turn sub-leased the fishpond to
Rafael Lopez for PhP 50,000.00 during the last seven (7) months of the original lease, that is, from January
10, 1993 to August 7, 1993.11 Respondent Ernesto Salenga was hired by Eduardo Lapid as fishpond
watchman (bante-encargado). In the sub-lease, Rafael Lopez rehired respondent Salenga.

Meanwhile, on March 11, 1993, respondent Salenga, through a certain Francis Lagman, sent his January 28,
1993 demand letter12 to Rafael Lopez and Lourdes Lapid for unpaid salaries and non-payment of the 10%
share in the harvest.

On June 5, 1993, sub-lessee Rafael Lopez wrote a letter to respondent Salenga informing the latter that for
the last two (2) months of the sub-lease, he had given the rights over the fishpond to Mario Palad and Ambit
Perez for PhP 20,000.00.13 This prompted respondent Salenga to file a Complaint14 before the Provincial
Agrarian Reform Adjudication Board (PARAB), Region III, San Fernando, Pampanga docketed as DARAB
Case No. 552-P’93 entitled Ernesto R. Salenga v. Rafael L. Lopez and Lourdes L. Lapid for Maintenance of
Peaceful Possession, Collection of Sum of Money and Supervision of Harvest. The Complaint was signed by
respondent Jose D. Jimenez, Jr., Legal Officer of the Department of Agrarian Reform (DAR) Region III Office
in San Fernando, Pampanga, as counsel for respondent Salenga; whereas respondent Eulogio M. Mariano
was the Chief Legal Officer of DAR Region III. The case was assigned to respondent Toribio E. Ilao, Jr.,
Provincial Adjudicator of DARAB, Pampanga.

On May 10, 1993, respondent Salenga amended his complaint.15 The amendments included a prayer for the
issuance of a temporary restraining order (TRO) and preliminary injunction. However, before the prayer
for the issuance of a TRO could be acted upon, on June 16, 1993, respondent Salenga filed a Motion to
Maintain Status Quo and to Issue Restraining Order16 which was set for hearing on June 22, 1993. In the
hearing, however, only respondent Salenga with his counsel appeared despite notice to the other parties.
Consequently, the ex-partepresentation of respondent Salenga’s evidence in support of the prayer for the
issuance of a restraining order was allowed, since the motion was unopposed, and on July 21, 1993,
respondent Ilao, Jr. issued a TRO.17

Thereafter, respondent Salenga asked for supervision of the harvest, which the board sheriff did.
Accordingly, defendants Lopez and Lapid received their respective shares while respondent Salenga was
given his share under protest. In the subsequent hearing for the issuance of a preliminary injunction, again,
only respondent Salenga appeared and presented his evidence for the issuance of the writ.

Pending resolution of the case, Faustino Mercado, as Attorney-in-Fact of the fishpond owner Paciencia
Regala, filed a motion to intervene which was granted by respondent Ilao, Jr. through the November 15,
1993 Order. After the trial, respondent Ilao, Jr. rendered a Decision on May 29, 1995 dismissing the
Complaint for lack of merit; but losing plaintiff, respondent Salenga, appealed the decision before the
DARAB Appellate Board.

Complaint Before the Ombudsman

On November 24, 1994, pending resolution of the agrarian case, the instant case was instituted by
petitioner Antonio Baltazar, an alleged nephew of Faustino Mercado, through a Complaint-
Affidavit18 against private respondents before the Office of the Ombudsman which was docketed as OMB-
1-94-3425 entitled Antonio B. Baltazar v. Eulogio Mariano, Jose Jimenez, Jr., Toribio Ilao, Jr. and Ernesto
Salenga for violation of RA 3019. Petitioner charged private respondents of conspiracy through the
issuance of the TRO in allowing respondent Salenga to retain possession of the fishpond, operate it, harvest
the produce, and keep the sales under the safekeeping of other private respondents. Moreover, petitioner
maintains that respondent Ilao, Jr. had no jurisdiction to hear and act on DARAB Case No. 552-P’93 filed by
respondent Salenga as there was no tenancy relation between respondent Salenga and Rafael L. Lopez, and
thus, the complaint was dismissible on its face.

Through the December 14, 1994 Order,19 the Ombudsman required private respondents to file their
counter-affidavits, affidavits of their witnesses, and other controverting evidence. While the other
respondents submitted their counter-affidavits, respondent Ilao, Jr. instead filed his February 9, 1995
motion to dismiss, February 21, 1995 Reply, and March 24, 1995 Rejoinder.

Ombudsman’s Determination of Probable Cause

On May 10, 1996, the Ombudsman issued a Resolution20 finding cause to bring respondents to court,
denying the motion to dismiss of respondent Ilao, Jr., and recommending the filing of an Information for
violation of Section 3 (e) of RA 3019. Subsequently, respondent Ilao, Jr. filed his September 16, 1996 Motion
for Reconsideration and/or Re-investigation21 which was denied through the October 3, 1996
Order.22 Consequently, the March 17, 1997 Information23 was filed against all the private respondents
before the Sandiganbayan which was docketed as Criminal Case No. 23661.

Before the graft court, respondent Ilao, Jr. filed his May 19, 1997 Motion for Reconsideration and/or Re-
investigation which was granted through the August 29, 1997 Order.24 On September 8, 1997, respondent
Ilao, Jr. subsequently filed his Counter-Affidavit25 with attachments while petitioner did not file any reply-
affidavit despite notice to him. The OSP of the Ombudsman conducted the re-investigation; and the result
of the re-investigation was embodied in the assailed November 26, 1997 Order26 which recommended the
dismissal of the complaint in OMB-1-94-3425 against all private respondents. Upon review, the
Ombudsman approved the OSP’s recommendation on August 21, 1998.

Petitioner’s Motion for Reconsideration27 was likewise denied by the OSP through the October 30, 1998
Memorandum28 which was approved by the Ombudsman on November 27, 1998. Consequently, the trial
prosecutor moved orally before the Sandiganbayan for the dismissal of Criminal Case No. 23661 which was
granted through the December 11, 1998 Order.29

Thus, the instant petition is before us.

The Issues

Petitioner raises two assignments of errors, to wit:

THE HONORABLE OMBUDSMAN ERRED IN GIVING DUE COURSE A MISPLACED COUNTER-

AFFIDAVIT FILED AFTER THE TERMINATION OF THE PRELIMINARY INVESTIGATION AND/OR
THE CASE WAS ALREADY FILED BEFORE THE SANDIGANBAYAN.

ASSUMING OTHERWISE, THE HONORABLE OMBUDSMAN LIKEWISE ERRED IN REVERSING HIS

OWN RESOLUTION WHERE IT WAS RESOLVED THAT ACCUSED AS PROVINCIAL AGRARIAN
ADJUDICATOR HAS NO JURISDICTION OVER A COMPLAINT WHERE THERE EXIST [sic] NO
TENANCY RELATIONSHIP CONSIDERING [sic] COMPLAINANT IS NOT A TENANT BUT A "BANTE-
ENCARGADO" OR WATCHMAN-OVERSEER HIRED FOR A SALARY OF P3,000.00 PER MONTH AS
ALLEGED IN HIS OWN COMPLAINT.30

Before delving into the errors raised by petitioner, we first address the preliminary procedural issue of the
authority and locus standi of petitioner to pursue the instant petition.

Preliminary Issue: Legal Standing

Locus standi is defined as "a right of appearance in a court of justice x x x on a given question." 31 In private
suits, standing is governed by the "real-parties-in interest" rule found in Section 2, Rule 3 of the 1997 Rules
of Civil Procedure which 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." 32 Succinctly put, the
plaintiffs’ standing is based on their own right to the relief sought.

The records show that petitioner is a non-lawyer appearing for himself and conducting litigation in person.
Petitioner instituted the instant case before the Ombudsman in his own name. In so far as the Complaint-
Affidavit filed before the Office of the Ombudsman is concerned, there is no question on his authority and
legal standing. Indeed, the Office of the Ombudsman is mandated to "investigate and prosecute on its own
or on complaint by any person, any act or omission of any public officer or employee, office or agency, when
such act or omission appears to be illegal, unjust, improper or inefficient (emphasis supplied)." 33 The
Ombudsman can act on anonymous complaints and motu proprio inquire into alleged improper official acts
or omissions from whatever source, e.g., a newspaper.34Thus, any complainant may be entertained by the
Ombudsman for the latter to initiate an inquiry and investigation for alleged irregularities.

However, filing the petition in person before this Court is another matter. The Rules allow a non-lawyer to
conduct litigation in person and appear for oneself only when he is a party to a legal controversy. Section
34 of Rule 138 pertinently provides, thus:

SEC. 34. By whom litigation conducted. – In the court of a justice of the peace a party may conduct
his litigation in person, with the aid of an agent or friend appointed by him for that purpose, or
with the aid of an attorney. In any other court, a party may conduct his litigation personally or by
aid of an attorney, and his appearance must be either personal or by a duly authorized member
of the bar (emphases supplied).

Petitioner has no legal standing

Is petitioner a party or a real party in interest to have the locus standi to pursue the instant petition? We
answer in the negative.

While petitioner may be the complainant in OMB-1-94-3425, he is not a real party in interest. Section 2,
Rule 3 of the 1997 Rules of Civil Procedure stipulates, thus:

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.

The same concept is applied in criminal and administrative cases.

In the case at bar which involves a criminal proceeding stemming from a civil (agrarian) case, it is clear that
petitioner is not a real party in interest. Except being the complainant, the records show that petitioner is
a stranger to the agrarian case. It must be recalled that the undisputed owner of the fishpond is Paciencia
Regala, who intervened in DARAB Case No. 552-P’93 through her Attorney-in-Fact Faustino Mercado in
order to protect her interest. The motion for intervention filed by Faustino Mercado, as agent of Paciencia
Regala, was granted by respondent Provincial Adjudicator Ilao, Jr. through the November 15, 1993 Order
in DARAB Case No. 552-P’93.

Agency cannot be further delegated

Petitioner asserts that he is duly authorized by Faustino Mercado to institute the suit and presented a
Special Power of Attorney35 (SPA) from Faustino Mercado. However, such SPA is unavailing for petitioner.
For one, petitioner’s principal, Faustino Mercado, is an agent himself and as such cannot further delegate
his agency to another. Otherwise put, an agent cannot delegate to another the same agency. The legal
maxim potestas delegata non delegare potest; a power once delegated cannot be re-delegated, while applied
primarily in political law to the exercise of legislative power, is a principle of agency.36 For another, a re-
delegation of the agency would be detrimental to the principal as the second agent has no privity of contract
with the former. In the instant case, petitioner has no privity of contract with Paciencia Regala, owner of
the fishpond and principal of Faustino Mercado.

Moreover, while the Civil Code under Article 189237 allows the agent to appoint a substitute, such is not the
situation in the instant case. The SPA clearly delegates the agency to petitioner to pursue the case and not
merely as a substitute. Besides, it is clear in the aforecited Article that what is allowed is a substitute and
not a delegation of the agency.

Clearly, petitioner is neither a real party in interest with regard to the agrarian case, nor is he a real party
in interest in the criminal proceedings conducted by the Ombudsman as elevated to the Sandiganbayan. He
is not a party who will be benefited or injured by the results of both cases.

Petitioner: a stranger and not an injured private complainant

Petitioner only surfaced in November 1994 as complainant before the Ombudsman. Aside from that, not
being an agent of the parties in the agrarian case, he has no locus standi to pursue this petition. He cannot
be likened to an injured private complainant in a criminal complaint who has direct interest in the outcome
of the criminal case.

More so, we note that the petition is not pursued as a public suit with petitioner asserting a "public right"
in assailing an allegedly illegal official action, and doing so as a representative of the general public. He is
pursuing the instant case as an agent of an ineffective agency.

Petitioner has not shown entitlement to judicial protection

Even if we consider the instant petition as a public suit, where we may consider petitioner suing as a
"stranger," or in the category of a "citizen," or "taxpayer," still petitioner has not adequately shown that he
is entitled to seek judicial protection. In other words, petitioner has not made out a sufficient interest in the
vindication of the public order and the securing of relief as a "citizen" or "taxpayer"; more so when there is
no showing that he was injured by the dismissal of the criminal complaint before the Sandiganbayan.

Based on the foregoing discussion, petitioner indubitably does not have locus standi to pursue this action
and the instant petition must be forthwith dismissed on that score. Even granting arguendo that he
has locus standi, nonetheless, petitioner fails to show grave abuse of discretion of respondent Ombudsman
to warrant a reversal of the assailed November 26, 1997 Order and the October 30, 1998 Memorandum.
First Issue: Submission of Counter-Affidavit

The Sandiganbayan, not the Ombudsman, ordered re-investigation

On the substantive aspect, in the first assignment of error, petitioner imputes grave abuse of discretion on
public respondent Ombudsman for allowing respondent Ilao, Jr. to submit his Counter-Affidavit when the
preliminary investigation was already concluded and an Information filed with the Sandiganbayan which
assumed jurisdiction over the criminal case. This contention is utterly erroneous.

The facts clearly show that it was not the Ombudsman through the OSP who allowed respondent Ilao, Jr. to
submit his Counter-Affidavit. It was the Sandiganbayan who granted the prayed for re-investigation and
ordered the OSP to conduct the re-investigation through its August 29, 1997 Order, as follows:

Considering the manifestation of Prosecutor Cicero Jurado, Jr. that accused Toribio E. Ilao, Jr. was
not able to file his counter-affidavit in the preliminary investigation, there appears to be some basis
for granting the motion of said accused for reinvestigation.

WHEREFORE, accused Toribio E. Ilao, Jr. may file his counter-affidavit, with documentary evidence
attached, if any, with the Office of the Special Prosecutor within then (10) days from today.
The prosecution is ordered to conduct a reinvestigation within a period of thirty (30)
days.38 (Emphases supplied.)

As it is, public respondent Ombudsman through the OSP did not exercise any discretion in allowing
respondent Ilao, Jr. to submit his Counter-Affidavit. The OSP simply followed the graft court’s directive to
conduct the re-investigation after the Counter-Affidavit of respondent Ilao, Jr. was filed. Indeed, petitioner
did not contest nor question the August 29, 1997 Order of the graft court. Moreover, petitioner did not file
any reply-affidavit in the re-investigation despite notice.

Re-investigation upon sound discretion of graft court

Furthermore, neither can we fault the graft court in granting the prayed for re-investigation as it can readily
be seen from the antecedent facts that respondent Ilao, Jr. was not given the opportunity to file his Counter-
Affidavit. Respondent Ilao, Jr. filed a motion to dismiss with the Ombudsman but such was not resolved
before the Resolution—finding cause to bring respondents to trial—was issued. In fact, respondent Ilao,
Jr.’s motion to dismiss was resolved only through the May 10, 1996 Resolution which recommended the
filing of an Information. Respondent Ilao, Jr.’s Motion for Reconsideration and/or Re-investigation was
denied and the Information was filed with the graft court.

Verily, courts are given wide latitude to accord the accused ample opportunity to present controverting
evidence even before trial as demanded by due process. Thus, we held in Villaflor v. Vivar that "[a]
component part of due process in criminal justice, preliminary investigation is a statutory and substantive
right accorded to the accused before trial. To deny their claim to a preliminary investigation would be to
deprive them of the full measure of their right to due process."39

Second Issue: Agrarian Dispute

Anent the second assignment of error, petitioner contends that DARAB Case No. 552-P’93 is not an agrarian
dispute and therefore outside the jurisdiction of the DARAB. He maintains that respondent Salenga is not
an agricultural tenant but a mere watchman of the fishpond owned by Paciencia Regala. Moreover,
petitioner further argues that Rafael Lopez and Lourdes Lapid, the respondents in the DARAB case, are not
the owners of the fishpond.

Nature of the case determined by allegations in the complaint

This argument is likewise bereft of merit. Indeed, as aptly pointed out by respondents and as borne out by
the antecedent facts, respondent Ilao, Jr. could not have acted otherwise. It is a settled rule that jurisdiction
over the subject matter is determined by the allegations of the complaint.40 The nature of an action is
determined by the material averments in the complaint and the character of the relief sought,41 not by the
defenses asserted in the answer or motion to dismiss.42 Given that respondent Salenga’s complaint and its
attachment clearly spells out the jurisdictional allegations that he is an agricultural tenant in possession of
the fishpond and is about to be ejected from it, clearly, respondent Ilao, Jr. could not be faulted in assuming
jurisdiction as said allegations characterize an agricultural dispute. Besides, whatever defense asserted in
an answer or motion to dismiss is not to be considered in resolving the issue on jurisdiction as it cannot be
made dependent upon the allegations of the defendant.

Issuance of TRO upon the sound discretion of hearing officer

As regards the issuance of the TRO, considering the proper assumption of jurisdiction by respondent Ilao,
Jr., it can be readily culled from the antecedent facts that his issuance of the TRO was a proper exercise of
discretion. Firstly, the averments with evidence as to the existence of the need for the issuance of the
restraining order were manifest in respondent Salenga’s Motion to Maintain Status Quo and to Issue
Restraining Order,43 the attached Police Investigation Report,44 and Medical Certificate.45 Secondly, only
respondent Salenga attended the June 22, 1993 hearing despite notice to parties. Hence, Salenga’s motion
was not only unopposed but his evidence adduced ex-parte also adequately supported the issuance of the
restraining order.

Premises considered, respondent Ilao, Jr. has correctly assumed jurisdiction and properly exercised his
discretion in issuing the TRO—as respondent Ilao, Jr. aptly maintained that giving due course to the
complaint and issuing the TRO do not reflect the final determination of the merits of the case. Indeed, after
hearing the case, respondent Ilao, Jr. rendered a Decision on May 29, 1995 dismissing DARAB Case No. 552-
P’93 for lack of merit.

Court will not review prosecutor’s determination of probable cause

Finally, we will not delve into the merits of the Ombudsman’s reversal of its initial finding of probable cause
or cause to bring respondents to trial. Firstly, petitioner has not shown that the Ombudsman committed
grave abuse of discretion in rendering such reversal. Secondly, it is clear from the records that the initial
finding embodied in the May 10, 1996 Resolution was arrived at before the filing of respondent Ilao, Jr.’s
Counter-Affidavit. Thirdly, it is the responsibility of the public prosecutor, in this case the Ombudsman, to
uphold the law, to prosecute the guilty, and to protect the innocent. Lastly, the function of determining the
existence of probable cause is proper for the Ombudsman in this case and we will not tread on the realm of
this executive function to examine and assess evidence supplied by the parties, which is supposed to be
exercised at the start of criminal proceedings. In Perez v. Hagonoy Rural Bank, Inc.,46 as cited in Longos Rural
Waterworks and Sanitation Association, Inc. v. Hon. Desierto,47 we had occasion to rule that we cannot pass
upon the sufficiency or insufficiency of evidence to determine the existence of probable cause.48

WHEREFORE, the instant petition is DENIED for lack of merit, and the November 26, 1997 Order and the
October 30, 1998 Memorandum of the Office of the Special Prosecutor in Criminal Case No. 23661 (OMB-
1-94-3425) are hereby AFFIRMED IN TOTO, with costs against petitioner.

SO ORDERED.

Quisumbing, J., Chairperson, Carpio, Carpio Morales, and Tinga, JJ., concur.
G.R. No. 175910 July 30, 2009

ATTY. ROGELIO E. SARSABA, Petitioner,

vs.
FE VDA. DE TE, represented by her Attorney-in-Fact, FAUSTINO CASTAÑEDA, Respondents.

DECISION

DEL CASTILLO, J.:

Before us is a petition for review on certiorari1 with prayer for preliminary injunction assailing the
Order2 dated March 22, 2006 of the Regional Trial Court (RTC), Branch 19, Digos City, Davao del Sur, in
Civil Case No. 3488.

The facts, as culled from the records, follow.

On February 14, 1995, a Decision was rendered in NLRC Case No. RAB-11-07-00608-93 entitled, Patricio
Sereno v. Teodoro Gasing/Truck Operator, finding Sereno to have been illegally dismissed and ordering
Gasing to pay him his monetary claims in the amount of ₱43,606.47. After the Writ of Execution was
returned unsatisfied, Labor Arbiter Newton R. Sancho issued an Alias Writ of Execution3 on June 10, 1996,
directing Fulgencio R. Lavarez, Sheriff II of the National Labor Relations Commission (NLRC), to satisfy the
judgment award. On July 23, 1996, Lavarez, accompanied by Sereno and his counsel, petitioner Atty.
Rogelio E. Sarsaba, levied a Fuso Truck bearing License Plate No. LBR-514, which at that time was in the
possession of Gasing. On July 30, 1996, the truck was sold at public auction, with Sereno appearing as the
highest bidder.4

Meanwhile, respondent Fe Vda. de Te, represented by her attorney-in-fact, Faustino Castañeda, filed with
the RTC, Branch 18, Digos, Davao del Sur, a Complaint5 for recovery of motor vehicle, damages with prayer
for the delivery of the truck pendente lite against petitioner, Sereno, Lavarez and the NLRC of Davao City,
docketed as Civil Case No. 3488.

Respondent alleged that: (1) she is the wife of the late Pedro Te, the registered owner of the truck, as
evidenced by the Official Receipt6 and Certificate of Registration;7 (2) Gasing merely rented the truck from
her; (3) Lavarez erroneously assumed that Gasing owned the truck because he was, at the time of the
"taking,"8 in possession of the same; and (4) since neither she nor her husband were parties to the labor
case between Sereno and Gasing, she should not be made to answer for the judgment award, much less be
deprived of the truck as a consequence of the levy in execution.

Petitioner filed a Motion to Dismiss9 on the following grounds: (1) respondent has no legal personality to
sue, having no real interests over the property subject of the instant complaint; (2) the allegations in the
complaint do not sufficiently state that the respondent has cause of action; (3) the allegations in the
complaint do not contain sufficient cause of action as against him; and (4) the complaint is not accompanied
by an Affidavit of Merit and Bond that would entitle the respondent to the delivery of the tuck pendente
lite.

The NLRC also filed a Motion to Dismiss10 on the grounds of lack of jurisdiction and lack of cause of action.

Meanwhile, Lavarez filed an Answer with Compulsory Counterclaim and Third-Party Complaint.11 By way
of special and affirmative defenses, he asserted that the RTC does not have jurisdiction over the subject
matter and that the complaint does not state a cause of action.

On January 21, 2000, the RTC issued an Order12 denying petitioner's Motion to Dismiss for lack of merit.

In his Answer,13 petitioner denied the material allegations in the complaint. Specifically, he cited as
affirmative defenses that: respondent had no legal personality to sue, as she had no interest over the motor
vehicle; that there was no showing that the heirs have filed an intestate estate proceedings of the estate of
Pedro Te, or that respondent was duly authorized by her co-heirs to file the case; and that the truck was
already sold to Gasing on March 11, 1986 by one Jesus Matias, who bought the same from the Spouses Te.
Corollarily, Gasing was already the lawful owner of the truck when it was levied on execution and, later on,
sold at public auction.

Incidentally, Lavarez filed a Motion for Inhibition,14 which was opposed15 by respondent.

On October 13, 2000, RTC Branch 18 issued an Order16 of inhibition and directed the transfer of the records
to Branch 19. RTC Branch 19, however, returned the records back to Branch 18 in view of the appointment
of a new judge in place of Judge-designate Rodolfo A. Escovilla. Yet, Branch 19 issued another Order17 dated
November 22, 2000 retaining the case in said branch.

Eventually, the RTC issued an Order18 dated May 19, 2003 denying the separate motions to dismiss filed by
the NLRC and Lavarez, and setting the Pre-Trial Conference on July 25, 2003.

On October 17, 2005, petitioner filed an Omnibus Motion to Dismiss the Case on the following
grounds:19 (1) lack of jurisdiction over one of the principal defendants; and (2) to discharge respondent's
attorney-in-fact for lack of legal personality to sue.

It appeared that the respondent, Fe Vda. de Te, died on April 12, 2005.20

Respondent, through her lawyer, Atty. William G. Carpentero, filed an Opposition, 21 contending that the
failure to serve summons upon Sereno is not a ground for dismissing the complaint, because the other
defendants have already submitted their respective responsive pleadings. He also contended that the
defendants, including herein petitioner, had previously filed separate motions to dismiss the complaint,
which the RTC denied for lack of merit. Moreover, respondent's death did not render functus officio her
right to sue since her attorney-in-fact, Faustino Castañeda, had long testified on the complaint on March 13,
1998 for and on her behalf and, accordingly, submitted documentary exhibits in support of the complaint.

On March 22, 2006, the RTC issued the assailed Order22 denying petitioner's aforesaid motion.

Petitioner then filed a Motion for Reconsideration with Motion for Inhibition, 23 in which he claimed that
the judge who issued the Order was biased and partial. He went on to state that the judge's husband was
the defendant in a petition for judicial recognition of which he was the counsel, docketed as Civil Case No.
C-XXI-100, before the RTC, Branch 21, Bansalan, Davao del Sur. Thus, propriety dictates that the judge
should inhibit herself from the case.

Acting on the motion for inhibition, Judge Carmelita Sarno-Davin granted the same24 and ordered that the
case be re-raffled to Branch 18. Eventually, the said RTC issued an Order 25 on October 16, 2006 denying
petitioner's motion for reconsideration for lack of merit.

Hence, petitioner directly sought recourse from the Court via the present petition involving pure questions
of law, which he claimed were resolved by the RTC contrary to law, rules and existing jurisprudence.26

There is a "question of law" when the doubt or difference arises as to what the law is on certain state of
facts, and which does not call for an examination of the probative value of the evidence presented by the
parties-litigants. 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. Simply put, 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.27

Verily, the issues raised by herein petitioner are "questions of law," as their resolution rest solely on what
the law provides given the set of circumstances availing. The first issue involves the jurisdiction of the court
over the person of one of the defendants, who was not served with summons on account of his death. The
second issue, on the other hand, pertains to the legal effect of death of the plaintiff during the pendency of
the case.

At first brush, it may appear that since pure questions of law were raised, petitioner's resort to this Court
was justified and the resolution of the aforementioned issues will necessarily follow. However, a perusal of
the petition requires that certain procedural issues must initially be resolved before We delve into the
merits of the case.

Notably, the petition was filed directly from the RTC which issued the Order in the exercise of its original
jurisdiction. The question before Us then is: whether or not petitioner correctly availed of the mode of
appeal under Rule 45 of the Rules of Court.

Significantly, the rule on appeals is outlined below, to wit:28

(1) In all cases decided by the RTC in the exercise of its original jurisdiction, appeal may be
made to the Court of Appeals by mere notice of appeal where the appellant raises questions of fact
or mixed questions of fact and law;

(2) In all cases decided by the RTC in the exercise of its original jurisdiction where the
appellant raises only questions of law, the appeal must be taken to the Supreme Court on a
petition for review on certiorariunder Rule 45.

(3) All appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction,
regardless of whether the appellant raises questions of fact, questions of law, or mixed questions
of fact and law, shall be brought to the Court of Appeals by filing a petition for review under Rule
42.

Accordingly, an appeal may be taken from the RTC which exercised its original jurisdiction, before the Court
of Appeals or directly before this Court, provided that the subject of the same is a judgment or final
order that completely disposes of the case, or of a particular matter therein when declared by the Rules to
be appealable.29The first mode of appeal, to be filed before the Court of Appeals, pertains to a writ of error
under Section 2(a), Rule 41 of the Rules of Court, if questions of fact or questions of fact and law are raised
or involved. On the other hand, the second mode is by way of an appeal by certiorari before the Supreme
Court under Section 2(c), Rule 41, in relation to Rule 45, where only questions of law are raised or
involved.30

An order or judgment of the RTC is deemed final when it finally disposes of a pending action, so that
nothing more can be done with it in the trial court. In other words, the order or judgment ends the litigation
in the lower court.31 On the other hand, an order which does not dispose of the case completely and
indicates that other things remain to be done by the court as regards the merits,
is interlocutory. Interlocutory refers to something between the commencement and the end of the suit
which decides some point or matter, but is not a final decision on the whole controversy. 32

The subject of the present petition is an Order of the RTC, which denied petitioner's Omnibus Motion to
Dismiss, for lack of merit.

We have said time and again that an order denying a motion to dismiss is interlocutory. 33 Under Section
1(c), Rule 41 of the Rules of Court, an interlocutory order is not appealable. As a remedy for the denial, a
party has to file an answer and interpose as a defense the objections raised in the motion, and then to
proceed to trial; or, a party may immediately avail of the remedy available to the aggrieved party by filing
an appropriate special civil action for certiorari under Rule 65 of the Revised Rules of Court. Let it be
stressed though that a petition for certiorari is appropriate only when an order has been issued without or
in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction.

Based on the foregoing, the Order of the RTC denying petitioner's Omnibus Motion to Dismiss is not
appealable even on pure questions of law. It is worth mentioning that the proper procedure in this case, as
enunciated by this Court, is to cite such interlocutory order as an error in the appeal of the case -- in the
event that the RTC rules in favor of respondent -- and not to appeal such interlocutory order. On the other
hand, if the petition is to be treated as a petition for review under Rule 45, it would likewise fail because
the proper subject would only be judgments or final orders that completely dispose of the case. 34
Not being a proper subject of an appeal, the Order of the RTC is considered interlocutory. Petitioner should
have proceeded with the trial of the case and, should the RTC eventually render an unfavorable verdict,
petitioner should assail the said Order as part of an appeal that may be taken from the final judgment to be
rendered in this case. Such rule is founded on considerations of orderly procedure, to forestall useless
appeals and avoid

undue inconvenience to the appealing party by having to assail orders as they are promulgated by the court,
when all such orders may be contested in a single appeal.

In one case,35 the Court adverted to the hazards of interlocutory appeals:

It is axiomatic that an interlocutory order cannot be challenged by an appeal. Thus, it has been held that
"the proper remedy in such cases is an ordinary appeal from an adverse judgment on the merits,
incorporating in said appeal the grounds for assailing the interlocutory order. Allowing appeals from
interlocutory orders would result in the `sorry spectacle’ of a case being subject of a counterproductive
ping-pong to and from the appellate court as often as a trial court is perceived to have made an error in any
of its interlocutory rulings. x x x.

Another recognized reason of the law in permitting appeal only from a final order or judgment, and not
from an interlocutory or incidental one, is to avoid multiplicity of appeals in a single action, which must
necessarily suspend the hearing and decision on the merits of the case during the pendency of the appeal.
If such appeal were allowed, trial on the merits of the case would necessarily be delayed for a considerable
length of time and compel the adverse party to incur unnecessary expenses, for one of the parties may
interpose as many appeals as incidental questions may be raised by him, and interlocutory orders rendered
or issued by the lower court.36

And, even if We treat the petition to have been filed under Rule 65, the same is still dismissible for violating
the principle on hierarchy of courts. Generally, a direct resort to us in a petition for certiorari is highly
improper, for it violates the established policy of strict observance of the judicial hierarchy of courts. 37 This
principle, as a rule, requires that recourse must first be made to the lower-ranked court exercising
concurrent jurisdiction with a higher court. However, the judicial hierarchy of courts is not an iron-clad
rule. A strict application of the rule is not necessary when cases brought before the appellate courts do not
involve factual but legal questions.38

In the present case, petitioner submits pure questions of law involving the effect of non-service of summons
following the death of the person to whom it should be served, and the effect of the death of the complainant
during the pendency of the case. We deem it best to rule on these issues, not only for the benefit of the
bench and bar, but in order to prevent further delay in the trial of the case. Resultantly, our relaxation of
the policy of strict observance of the judicial hierarchy of courts is warranted.

Anent the first issue, petitioner argues that, since Sereno died before summons was served on him, the RTC
should have dismissed the complaint against all the defendants and that the same should be filed against
his estate.

The Sheriff's Return of Service39 dated May 19, 1997 states that Sereno could not be served with copy of
the summons, together with a copy of the complaint, because he was already dead.

In view of Sereno's death, petitioner asks that the complaint should be dismissed, not only against Sereno,
but as to all the defendants, considering that the RTC did not acquire jurisdiction over the person of
Sereno.1avvph!1

Jurisdiction over a party is acquired by service of summons by the sheriff, his deputy or other proper court
officer, either personally by handing a copy thereof to the defendant or by substituted service. 40 On the
other

hand, summons is a writ by which the defendant is notified of the action brought against him. Service of
such writ is the means by which the court may acquire jurisdiction over his person. 41
Records show that petitioner had filed a Motion to Dismiss on the grounds of lack of legal personality of
respondent; the allegations in the complaint did not sufficiently state that respondent has a cause of action
or a cause of action against the defendants; and, the complaint was not accompanied by an affidavit of merit
and bond. The RTC denied the motion and held therein that, on the basis of the allegations of fact in the
complaint, it can render a valid judgment. Petitioner, subsequently, filed his answer by denying all the
material allegations of the complaint. And by way of special and affirmative defenses, he reiterated that
respondent had no legal personality to sue as she had no real interest over the property and that while the
truck was still registered in Pedro Te's name, the same was already sold to Gasing.

Significantly, a motion to dismiss may be filed within the time for but before the filing of an answer to the
complaint or pleading asserting a claim.42 Among the grounds mentioned is the court's lack of jurisdiction
over the person of the defending party.

As a rule, all defenses and objections not pleaded, either in a motion to dismiss or in an answer, are deemed
waived.43 The exceptions to this rule are: (1) when the court has no jurisdiction over the subject matter, (2)
when there is another action pending between the parties for the same cause, or (3) when the action is
barred by prior judgment or by statute of limitations, in which cases, the court may dismiss the claim.

In the case before Us, petitioner raises the issue of lack of jurisdiction over the person of Sereno, not in his
Motion to Dismiss or in his Answer but only in his Omnibus Motion to Dismiss. Having failed to invoke this
ground at the proper time, that is, in a motion to dismiss, petitioner cannot raise it now for the first time on
appeal.

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

We agree with the RTC in its Order when it resolved the issue in this wise:

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

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

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

Anent the second issue, petitioner moves that respondent's attorney-in-fact, Faustino Castañeda, be
discharged as he has no more legal personality to sue on behalf of Fe Vda. de Te, who passed away on April
12, 2005, during the pendency of the case before the RTC.

When a party to a pending action dies and the claim is not extinguished, the Rules of Court require a
substitution of the deceased.44 Section 1, Rule 87 of the Rules of Court enumerates the actions that survived
and may be filed against the decedent's representatives as follows: (1) actions to recover real or personal
property or an interest thereon, (2) actions to enforce liens thereon, and (3) actions to recover damages
for an injury to a person or a property. In such cases, a counsel is obliged to inform the court of the death
of his client and give the name and address of the latter's legal representative. 45

The rule on substitution of parties is governed by Section 16,46 Rule 3 of the 1997 Rules of Civil Procedure,
as amended.

Strictly speaking, the rule on substitution by heirs is not a matter of jurisdiction, but a requirement of due
process. The rule on substitution was crafted to protect every party's right to due process. It was designed
to ensure that the deceased party would continue to be properly represented in the suit through his heirs
or the duly appointed legal representative of his estate. Moreover, non-compliance with the Rules results
in the denial of the right to due process for the heirs who, though not duly notified of the proceedings, would
be substantially affected by the decision rendered therein. Thus, it is only when there is a denial of due
process, as when the deceased is not represented by any legal representative or heir, that the court nullifies
the trial proceedings and the resulting judgment therein.47

In the case before Us, it appears that respondent's counsel did not make any manifestation before the RTC
as to her death. In fact, he had actively participated in the proceedings. Neither had he shown any proof
that he had been retained by respondent's legal representative or any one who succeeded her.

However, such failure of counsel would not lead Us to invalidate the proceedings that have long taken place
before the RTC. The Court has repeatedly declared that failure of the counsel to comply with his duty to
inform the court of the death of his client, such that no substitution is effected, will not invalidate the
proceedings and the judgment rendered thereon if the action survives the death of such party. The trial
court's jurisdiction over the case subsists despite the death of the party.48

The purpose behind this rule is the protection of the right to due process of every party to the litigation
who may be affected by the intervening death. The deceased litigants are themselves protected as they
continue to be properly represented in the suit through the duly appointed legal representative of their
estate.49

Anent the claim of petitioner that the special power of attorney 50 dated March 4, 1997 executed by
respondent in favor of Faustino has become functus officio and that the agency constituted between them
has been extinguished upon the death of respondent, corollarily, he had no more personality to appear and
prosecute the case on her behalf.

Agency is extinguished by the death of the principal.51 The only exception where the agency shall remain
in full force and effect even after the death of the principal is when if it has been constituted in the common
interest of the latter and of the agent, or in the interest of a third person who has accepted the stipulation
in his favor.52

A perusal of the special power of attorney leads us to conclude that it was constituted for the benefit solely
of the principal or for respondent Fe Vda. de Te. Nowhere can we infer from the stipulations therein that it
was created for the common interest of respondent and her attorney-in-fact. Neither was there any
mention that it was to benefit a third person who has accepted the stipulation in his favor.

On this ground, We agree with petitioner. However, We do not believe that such ground would cause the
dismissal of the complaint. For as We have said, Civil Case No. 3488, which is an action for the recovery of
a personal property, a motor vehicle, is an action that survives pursuant to Section 1, Rule 87 of the Rules
of Court. As such, it is not extinguished by the death of a party.

In Gonzalez v. Philippine Amusement and Gaming Corporation,53 We have laid down the criteria for
determining whether an action survives the death of a plaintiff or petitioner, to wit:

x x x The question as to whether an action survives or not depends on the nature of the action and the
damage sued for. If the causes of action which survive the wrong complained [of] affects primarily and
principally property and property rights, the injuries to the person being merely incidental, while in the
causes of action which do not survive the injury complained of is to the person the property and rights of
property affected being incidental. x x x

Thus, the RTC aptly resolved the second issue with the following ratiocination:

While it may be true as alleged by defendants that with the death of Plaintiff, Fe Vda. de Te, the Special
Power of Attorney she executed empowering the Attorney-in-fact, Faustino Castañeda to sue in her behalf
has been rendered functus officio, however, this Court believes that the Attorney-in-fact had not lost his
personality to prosecute this case.

It bears stressing that when this case was initiated/filed by the Attorney-in-fact, the plaintiff was still very
much alive.

Records reveal that the Attorney-in-fact has testified long before in behalf of the said plaintiff and more
particularly during the state when the plaintiff was vehemently opposing the dismissal of the complainant.
Subsequently thereto, he even offered documentary evidence in support of the complaint, and this court
admitted the same. When this case was initiated, jurisdiction was vested upon this Court to try and hear
the same to the end. Well-settled is the rule to the point of being elementary that once jurisdiction is
acquired by this Court, it attaches until the case is decided.

Thus, the proper remedy here is the Substitution of Heirs and not the dismissal of this case which would
work injustice to the plaintiff.

SEC. 16, RULE 3 provides for the substitution of the plaintiff who dies pending hearing of the case by
his/her legal heirs. As to whether or not the heirs will still continue to engage the services of the Attorney-
in-fact is another matter, which lies within the sole discretion of the heirs.

In fine, We hold that the petition should be denied as the RTC Order is interlocutory; hence, not a proper
subject of an appeal before the Court. In the same breath, We also hold that, if the petition is to be treated
as a petition for certiorari as a relaxation of the judicial hierarchy of courts, the same is also dismissible for
being substantially insufficient to warrant the Court the nullification of the Order of the RTC.

Let this be an occasion for Us to reiterate that the rules are there to aid litigants in prosecuting or defending
their cases before the courts. However, these very rules should not be abused so as to advance one's
personal purposes, to the detriment of orderly administration of justice. We can surmise from the present
case herein petitioner's manipulation in order to circumvent the rule on modes of appeal and the hierarchy
of courts so that the issues presented herein could be settled without going through the established
procedures. In Vergara, Sr. v. Suelto,54 We stressed that this should be the constant policy that must be
observed strictly by the courts and lawyers, thus:

x x x. 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. It cannot and should not be
burdened with the task of dealing with causes in the first instance. Its original jurisdiction to issue the so-
called extraordinary writs should be exercised only where absolutely necessary or where serious and
important reasons exist therefor. Hence, that jurisdiction should generally be exercised relative to actions
or proceedings before the Court of Appeals, or before constitutional or other tribunals, bodies or agencies
whose acts for some reason or another are not controllable by the Court of Appeals. Where the issuance of
an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it is
in either of these courts that the specific action for the writ’s procurement must be presented. This is and
should continue to be the policy in this regard, a policy that courts and lawyers must strictly observe. 55

WHEREFORE, premises considered, the Petition is DENIED. The Order dated March 22, 2006 of the
Regional Trial Court, Branch 19, Digos, Davao del Sur in Civil Case No. 3488, is hereby AFFIRMED. Costs
against the petitioner.

SO ORDERED.