1
G.R. No. 173128 February 15, 2012
MARITIMEINDUSTRY AUTHORITY (MARINA) and/or ATTY. OSCAR
M. SEVILLA, Petitioners,
vs.
MARC PROPERTIES CORPORATION, Respondent.
DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari under Rule 45 which
seeks to reverse the Decision1 dated June 2, 2006 of the Court of
Appeals (CA) in CA-G.R. CV No. 80967. The CA dismissed petitioners’
appeal questioning the summary judgment rendered by the trial court
which ordered petitioner to reimburse the expenses incurred by the
respondent for repair/renovation works on its building.
The factual antecedents:
On October 23, 2001, petitioner Maritime Industry Authority (MARINA),
a government agency represented by then Administrator and
concurrently Vice-Chairman of the Board of Directors Oscar M. Sevilla,
entered into a Contract of Lease2 with respondent Marc Properties
Corporation represented by its Executive Vice-President Ericson M.
Marquez. It was agreed that the MARINA offices will be transferred
from PPL Building, Taft Avenue, Manila to an eight-storey commercial
building (MARC Building) and Condominium Unit 5 of MARC 2000
Tower which are both owned by respondent. The parties fixed the
monthly rental at ₱1,263,607.74 (plus VAT) from January 1, 2002 up to
December 31, 2002 and renewable for the same one-year period. The
Contract of Lease also contained the following provisions:
Article II
xxxx
Section 2.01 - The LESSEE, at its own expense, shall have the right
and authority to alter, renovate and introduce in the leased premises
such improvement as it may deem appropriate to render the place
suitable for the purpose intended by the LESSEE, provided, that such
alteration, renovation and construction of additional improvement will
not cause any damage to the buildings and such improvements shall
be in accordance with the LESSOR’s House Rules & Regulations. The
renovation of existing electrical, sanitary/plumbing works, sprinkler
systems, mechanical works, exhaust and ventilation systems, doors,
will be referred to the Administration Office of the LESSOR and will be
done only by the original contractors of the system and cost will be for
the account of the LESSEE. Alternatively, the LESSEE may be allowed
to use its own contractor but subject to close supervision and approval
of all works done by the original contractors of the system and/or the
Building Administration. This is to safeguard the original design intent
of the Buildings.
Article IX
Section 9.00 - The LESSEE may pre-terminate the term of this
Contract of Lease by notifying the LESSOR in writing at least ninety
(90) days prior to LESSEE’S vacating the premises, provided further
that the LESSEE shall pay to the LESSOR a penalty equivalent to two
(2) months rental.
Article XI
xxxx
Section 11.13 - This Contract of Lease is subject to the approval of the
Board of Directors of the Maritime Industry Authority and the Office of
the President and shall become binding on both parties only after its
approval by the above-mentioned government offices. The LESSEE
shall provide the LESSOR the written approval of both offices.3
On December 14, 2001, respondent received a letter from
Administrator Sevilla requesting for rescission of their Contract of
Lease for the reason that the MARINA Board of Directors during its
158th Regular Meeting resolved to deny the proposed transfer of the
MARINA office from its present address to respondent’s building. 4 In its
letter-reply dated December 17, 2001, respondent expressed
disappointment and enumerated those facts and circumstances for
which respondent believes that the Board’s decision was
unreasonable. Respondent asserted that if the Board will not
reconsider its decision, MARINA must take responsibility for the cost
already incurred by respondent as damages and lost rental
opportunity. Thus, respondent said it can only accept the request for
rescission upon reimbursement of ₱1,055,000.00 representing the
amount advanced by respondent and paid to its Contractors and
payment of penalty equivalent to 2 months rental or ₱2,527,215.48 in
accordance with Art. IX, Sec. 9.00 of the Contract of Lease. With no
immediate response from petitioners, respondent again wrote
Administrator Sevilla reiterating its position on the matter.5
In their letter-reply dated January 23, 2002, petitioners asserted that
MARINA is not liable to pay the penalty considering that the Contract of
Lease clearly provides that it is subject to the approval of the Board
and the Office of the President (OP) to become binding on the parties.
As to the actual amount expended for "carpentry and electrical works"
done on the building, petitioners requested to "be furnished with copies
of the official receipts" so that it may be "properly guided in the
disposition thereof." In compliance, respondent furnished petitioners
with copies of the letter and accomplishment reports/official receipts
submitted by its contractors. Respondent’s counsel faulted
Administrator Sevilla for not submitting the Contract of Lease to the
Board of Directors notwithstanding the fact that respondent had filed a
motion for reconsideration of the Board’s decision, a clear breach of
petitioners’ contractual obligation which entitles respondent to the
penalty and damages sought. Petitioners asserted that MARINA is not
liable for penalty and damages since the Contract of Lease was not
perfected; however, Administrator Sevilla reiterated MARINA’s
commitment "to pay actual expenses incurred for the works done on
the premises based on [MARINA’s] request." Petitioners likewise
furnished respondent with copies of the Agenda of the 160th Regular
Meeting of the MARINA Board of Directors held on June 28, 2002 and
Secretary’s Certificate dated July 1, 2002 stating the resolution of the
MARINA Board not to approve/ratify the Contract of Lease.6
On July 10, 2002, respondent instituted Civil Case No. 02-104015 in
the Regional Trial Court of Manila (Branch 42) against petitioners
MARINA and/or Atty. Oscar M. Sevilla. The Complaint alleged the
following:
xxxx
2. In or about the first week of August 2001 the herein [defendant] Atty.
Oscar M. Sevilla, as MARINA Administrator, represented to Mr.
Ericson M. Marquez, Executive Vice-President of herein [plaintiff]
MARC, that the MARINA has decided to terminate its lease on the 4th,
5th and 6th floors of the PPL Building and to transfer said principal
office to a new location; to this end, he negotiated for the lease to
MARINA of the entire 8-storey Marc Building, located at 1971 Taft
Avenue, Malate, Manila, and Unit #5 of the adjacent Marc 2000 Tower,
both of which belong to herein plaintiff MARC.
3. After about three (3) months of negotiations and after the terms and
conditions of the lease of said properties of herein plaintiff were ironed
out with the understanding that these were with the prior knowledge
and consent of the MARINA, a Contract of Lease on said 8-storey
MARC Building and Unit #5 of the Marc 2000 Tower was executed and
signed x x x.
3.a. As a corollary to said contract, herein defendant Atty. Oscar M.
Sevilla wrote a letter, dated October 30, 2001, addressed to Mr. Emilio
C. Yap, informing the latter that "Pursuant to Section 4 of the Contract
of Lease for the Fourth, Fifth and Sixth floors of the PPL Bldg., which
floors we are presently occupying, we regret to inform you that
MARINA is not renewing said Lease Contract beginning January 2002.
4. To prepare for the occupancy on January 1, 2002 of the leased
properties, herein defendants requested that alterations/renovations be
made on plaintiff’s MARC Building for the account and at the expense
of the MARINA, in accordance with plans prepared and provided by
Mr. Roberto C. Arceo, Administrative and Finance Director of MARINA;
and, pursuant to said request alterations/renovations started on
December 5, 2001 and was done by the lowest bidders, JTV
Construction Group, Inc., for civil works/renovations, and NCC
Communication Networks, for wiring and cable installation, for which
MARC advanced/paid the sum of P1,555,170.40.
5. The said Contract of Lease of the MARINA with MARC stipulated in
Sec. 11.13 of Article XI thereof that said contract "is subject to the
approval of the Board of Directors of the MARINA and the Office of the
President of the Philippines and shall become binding on both parties
after its approval by the afore-mentioned government offices", which
stipulation, therefore, carries with it the obligation on the part of the
MARINA Administrator, Atty. Oscar M. Sevilla, to submit the said
contract to the said Board for approval or disapproval; however, in
breach of said stipulation, he did not do so.
5.a. On the contrary, in a letter addressed to Mr. Ericson Marquez,
dated December 14, 2001, the MARINA Administrator, Atty. Oscar M.
Sevilla, requested the rescission of the said Contract of Lease and, as
justification, he falsely asserted, that "during yesterday’s 158th Regular
Meeting of the MARINA Board held at the MARINA Conference Room,
the Board resolved to DENY the proposed transfer of the MARINA
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from its present address to your owned building," when in truth and in
fact, neither the said transfer nor the said Contract of Lease was
included in the agenda or taken up during the said 158th Regular
Meeting held on December 13, 2001.
5.b. Neither was said Contract of Lease taken up in said Board’s next
regular meeting held on February 21, 2002 notwithstanding the fact
that MARC filed a Motion for Reconsideration, dated February 14,
2002, which provided the MARINA Administrator with another
opportunity to submit the said contract to the MARINA Board for its
consideration; yet, he again did not do so.
6. The breach on the part of the defendants of the stipulation clearly
provided in the said Contract of Lease, alleged in paragraph 5 hereof,
resulted in damages to the plaintiff which may be compensated with
the sum of P2,527,215.48 equivalent to two (2) months rental, - the
measure of damages provided for in said contract.
x x x x7 (Italics supplied.)
Petitioners through the Solicitor General filed their Answer8 specifically
denying the foregoing allegations. Petitioners argued that respondent’s
demand for ₱2,527,215.48 is based solely on Art. V, Sec. 5.0 of the
Contract of Lease, which provision presupposes the approval of the
contract which is subject to the suspensive condition provided in Art.
XI, Sec. 11.13. Petitioners contended that by claiming that there was
no reason to reject the Contract of Lease considering the "clear
advantages" of approving the same, respondent is effectively imposing
its judgment on the Board of Directors and the OP; this simply cannot
be done. Petitioners pointed out that the approval or rejection of the
contract is a prerogative lodged solely on the said authorities and
respondent is devoid of any authority to question the wisdom of the
Board’s rejection of the contract as obviously there were other
considerations -- to which respondent is not privy -- factored in by the
Board in its decision. Lastly, petitioners asserted that this being a suit
against the State, it must be dismissed outright as there was no
allegation in the complaint that the State had given its consent to be
sued in this case.
Respondent filed a motion for summary judgment in its favor
contending that there is no genuine issue in this case as to any
material fact even as to the amount of damages. Petitioners filed their
opposition alleging the existence of genuine factual issues which can
only be resolved in a full-blown trial on the merits.
On March 5, 2003, the trial court issued an Order9 granting in part the
motion for summary judgment. Citing petitioners’ admission in the
Answer that Administrator Sevilla, "as an act of good faith", offered in
behalf of MARINA to shoulder the actual expenses incurred for the
works done on the premises based on their request, as well as the
other proofs/official receipts submitted by respondent and the January
23, 2002, May 13, 2002 and July 1, 2002 letters of Administrator
Sevilla who promised or at least gave the impression that respondent
will be reimbursed by MARINA of the amount of ₱1,555,170.40, the
trial court ruled that summary judgment for the said claim is proper.
Accordingly, the trial court ordered:
WHEREFORE, in view of all the foregoing, the motion for summary
judgment is partly granted. The defendants are directed to jointly and
severally pay the plaintiff the sum of P1,555,170.40 as reimbursement
of the expenses it incurred in the repairs/renovations of the MARC
Building with legal interest from the filing (July 10, 2002) of the
complaint. In so far as the other claims of plaintiff, the motion for
summary judgment is denied.
SO ORDERED.10
Respondent then moved to set the case for pre-trial, which was
granted. Meanwhile, petitioners filed a motion for reconsideration11 of
the March 5, 2003 Order arguing that while admittedly they had offered
to pay the respondent reimbursement for the alterations/renovations
made on its building as shown by the afore-mentioned letters of
Administrator Sevilla, petitioners did not admit that such
alterations/renovations which respondent claims to have been
prosecuted on the MARC Building were actually made thereon and that
such changes were in fact in accordance with the plans prepared and
provided for by MARINA. Petitioners stressed that these factual
matters are still to be determined which can only be done through a
full-blown trial; the reimbursable amount being also subject to
verification since petitioners have not yet been given the opportunity to
independently confirm such amount. Further, it was contended that
respondent’s submission of accomplishment reports on the
alterations/renovation works it claims to have been done and the
amount it allegedly expended do not automatically establish petitioners’
liability for the same. Petitioners subsequently requested that the
scheduled pre-trial be cancelled pending resolution of their motion for
reconsideration of the March 5, 2003 Order.12
In its Order13 dated June 30, 2003, the trial court denied petitioners’
motion for reconsideration, as follows:
As correctly observed by the plaintiff the answer raises issues which
are sham or not genuine. In their answer[,] defendants did not
specifically allege what were not done in plaintiff’s MARC Building or
what were done therein which were not in accordance with the plan.
Neither did defendants specifically alleged in their answer what amount
covered by the receipts of the contractors is not reimbursable.
xxxx
The defendants opted not to file opposing or counter affidavits. Thus,
there is no proof what works were done in the MARC Building which
was not in accordance with the plan submitted by MARINA. Neither is
there proof that the amounts covered by the receipts of the contracts
include amounts which were not for works done in said MARC
Building.
Anent the alleged lack of opportunity for defendants to confirm the
amount demanded by the plaintiff. From May 31, 2002 when
defendants received copies of the receipts issued by the contractors up
to the time they filed their Answer dated October 14, 2002, four and a
half (4 ½) months elapsed, during which defendants have had full
opportunity to verify the correctness of said receipts. Thereafter,
another four (4) months elapsed up to the time plaintiff’s motion for
summary judgment was set for hearing on January 10, 2003. There
were, therefore, a total of 8 ½ months during which defendants could
have verified the correctness of the amounts covered by said receipts.
WHEREFORE, in view of all the foregoing, the motion for
reconsideration is denied.
SO ORDERED.14
The Office of the Solicitor General received a copy of the above order
on July 14, 2003. On July 18, 2003, the Solicitor General filed a notice
of appeal. Said notice of appeal was later withdrawn upon
manifestation by the Solicitor General that since the March 5, 2003
Order is a partial summary judgment, the same is interlocutory and not
appealable, without prejudice to petitioner’s availment of the
appropriate remedy from the said ruling.15
On the scheduled pre-trial hearing on July 3, 2003, counsel for
petitioners appeared but without a special power of attorney as
directed in the Notice of Pre-Trial. On motion of the respondent, the
trial court declared petitioners as in default and allowed the respondent
to present its evidence ex-parte.16 Petitioners filed a motion for
reconsideration claiming that the scheduled pre-trial was premature
considering the pendency of their motion for reconsideration of the
March 5, 2003 Order, and invoking the liberal policy on setting aside
default orders. The trial court, however denied said motion for
reconsideration.17
Petitioners sought relief from the CA by filing a petition for certiorari
with prayer for issuance of TRO and/or writ of preliminary injunction
(CA-G.R. SP No. 79343). Petitioners asked the appellate court to hold
in abeyance the proceedings in Civil Case No. 02-104015. Apparently,
however, petitioners’ urgent motion for the issuance of TRO was not
acted upon by the CA. After admission of the documentary exhibits
identified by Ericson Marquez and formally offered in evidence, and
there being no restraining order issued by the appellate court, the case
was deemed submitted for decision.18
On December 1, 2003, the trial court rendered its Decision19 upholding
the March 5, 2003 order granting the prayer for reimbursement but
denying the rest of respondent’s claims. The dispositive portion thereof
reads:
WHEREFORE, premises considered, except for the amount of
Php1,555,170.40 representing reimbursement of the renovations
advanced by the plaintiff which this Court had already awarded in the
Order dated March 5, 2003, the rest of the plaintiff’s claims vis-à-vis
unpaid rentals of Php 2,527,215.48 together with interest thereon at
the legal rate as well as attorney’s fees are hereby dismissed for lack
of factual and legal basis.
No pronouncement as to costs.
SO ORDERED.20
Both parties appealed the trial court’s decision (CA-G.R. CV No.
80967).21 However, respondent’s appeal was dismissed for non-
payment of appellate docket and other legal fees. Respondent
 3
challenged the said dismissal before this Court in a petition for
certiorari and mandamus (G.R. No. 165110). G.R. No. 165110 was
likewise dismissed under Resolution dated October 6, 2004 of this
Court’s Third Division.22
By Decision dated June 2, 2006, the CA dismissed petitioners’ appeal
holding that the trial court’s rendition of partial summary judgment was
inaccord with Section 1, Rule 35 of the 1997 Rules of Civil Procedure,
as amended, as it was based on petitioners’ admission in their Answer.
In rejecting petitioners’ argument that they raised a genuine factual
issue as to the reimbursable amount for the renovation works, the CA
stated:
As to the contention that defendant-appellant is entitled to verify first
the authenticity, genuineness and due execution of the documents
(e.g., receipts) relative to the renovation, suffice it to note that plaintiff-
appellee had offered its evidence on 13 December 2002 or three (3)
months prior to the issuance of the contested order. Yet, defendant-
appellant has never lift its finger to challenge the authenticity,
genuineness, and due execution of the said documents. For this
failure, it is established beyond cavil that there is no genuine issue as
to any material fact warranting thereby the issuance of a summary
judgment.23
Hence, this petition raising the sole issue of whether the CA was
correct in sustaining the trial court’s order granting the motion for
partial summary judgment thereby dispensing with a full trial on
respondent’s claim for reimbursement of ₱1,555,170.40, the amount
allegedly advanced by respondent for the repair/renovation works on
its building. With the previous dismissal by the CA of respondent’s
appeal and its petition for certiorari in this Court, the present petition is
thus confined to the propriety of the trial court’s partial summary
judgment insofar as the aforesaid claim for reimbursement.
We find the petition meritorious.
Sections 1 and 3, Rule 35 of the 1997 Rules of Civil Procedure, as
amended, provide:
SECTION 1. Summary judgment for claimant. – A party seeking to
recover upon a claim, counterclaim, or cross-claim or to obtain a
declaratory relief may, at any time after the pleading in answer thereto
has been served, move with supporting affidavits, depositions or
admissions for a summary judgment in his favor upon all or any part
thereof.
SECTION 3. Motion and proceedings thereon.– The motion shall be
served at least ten (10) days before the time specified for the hearing.
The adverse party may serve opposing affidavits, depositions or
admissions at least three (3) days before the hearing. After the
hearing, the judgment sought shall be rendered forthwith if the
pleadings, supporting affidavits, depositions, and admissions on file,
show that, except as to the amount of damages, there is no genuine
issue as to anymaterial fact and that the moving party is entitled to a
judgment as a matter of law. (Emphasis supplied.)
Summary judgment is a procedural device resorted to in order to avoid
long drawn out litigations and useless delays where the pleadings on
file show that there are no genuine issues of fact to be tried. 24 A
"genuine issue" is such issue of fact which require the presentation of
evidence as distinguished from a sham, fictitious, contrived or false
claim.25 There can be no summary judgment where questions of fact
are in issue or where material allegations of the pleadings are in
dispute.26 A party who moves for summary judgment has the burden of
demonstrating clearly the absence of any genuine issue of fact, or that
the issue posed in the complaint is so patently unsubstantial as not to
constitute a genuine issue for trial, and any doubt as to the existence of
such an issue is resolved against the movant.27
Contrary to the findings of the trial court and CA, the Answer filed by
petitioners contained a specific denial of absolute liability for the
amount being claimed as actual expenses for repairs/renovations
works done on repondent’s building after the execution of the Contract
of Lease.
5. SPECIFICALLY DENY the allegation in paragraph 4 of the complaint
that MARINA requested for alterations/renovations in accordance with
the plans prepared by MARINA on the MARC building for the account
of and at the expense of MARINA, the truth being those stated in the
Special and Affirmative Defenses hereof. They likewise
SPECIFICALLY DENY the rest of the allegations therein that said
request alterations/renovations started on December 5, 2001 and was
done by the lowest bidders, JTV Construction Group, Inc., for civil
works/renovations and NCC Communication Networks, for wiring and
cable installation, for whcih plaintiff allegedly advanced/paid the sum of
P1,555,170.40 for lack of knowledge or information sufficient to form a
belief as to the truth thereof.
xxxx
13. As an act of good faith, Atty. Sevilla, in behalf of MARINA, has
offered to shoulder and pay the actual expenses incurred for the works
done on the premises based on MARINA’s request. Moreover,
defendants cannot allow plaintiff to collect from them the additional
sum of P2,527,215.48 which is equivalent to two (2) months rental as
penalty simply because there is no justification therefor.
x x x x28
Furthermore, petitioners averred in their Opposition to Plaintiff’s Motion
for Summary Judgment in Favor of Plaintiff:
With regard to the claim for reimbursement, plaintiff has yet to
conclusively prove that the alterations/renovations it claims to have
been made in its building were actually made and that the same were
actually in accordance with the alleged request made by MARINA.
The reply-letter dated January 23, 2002 of defendant Sevilla in
response to the letters of Ericson Marquez dated December 17, 2001
and January 18, 2002, demanding reimbursements of the
alterations/renovation allegedly made upon its building, shows that it
merely required Marquez to show proof or receipt of the expenses
plaintiff alleges it had incurred.
Likewise, the letter of defendant Sevilla dated July 1, 2002, this time in
response to a similar demand letter made by plaintiff’s counsel, Atty.
Antonio Atienza, simply stated that defendants have committed
themselves to pay the actual expenses incurred by plaintiff as based
on MARINA’s request. The same offer was reiterated by defendants in
paragraph 13 of their answer to plaintiff’s complaint. It must be noted,
however, that said offer specifically pertains only to
alterations/renovations which were actually made on plaintiff’s
properties in accordance with MARINA’s request.1âwphi1
Verily, defendants have yet to actually acquiesce to the veracity of the
accomplishment reports, receipt, etc. submitted by plaintiff since the
same are still subject to verification which can only be achieved
through a full-blown trial.29 (Emphasis and underscoring in the original.)
As can be gleaned, the fact that Administrator Sevilla sent respondent
letters wherein MARINA offered to shoulder actual expenses for works
done on the premises based on MARINA’s request does not
necessarily mean that petitioners had waived their right to question the
amountbeing claimed by the respondent.30 Since the factual basis of
the claim for reimbursement was not admitted by the petitioners, it is
clear that the resolution of the question of actual works done based on
MARINA’s request, as well as the correctness of the amount actually
spent by respondent for the purpose, required a trial for the
presentation of testimonial and documentary evidence to support such
claim. The trial court therefore erred in granting summary judgment for
the respondent. The averments in the answer and opposition clearly
pose factual issues and hence rendition of summary judgment would
be improper.
It must be stressed that trial courts have limited authority to render
summary judgments and may do so only when there is clearly no
genuine issue as to any material fact. When the facts as pleaded by
the parties are disputed or contested, proceedings for summary
judgment cannot take the place of trial.31 As already stated, the burden
of demonstrating clearly the absence of genuine issues of fact rests
upon the movant, in this case the respondent, and not upon petitioners
who opposed the motion for summary judgment. Any doubt as to the
propriety of the rendition of a summary judgment must thus be
resolved against the respondent. But here, the partial summary
judgment was premised merely on the trial court’s hasty conclusion
that respondent is entitled to the reimbursement sought simply
because petitioners failed to point out what particular works were not
done or implemented not in accordance with MARINA’s specifications
after demands were made by respondent and the filing of the complaint
in court. Precisely, a trial is conducted after the issues have been
joined to enable herein respondent to prove, first, that repair/renovation
works were actually done and such were in accordance with MARINA’s
request, and second, that it actually advanced the cost thereof by
paying the contractors; and more importantly, to provide opportunity for
the petitioners to scrutinize respondent’s evidence, cross-examine its
witnesses and present rebuttal evidence. Moreover, the trial court
should have been more circumspect in ruling on the motion for
summary judgment, taking into account petitioners’ concern for
judicious expenditure of public funds in settling its liabilities to
respondent.
 4
The partial summary judgment rendered under the trial court’s Order
dated March 5, 2003 being a nullity, the case should be remanded to
saidcourt for the conduct of trial on the issue of the reimbursement of
expenses for repair/renovation works being claimed by the respondent.
For this purpose, petitioners shall be afforded fair opportunity to
scrutinize the respondent’s evidence, cross-examine its witnesses and
present controverting evidence. It is to be noted that the partial
summary judgment was rendered before petitioners were declared
non-suited. Petitioners had promptly challenged the validity of the
default order and even sought an injunction against the ex-parte
presentation of evidence by the respondent; however, the CA did not
act on the matter until the rendition of the trial court’s December 1,
2003 Decision. Substantial justice in this instance can best be served if
a full opportunity is given to both parties to litigate their dispute and
submit the merits of their respective positions.32
WHEREFORE, the petition for review on certiorari is GRANTED. The
Decision dated June 2, 2006 of the Court of Appeals in CA-G.R. CV
No. 80967 is REVERSED and SET ASIDE. The Decision dated
December 1, 2003 insofar only as it upheld the Order dated March 5,
2003 of the Regional Trial Court of Manila, Branch 42, is SET ASIDE.
The case is hereby REMANDED to the said court for further
proceedings.
No costs.
SO ORDERED.
FIRST DIVISION
G.R. No. 159520 September 19, 2006
FELISA L. PEÑA, petitioner,
vs.
GOVERNMENT SERVICE INSURANCE SYSTEM
(GSIS), respondent.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of
the 1997 Rules of Civil Procedure seeking to set aside and to declare
null and void the Decision1 of the Court of Appeals in CA-G.R. SP No.
53088 dated 24 April 2003 and its Resolution2 dated 14 August 2003,
which affirmed the Decision3 of the Office of the President dated 12
May 1999 declaring as valid and subsisting the mortgage between
Queen’s Row Subdivision, Inc., and herein respondent Government
Service Insurance System (GSIS).
The antecedent facts of the case are:
On 13 March 1985, herein petitioner Felisa Peña acquired three
subdivision lots, covered by Transfer Certificates of Title No. T-89547,
No. T-89647, and No. T-89662 of the Register of Deeds of Cavite, from
Queen’s Row Subdivision, Inc., through its President Isabel Arrieta, by
virtue of a Deed of Absolute Sale, with a right to repurchase the same
within two months, for the sum of P126,000.00 plus interest. However,
petitioner alleged that Queen’s Row Subdivision, Inc. failed to
repurchase said lots and refused to deliver the corresponding titles of
the said subdivision lots because the same were mortgaged to herein
respondent GSIS, allegedly sometime in 1971 and 1972, without the
written approval of the Housing and Land Use Regulatory Board
(HLURB) as required by Presidential Decree No. 957, otherwise known
as "The Subdivision and Condominium Buyers’ Protective Decree."
Thus, on 21 January 1994, petitioner filed a Complaint for Specific
Performance, Annulment of Mortgage, and Damages 4 before the
HLURB Regional Office against Queen’s Row Subdivision, Inc., its
President Isabel Arrieta, and respondent, asking for the cancellation of
the mortgage to respondent and the consolidation of ownership to her,
alleging that the mortgage of the subject lots to the respondent was
null and void because it had no written approval of the HLURB as
required under Presidential Decree No. 957.
Queen’s Row Subdivision, Inc. and its President Isabel Arrieta did not
file any responsive pleading. Respondent, on the other hand, filed its
Answer asserting that the subject properties had been mortgaged,
foreclosed, and transferred to its name even before the petitioner
purchased the same.
HLURB, through Housing and Land Use Arbiter Cesar A. Manuel,
rendered a Decision5 dated 20 December 1995 in favor of petitioner,
the dispositive portion of which reads, thus:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Confirming the sale of Queen’s Row Subdivision lots covered by
TCT Nos. T-89547, T-89647, and T-89662 of the Register of Deeds of
Cavite in favor of [petitioner] and consolidating ownership thereof in
favor of the latter;
2. Declaring the mortgage of the subject lots to respondent GSIS as
voidable insofar as [petitioner] is concerned but valid only as evidence
of indebtedness insofar as Queen’s Row Subdivision, Inc. and
[respondent] GSIS are concerned;
3. Directing respondent GSIS to deliver the owners (sic) duplicate copy
(sic) of the titles of subject lots to the [petitioner] within thirty days from
finality hereof;
4. Directing the Register of Deeds of Cavite to cancel the annotation of
the mortgage on said TCTs Nos. T-89547, T-89647, and T-89662,
without prejudice to the right of [respondent] GSIS to collect the
obligation of Queen’s Row Subdivision, Inc.;
5. Directing respondents Queens Row Subdivision, Inc. and Isabel Y.
Arrieta to jointly and severally pay [petitioner] the sums of P200,000.00
as and by way of exemplary damages; P200,000.00 as and by way of
moral damages; P100,000.00 plus 30% of the award granted to
[petitioner], as and for attorney’s fees and the cost of suit.
Let copy of this judgment be furnished the Register of Deeds of
Cavite.6
On 30 January 1996, respondent filed a Notice of Appeal7 from the
afore-mentioned Decision. On 9 February 1996, HLURB Arbiter
Manuel issued an Order8 denying the said appeal, citing Sections 22
and 23 of Resolution No. R-537, Series of 1994, "Adopting the 1994
Rules of Procedure of the Housing and Land Use Regulatory
Board,"9 which states that:
Section 22. Petition for Review. - No motion for reconsideration of or
mere Notice of Petition from the decision shall be entertained. Within
thirty (30) days from receipt of the decision, any aggrieved party may,
on any legal ground and upon payment of the review fee, file with the
Regional Office or directly with the Board of Commissioners a petition
for review. Copy of such a petition shall be furnished the other party
and the Regional Office in case the petition is directly filed with the
Board of Commissioners.
Within ten (10) days from receipt of a petition or an order of elevation
from the Board, the Regional Officer shall cause the elevation of the
records to the Board of Commissioners thru the Appeals Review
Group.
Section 23. Contents of a Petition for Review. – The petition for review
shall contain the petitioner’s assignment of errors on the decision
sought to be reviewed, the issues to be resolved, the law on which it is
based and the arguments in support thereof.10
Petitioner then claimed that for failure of respondent to file the proper
mode of appeal within the reglementary period before the HLURB, its
Decision dated 20 December 1995 already became final and
executory.11
However, on 25 September 1996, respondent filed a Motion to Declare
Judgment Null and Void Ab Initio12 before the Board of Commissioners
of the HLURB, claiming that the Regional Office of HLURB had no
jurisdiction to resolve the Complaint for it involved title to, possession
of, or interest in real estate, the jurisdiction of which belonged to the
Regional Trial Court. Respondent also contended that the mortgage
transaction was exempt from the provisions of Presidential Decree No.
957 because it was entered into prior to the effectivity of the said
decree. Then, on 20 January 1997, the HLURB Board of
Commissioners issued an Order13 denying the said Motion for lack of
merit.
Dissatisfied, respondent sought reconsideration of the aforesaid Order
on 24 April 1997. Still, on 14 July 1997,14 the HLURB Board of
Commissioners denied the Motion for Reconsideration of the
respondent because the Decision of HLURB dated 20 December 1995
has already become final and executory as early as March 1996.15 The
HLURB Board of Commissioners granted, however, the Ex-Parte
Motion for Execution dated 20 December 1995 filed by petitioner.
Once again aggrieved, respondent appealed the foregoing Order of the
HLURB Board of Commissioners to the Office of the President. On 12
May 1999, the Office of the President issued the assailed Decision,
declaring that:
The Order appealed from being clearly erroneous, this Office is
constrained to excuse the failure of the [respondent] GSIS to file the
 5
proper Petition for Review, a mere procedural infirmity incomparable to
the injustice that is sought to be prevented.
WHEREFORE, the Order of the Housing and Land Use Regulatory
Board dated July 14, 1997 is hereby SET ASIDE and the mortgage of
the subject lots to [respondent] GSIS declared VALID and
SUBSISTING.16
Consequently, on 4 June 1999, petitioner filed a Petition for
Review17 under Rule 43 of the 1997 Rules of Civil Procedure before
the Court of Appeals alleging that the Office of the President committed
the following grave and serious errors, to wit: (1) in not holding that the
Decision of the HLURB Regional Office dated 20 December 1995 had
become final and executory; (2) in not holding that the HLURB Board
of Commissioners as well as the Office of the President had no
jurisdiction or authority to revive, review, change, or alter the said final
and executory Decision dated 20 December 1995; (3) in excusing and
ignoring the failure of respondent to file the proper Petition for Review;
(4) in not holding that said Decision of the HLURB Regional Office
dated 20 December 1995 was supported by substantial evidence, and;
(5) in issuing the Decision in question dated 12 May 1999 and in
setting aside the Order of the HLURB Board of Commissioners dated
14 July 1997 and holding that the mortgage of subject lots to
respondent valid and subsisting.
The Court of Appeals subsequently rendered its Decision on 24 April
2003 denying the Petition for Review filed by petitioner and affirming
the Decision of the Office of the President dated 12 May 1999.
On 15 May 2003, petitioner filed a Motion for Reconsideration of the
said Decision. Nevertheless, the Court of Appeals in its Resolution
dated 14 August 2003 denied said Motion because there were no new
or substantial reasons to reverse or even modify the challenged
Decision.
Hence, this Petition.
In the petitioner’s Memorandum,18 she avers that the Decision of the
HLURB Regional Office dated 20 December 1995 had long become
final and executory for failure of the respondent to seasonably appeal
or file a Petition for Review within the reglementary period.
Consequently, the Office of the President had no more jurisdictions
over such final and executory judgment.
She further argues that a final and executory judgment rendered by the
HLURB Regional Office cannot be revived by the filing of a Motion to
Declare Judgment Null and Void Ab Initio several months after it had
become final and executory.
Finally, she claims that the Court of Appeals may have been misled by
the confusing arguments of the respondent and overlooked the fact
that the Decision of HLURB Regional Office dated 20 December 1995
has already become final and executory. Hence, the Court of Appeals
acted without jurisdiction or with grave abuse of discretion in affirming
the Decision of the Office of the President that reversed or changed a
final and executory judgment of the HLURB Regional Office.
In contrast, respondent, in its Memorandum,19 maintains that the
outright dismissal of its Notice of Appeal by the HLURB Regional Office
on the ground that the filing thereof was prohibited under the HLURB
Rules, denied respondent justice inasmuch as it has meritorious
claims. Thus, the Court of Appeals was correct in affirming the
Decision of the Office of the President that set aside the Order of the
HLURB Board of Commissioners dated 14 July 1997 and declaring as
valid and subsisting the mortgage of the subject lots to respondent.
From the foregoing arguments of the parties, this Court identifies the
following issues for resolution in this Petition, to wit:
I. Whether the Office of the President can set aside and reverse a
judgment of the HLURB Regional Office that has long become final
and executory for failure of the respondent to interpose the proper
mode of appeal within the reglementary period as provided for in the
1994 Rules of Procedure of HLURB; and
II. Whether the Court of Appeals committed a reversible error in
affirming the Decision of the Office of the President that reversed a
final and executory judgment of the HLURB.
Noteworthy is that the right to appeal is neither a natural right nor a
part of due process, except where it is granted by statute in which case
it should be exercised in the manner and in accordance with the
provisions of law.20 In other words, appeal is a right of statutory and not
of constitutional origin.21 The perfection of an appeal in the manner and
within the period prescribed by law is not only mandatory but also
jurisdictional22 and the failure of a party to conform to the rules
regarding appeal will render the judgment final and executory and,
hence, unappealable,23 for it is more important that a case be settled
than it be settled right.24 Furthermore, it is axiomatic that final and
executory judgments can no longer be attacked by any of the parties or
be modified, directly or indirectly, even by the highest court of the
land.25 Just as the losing party has the right to file an appeal within the
prescribed period, so also the winning party has the correlative right to
enjoy the finality of the resolution of the case.26
Under Section 2227 of the 1994 Rules of Procedure of the HLURB, no
Motion for Reconsideration of or a mere Notice of Petition from the
Decision shall be entertained. What are required under said HLURB
Rules are for the aggrieved party to file a Petition for Review within 30
days from receipt of the Decision on any legal ground and upon
payment of the review fee.
In the case at bar, it must be noted that after the HLURB Regional
Office rendered its 20 December 1995 Decision, respondent, instead of
filing a Petition for Review within 30 days from receipt of the said
Decision which was the proper mode of appeal before the HLURB
Board of Commissioners, opted to file a mere Notice of Appeal on 30
January 1996 which was denied in the Order of HLURB Arbiter Manuel
dated 9 February 1996 because it was prohibited by the Rules of
HLURB. Consequently, for failure of the respondent to file the proper
mode of appeal within the reglementary period, the afore-mentioned
Decision of the HLURB became final and executory as early as March
1996.
It is true, as the Court of Appeals mentioned in its Decision, that rules
of procedure are mere tools designed to facilitate the attainment of
justice and their strict and rigid application which would result in
technicalities that tend to frustrate rather than promote substantial
justice, must always be avoided28 and they cannot be blindly adhered
to if they would serve no other purpose than to put into oblivion the
very lis mota of the controversy under scrutiny.29 However, there are
certain procedural rules that must remain inviolable like those setting
the periods for perfecting an appeal or filing a Petition for Review, for it
is doctrinally entrenched that the right to appeal is a statutory right and
one who seeks to avail of that right must comply with the statute or
rules. These rules, particularly the requirements for perfecting an
appeal within the reglementary period specified in the law, must be
strictly followed as they are considered indispensable interdictions
against needless delays and for orderly discharge of judicial
business.30
The Notice of Appeal filed by the respondent cannot equate to the
Petition for Review required by the HLURB Rules. The Notice of
Appeal filed by the respondent merely states that:
Respondent Government Service Insurance System (GSIS) thru
counsel, unto this Honorable Office most respectfully gives notice that
it is appealing the Decision dated 20 December 1995 of HLURB
Arbiter, Hon. Cesar A. Manuel to the Housing and Land Use
Regulatory Board on both questions of law and fact.
Pasay City for Quezon City, January 30, 1996.31
whereas, the Petition for Review under Section 23 of the 1994 HLURB
Rules must contain the petitioner’s assignment of errors on the
decision sought to be reviewed, the issues to be resolved, the law on
which it is based and the arguments in support thereof. There is a wide
difference between Notice of Appeal and a Petition for Review in terms
of substance that the relaxation of the rigid rules of procedure cannot
be permitted.
Furthermore, it was highly improbable for the respondent to be so
unmindful of the HLURB Rules of Procedure regarding the proper
mode of appeal. Additionally, it must be noted that when respondent
filed its Notice of Appeal, it did not even state the reason why instead
of filing a Petition for Review it filed a Notice of Appeal. Hence, HLURB
Arbiter Manuel of the Regional Office cannot be faulted when he
denied respondent’s Notice of Appeal as it was prohibited under the
HLURB Rules. Also, there is nothing to prevent the 20 December 1995
Decision of the HLURB Arbiter Manuel from becoming final and
executory since respondent failed to perfect its appeal in the manner
and within the period provided for in the HLURB Rules. Where a party
does not institute the correct mode of appeal such as a Petition for
Review instead of a mere Notice of Appeal, he loses it.32
Since the 20 December 1995 Decision of HLURB Regional Office was
already final and executory, no court, not even the highest court of the
land, can revive, review, change or alter the same. It is already well
settled in our jurisdiction that the decisions and orders of administrative
agencies rendered pursuant to their quasi-judicial authority, have, upon
their finality, the force and binding effect of a final judgment within the
purview of the doctrine of res judicata. The rule of res judicata, which
forbids the reopening of a matter once judicially determined by
 6
competent authority, applies as well to the judicial and quasi-judicial
acts of public, executive, or administrative officers and boards acting
within their jurisdiction.33
In view of the foregoing, the Motion to Declare Judgment Null and
Void Ab Initio filed by respondent on 25 September 1996, or after so
many months from the finality of the Decision it seeks to be declared
null and void, can no longer be entertained by the HLURB Board of
Commissioners. The same was just an attempt to reinstate an appeal
that had already been lost. Even granting arguendo that the said
Motion was proper, still, the allegation therein of the respondent that
the HLURB Regional Office had no jurisdiction over the case because
it involved title to, possession of, or interest in real estate, the
jurisdiction of which supposedly belonged to the Regional Trial Court,
was not sufficient to warrant the declaration of the Decision of the
HLURB as null and void. Such ground relied upon by the respondent is
untenable because the jurisdiction involving unsound real estate
practices and other matters in connection thereto belongs to HLURB.
It must be remembered that Presidential Decre No. 1344 of 2 April
1978 expanded the jurisdiction of the National Housing Authority (NHA)
to include the following:
Section 1. In the exercise of its functions to regulate the real estate
trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall
have exclusive jurisdiction to hear and decide cases of the following
nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot
or condominium unit buyer against the project owner, developer,
dealer, broker, or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lot or condominium unit
against the owner, developer, dealer, broker or salesman.
On 7 February 1981, Executive Order No. 648 transferred the
regulatory and quasi-judicial functions of the NHA to Human
Settlements Regulatory Commission.
Section 8. TRANSFER OF FUNCTIONS. — The regulatory functions
of the National Housing Authority pursuant to Presidential Decrees No.
957, 1216, 1344 and other related laws are hereby transferred to the
Commission, together with such applicable personnel, appropriation,
records, equipment and property necessary for the enforcement and
implementation of such functions. Among these regulatory functions
are:
1. Regulation of the real estate trade and business;
2. Registration of subdivision lots and condominium projects;
3. Issuance of license to sell subdivision lots and condominium units in
the registered units;
4. Approval of performance bond and the suspension of license to sell;
5. Registration of dealers, brokers, and salesmen engaged in the
business of selling subdivision lots or condominium units;
6. Revocation of registration of dealers, brokers and salesmen;
7. Approval of mortgage on any subdivision lot or condominium unit
made by the owner or developer;
8. Granting of permits for the alteration of plans and the extension of
period for completion of subdivision or condominium projects;
9. Approval of the conversion to other purposes of roads and open
spaces found within the project which have been donated to the city or
municipality concerned;
10. Regulation of the relationship between lessors and lessees; and
11. Hear and decide cases on unsound real estate business practices;
claims involving refund filed against project owners, developers,
dealers, brokers or salesmen and cases of specific performance.
Executive Order No. 90 dated 17 December 1986 changed the name
of the Human Settlements Regulatory Commission to Housing and
Land Use Regulatory Board (HLURB).34
When an administrative agency or body is conferred quasi-judicial
functions, all controversies relating to the subject matter pertaining to
its specialization are deemed to be included within the jurisdiction of
said administrative agency or body. Split jurisdiction is not
favored.35 Therefore, the Complaint for Specific Performance,
Annulment of Mortgage, and Damages filed by petitioner against
respondent, though involving title to, possession of, or interest in real
estate, was well within the jurisdiction of the HLURB for it involves a
claim against the subdivision developer, Queen’s Row Subdivision,
Inc., as well as respondent.
Attention should also be called to the fact that respondent failed to act
promptly to protect its rights after HLURB Arbiter Manuel denied its
Notice of Appeal. It did not even offer an explanation why it took many
months before it filed its Motion to Declare Judgment Null and Void Ab
Initio with the HLURB Board of Commissioners. For such inaction of
the respondent for a long period of time, the 20 December 1995
Decision of the HLURB Regional Office became final and executory
and that was the price respondent had to pay for its delayed reaction.
Thus, when the Office of the President acted upon the appeal of the
respondent and thereby reversing the final and executory Decision of
the HLURB Regional Office, it acted without jurisdiction. It bears
stressing that after the Decision of the HLURB Regional Office had
become final and executory as early as March 1996, even the Office of
the President had no more jurisdiction to revive, review, change or alter
the same. Such final resolution or decision of an administrative agency
also binds the Office of the President even if such agency is under the
administrative supervision and control of the latter.36
In sum, the Decision of the HLURB Regional Office dated 20
December 1995 had become final and executory for failure of
respondent to perfect an appeal within the reglementary period in the
manner provided for in the HLURB Rules. Hence, the said Decision
became immutable; it can no longer be amended nor altered by the
Office of the President. Accordingly, inasmuch as the timely perfection
of an appeal is a jurisdictional requisite, the Office of the President had
no more authority to entertain the appeal of the respondent. Otherwise,
any amendment or alteration made which substantially affects the final
and executory judgment would be null and void for lack of jurisdiction. 37
This Court had stated before that administrative decisions must end
sometime, as fully as public policy demands that finality be written on
judicial controversies. Public interest requires that proceedings already
terminated should not be altered at every step, for the rule of non
quieta movere prescribes that what had already been terminated
should not be disturbed. A disregard of this principle does not
commend itself to sound public policy.38
The rule on finality of decisions, orders or resolutions of a judicial,
quasi-judicial or administrative body is "not a question of technicality
but of substance and merit," the underlying consideration therefore,
being the protection of the substantive rights of the winning
party.39 Nothing is more settled in law than that a decision that has
acquired finality becomes immutable and unalterable and may no
longer be modified in any respect even if the modification is meant to
correct erroneous conclusions of fact or law and whether it will be
made by the court that rendered it or by the highest court of the land.40
The reason for this is that litigation must end and terminate sometime
and somewhere, and it is essential to an effective and efficient
administration of justice that once a judgment has become final, the
winning party be not deprived of the fruits of the verdict. Court must
guard against any scheme calculated to bring about that result and
must frown upon any attempt to prolong the controversies. The only
exceptions to the general rule are the correction of clerical errors, the
so-called nunc pro tunc entries which cause no prejudice to any party,
void judgments, and whenever circumstances transpire after the finality
of the decision rendering its execution unjust and inequitable. 41
The orderly administration of justice requires that the
judgments/resolutions of a court or quasi-judicial body must reach a
point of finality set by the law, rules, and regulations. The noble
purpose is to write finis to dispute once and for all. This is a
fundamental principle in our justice system, without which there would
be no end to litigations. Utmost respect and adherence to this principle
must always be maintained by those who exercise the power of
adjudication. Any act, which violates such principle, must immediately
be struck down.42 Indeed, the principle of conclusiveness of prior
adjudications is not confined in its operation to the judgments of what
are ordinarily known as courts, but it extends to all bodies upon which
judicial powers had been conferred.43
As a final point. Having said that the Decision of the HLURB Regional
Office dated 20 December 1995 had become final and executory, it
was, therefore, a reversible error on the part of the Court of Appeals to
affirm the Decision of the Office of the President reversing the HLURB
Regional Office, because such Decision was rendered by the Office of
the President without jurisdiction. Hence, when the Court of Appeals
 7
affirmed the Decision of the Office of the President, it likewise acted
without jurisdiction. Well-settled is the rule that once a judgment has
become final and executory, no court, not even this Court, has the
power to revive, review, change or alter the same.
WHEREFORE, premises considered, the instant Petition is
hereby GRANTED. Both the Court of Appeals and the Office of the
President have no more jurisdictions to review much more to reverse
the 20 December 1995 Decision of the HLURB Regional Office, as it
was already final and executory. Thus, the Decision of the Court of
Appeals dated 24 April 2003 and its Resolution dated 14 August 2003
affirming the Decision of the Office of the President dated 12 May 1999
declaring as valid and subsisting the mortgage between Queen’s Row
Subdivision, Inc. and herein respondent are SET ASIDE and the
Decision of the HLURB Regional Office dated 20 December 1995 is
hereby REINSTATED. No costs.
SO ORDERED.
G.R. No. 113087 June 27, 1994
REBECCO PANLILIO, ERLINDA PANLILIO and JOSE MARCEL
PANLILIO, petitioners,
vs.
HON. JOSEFINA G. SALONGA, Presiding Judge of RTC, Makati
Branch 149 and FE V. FEDERIS, respondents.
Castillo, Laman, Tan & Pantaleon for petitioners.
Paruangao, Abesamis, Eleazar and Pulgar Law Office for private
respondent.
MELO, J.:
Through a supplication for a writ of habeas corpus initiated by the
natural mother, the Honorable Josefina Guevara Salonga, Presiding
Judge of Branch 149 of the Regional Trial Court of the National Capital
Judicial Region stationed in Makati, was persuaded to accede to the
requested writ albeit the grandparents of the minor child had been
previously designated guardians
ad litem by another coordinate court in Naic, Cavite. It is petitioners'
submission in the recourse before us that the action pursued by the
natural mother vis-a-vis the reaction thereto of the Makati court is
punctuated with congenital and procedural infirmity.
Michael Lancelot F. Panlilio who was born on July 7, 1990, is said to
be the natural child of petitioner Jose Marcel E. Panlilio and private
respondent Fe V. Federis (p. 69, Rollo) while principal petitioners
Rebecco and Erlinda Panlilio are the natural grandparents of the minor,
being the parents of Jose Marcel E. Panlilio.
Owing to the so-called cruelty, moral depravity and gross neglect of
private respondent, the grandparents felt obliged to exercise substitute
parental authority over the minor which apprehension led to the
initiation on December 14, 1993 of special proceedings geared towards
securing their appointment as guardians ad litem of the ward (p.
87, Rollo). The Presiding Judge of Branch 15 of the Regional Trial
Court stationed in Naic, Cavite, before whom the case was eventually
raffled, issued an order on December 16, 1993 in the following tenor:
This is a verified petition for the deprivation of
parental authority of the natural mother herein
respondent Fe V. Federis. The petition is sufficient
in form and substance.
WHEREFORE, the Court believes that it is to the
best interest of the minor Michael Lancelot F.
Panlilio, the natural grandson of petitioners, for
Spouses Rebecco and Erlinda Panlilio who are
presently in custody of the minor, to be appointed
guardian ad litem pending determination of the
merits of this case.
(p. 22, Rollo.)
On December 22, 1993, a petition for habeas corpus was submitted by
private respondent and later assigned to Branch 149 of the Regional
Trial Court in Makati. The natural mother's remedial measure tersely
narrated how she was allegedly duped into permitting her son on one
occasion to go with herein petitioners in Makati only to wait in vain on
account of the vehement and persistent reluctance of petitioners to
return the child despite repeated demands therefor (p. 56, Rollo). The
Makati court immediately ordered the issuance of the writ of habeas
corpus on December 23, 1993 in this manner:
Whereas, a duly verified petition has been filed in
the above-entitled case by Fe V. Federis alleging
that the minor Michael Lancelot F. Panlilio is
presently detained and restrained of his liberty by
Sps. Rebecco and Erlinda Panlilio and Jose
Marcel E. Panlilio and/or all persons having
custody of the child.
NOW, therefore, pursuant to Sec. 6 of Rule 102 of
the Rules of Court, you are commanded to take
the body and person of Michael Lancelot F.
Panlilio before this Court, Regional Trial Court,
Branch 149, Makati, Metro Manila, and to make a
return of the writ both to be done on December 27,
1993 at 9:30 in the morning, at which date and
time the parties will be heard.
Witness the Hon. JOSEFINA GUEVARA
SALONGA of this Court, this 23rd day of
December, 1993, at Makati, Metro Manila
(p. 60, Rollo.)
which was supplemented on December 29, 1993 by a hold
departure order of Michael Lancelot F. Panlilio until further
orders (p. 62, Rollo).
In the meantime, herein petitioners moved to dismiss the habeas
corpus petition on the basis of litis pendentia as well as lack of cause
of action (p. 70, Rollo), while herein private respondent filed her own
motion to dismiss in the Cavite custody case anchored on improper
venue and the existence of a prejudicial question (p. 132, Rollo).
When petitioners' motion to dismiss was submitted for resolution on
January 7, 1994, the Makati judge hearing the habeas corpus case
supposedly made a verbal order to produce the body of the minor child
on January 10, 1994 which prompted herein petitioners to forthwith file
the petition at bench
(p. 2, Rollo).
Following the filing of said petition which had a corollary plea for
issuance of a restraining order, this Court resolved to:
. . . ISSUE the TEMPORARY RESTRAINING
ORDER prayed for, restraining the implementation
of the verbal orders of respondent Judge made in
open court on January 7, 1994 in Sp. Proc. No.
3711, of the Regional Trial Court of Makati, Branch
149 and from conducting further proceedings in
the case, effective today and until further orders
from this Court. (Feliciano, Jr., no part)
(p. 26, Rollo.)
Petitioners are of the fundamental impression that their appointment as
guardians ad litem by the Cavite court was rendered illusory by private
respondent's expedient act of filing in Makati a petition for, and
issuance of the writ of, habeas corpus. Suggestion is made that private
respondent's maneuver is tantamount to the abhorred practice of
shopping for a friendly forum. Even then, petitioners are confident that
their momentary custody of the ward by virtue of a lawful court order
bars the issuance of the writ of habeas corpus due to the proscription
under Section 4, Rule 102 of the Revised Rules of Court which
pertinently provides:
Sec. 4. When writ not allowed or discharged
authorized. — If it appears that the person alleged
to be restrained of his liberty is in the custody of an
officer under process issued by a court or by virtue
of a judgment or order of a court of record, and
that the court of judge had jurisdiction to issue the
process, render judgment, or make the order, the
writ shall not be allowed . . .
By contrast, private respondent harps on certain perceived flaws on
procedural matters starting from the filing of the petition for termination
of her parental authority in Cavite up to the promulgation of the order
appointing petitioners as guardians ad litem. Moreover, private
 8
respondent emphasizes the salient features of the Family Code with
particular reference to the exercise of parental authority by the mother
over her own illegitimate child and the general caveat that no child
under 7 years of age shall be separated from the mother except when
the court finds compelling reasons to order otherwise. At any rate, she
maintains that petitioners' appointment as guardians ad litem poses no
obstacle to her own recourse designed to regain custody of her
child via a habeas corpus petition.
We perceive merit in the petition.
The doctrine of judicial stability or non-interference in the regular
orders or judgments of a co-equal court, as an accepted axiom in
adjective law, serves as an insurmountable barrier to
the competencia of the Makati court to entertain the habeas
corpus case on account of the previous assumption of jurisdiction by
the Cavite court, and the designation of petitioners as guardians ad
litem of the ward. Indeed, the policy of peaceful co-existence among
courts of the same judicial plane, so to speak, was aptly described
in Republic vs. Reyes (155 SCRA 313 [1987]), thus:
. . . the doctrine of non-interference has been
regarded as an elementary principle of higher
importance in the administration of justice that the
judgment of a court of competent jurisdiction may
not be opened, modified, or vacated by any court
of concurrent jurisdiction (30-A Am Jur 605). As
this Court ruled in the case of Mas vs. Dumara-og,
12 SCRA 34 [1964], a Judge of a branch of one
should not annul the order of a judge of another
branch of the same court. Any branch even if it be
in the same judicial district that attempts to annul a
judgment of a branch of the CFI either exceeds its
jurisdiction (Cabigo vs. Del Rosario, 44 Phil. 84
[1949]) or acts with grave abuse of discretion
amounting to lack of jurisdiction (PNB vs.
Javellana, 92 Phil. 525 [1952]). Thus, in the case
of Parco vs. Ca, 111 SCRA 262, this Court held
that the various branches of the Court of First
Instance being co-equal cannot interfere with the
respective cases of each branch, much less a
branch's order or judgment.
(pp. 324-325)
Consequently, even as the appointment of principal petitioners is still
subject to the outcome of the case lodged before the Cavite court, not
to mention the possible courses of action which private respondent
may pursue in said case to vindicate custody of her child, it cannot be
gainsaid that the immediate assumption of authority by the Makati
court, although possibly motivated by a noble goal, is tantamount to
defeating the very essence of the order emanating from the Cavite
court. While habeas corpus is the proper remedy to regain custody of
minor children as enunciated in Salvana and Saliendra vs. Gaela (55
Phil. 680 [1931]; 5-B, Francisco, Revised Rules of Court, 1970 ed., p.
694) yet this principle is understood to presuppose that there is no
other previous case whose issue is necessarily interwoven with the
nature of a habeas corpus proceeding. Verily, the existence of an
anterior suit, such as the termination of private respondent's parental
authority in the Cavite court, coupled with the order appointing principal
petitioners as guardians ad litem of the ward, is sufficient to
momentarily stave off private respondent's short-cut and subtle attempt
to regain custody of her son at another forum, by reason of the
corollary principle that initial acquisition of jurisdiction by a court of
concurrent jurisdiction divests another of its own jurisdiction (Valdez
vs. Lucero, 43 OG, No. 11, 2835; 1 Francisco Revised Rules of Court,
1973 ed., p. 115; St. Anne Medical Center vs. Panel, 176 SCRA 755;
761 [1989]). Justice Paras, in Lee vs. Presiding Judge, MTC of Legaspi
City, Branch I
(145 SCRA 408 [1986]), echoed oft-repeated truisms:
It has been held that "even in cases of concurrent
jurisdiction, it is, also, axiomatic that the court first
acquiring jurisdiction excludes the other courts"
(Laquian vs. Baltazar, 31 SCRA 552, 556 [1970],
please see cases cited therein).
In addition, it is a familiar principle that when a
court of competent jurisdiction acquires jurisdiction
over the subject matter of a case, its authority
continues, subject only to the appellate authority,
until the matter is finally and completely disposed
of, and that no court of co-ordinate authority is at
liberty to interfere with its action. This doctrine is
applicable to civil cases, to criminal prosecutions,
and to courts-martial. The principle is essential to
the proper and orderly administration of the laws;
and while its observance might be required on the
grounds of judicial comity and courtesy, it does not
rest upon such considerations exclusively, but is
enforced to prevent unseemly, expensive, and
dangerous conflicts of jurisdiction and of the
process. (14 Am, Jr. 435-436, cited in Francisco,
Vicente, Revised Rules of Court, pp. 57-58, Vol. I,
1965 ed.).
(p. 416)
And certainly, given the propensity of the Makati court to intrude and
render nugatory an order or decision of another co-equal court,
certiorari is the appropriate relief against deviation from the doctrine of
judicial comity (Annotation on Judicial Interference by One Court in the
Actuations of Another Co-equal Court, 99 SCRA 84; 89).
Of course, we are not unmindful of private respondent's protestations
on the manner the order of petitioners' appointment as guardian ad
litem was effected but her insinuations on this score should be first
addressed to, and resolved by, the Cavite court, not to mention the
availability of appeal therefrom in the event an unfavorable decision is
finally made. Not to be ignored too, is private respondent's reliance on
Articles 176 and Article 213 of the Family Code, with reference to the
parental authority of the mother over her illegitimate child and the
general proscription that no child under 7 years shall be separated
from the mother except under certain cases. Again, these matters
would be relevant in and capable of resolution in the case filed in
Cavite, but may not now be utilized by herein private respondent to
assail the authority of the Cavite court for the simple, nay, obvious
reason that these considerations are matters of defense which may be
availed of by private respondent to ward off the suit for termination of
her parental authority.
WHEREFORE, the petition is hereby granted and the Honorable
Josefina G. Salonga, Presiding Judge of Branch 149 of the Regional
Trial Court of Makati is hereby directed to dismiss the habeas
corpus case. The temporary restraining order issued by this Court on
January 12, 1994 is hereby made permanent.
SO ORDERED.
EN BANC
G.R. No. 198423 October 23, 2012
LEO A. GONZALES, Petitioner,
vs.
SOLID CEMENT CORPORATION and ALLEN
QUERUBIN, Respondents.
RESOLUTION
BRION, J.:
Before us is the Second Motion for Reconsideration1 filed by petitioner
Leo Gonzales (petitioner) in the case in caption (the current petition).
Previously, the Court granted the petitioner's Motion for Leave to File
and Admit the Attached Motion to Refer the Case to the Court En
Bane. The motion for reconsideration addresses our Minute
Resolutions of November 16, 2011 and February 27, 2012, both
denying petitioner’s petition for review on certiorari.
The Antecedent Facts
The current petition arose from the execution of the final and executory
judgment in the parties’ illegal dismissal dispute (referred to as "original
case," docketed in this Court as G.R. No. 165330 and entitled Solid
Cement Corporation, et al. v. Leo Gonzales). The Labor Arbiter (LA)
resolved the case at his level on December 12, 2000. Since the LA
found that an illegal dismissal took place, the company reinstated
petitioner Gonzales in the payroll on January 22, 2001.2
In the meanwhile, the parties continued to pursue the original case on
the merits. The case was appealed to the National Labor Relations
Commission (NLRC) and from there to the Court of Appeals (CA) on a
petition for certiorari under Rule 65 of the Rules of Court. The LA’s
ruling of illegal dismissal was largely left undisturbed in these
subsequent recourses. The original case eventually came to this Court.
In our Resolutions of March 9, 20053 and June 8, 2005,4 we denied the
petition of respondent Solid Cement Corporation (Solid Cement) for
lack of merit. Our ruling became final and entry of judgment took place
on July 12, 2005.
Soon after its finality, the original case was remanded to the LA for
execution. The LA decision dated December 12, 2000 declared the
 9
respondents guilty of illegal dismissal and ordered the reinstatement of
Gonzales to his former position "with full backwages and without loss
of seniority rights and other benefits."5 Under this ruling, as modified by
the NLRC ruling on appeal, Gonzales was awarded the following:
(1) Backwages in the amount of P636,633.33;
(2) Food and Transportation Allowance in the amount of P18,080.00;
(3) Moral damages in the amount of P100,000.00;
(4) Exemplary damages in the amount of P 50,000.00; and
(5) Ten percent (10%) of all sums owing to the petitioner as attorney’s
fees.
Actual reinstatement and return to work for Gonzales (who had been
on payroll reinstatement since January 22, 2001) came on July 15,
2008.6
When Gonzales moved for the issuance of an alias writ of execution on
August 4, 2008, he included several items as components in
computing the amount of his backwages. Acting on the motion, the LA
added P57,900.00 as rice allowance and P14,675.00 as medical
reimbursement (with the company’s apparent conformity), and
excluded the rest of the items prayed for in the motion, either because
these items have been paid or that, based on the records of the case,
Gonzales was not entitled thereto. Under the LA’s execution order
dated August 18, 2009, Gonzales was entitled to a total of
P965,014.15.7
The NLRC, in its decision8 dated February 19, 2010 and resolution
dated May 18, 2010, modified the LA’s execution order by including the
following amounts as part of the judgment award:
Additional backwages from Dec. 13, 2000 to Jan. 21, 2001 P 50,
800.009
Salary differentials from year 2000 until August 2008 617,517.48
13th month pay differential 51,459.79
13th month pay for years 2000 and 2001 80,000.00
12% interest from July 12, 2005 878,183.42
This ruling increased Gonzales’ entitlement to P2,805,698.04.
On a petition for certiorari under Rule 65 of the Rules of Court, the CA
set aside the NLRC’s decision and reinstated the LA’s order, prompting
Gonzales to come to the Court via a petition for review on certiorari
(docketed as G.R. No. 198423) under Rule 45 of the Rules of Court. In
our Minute Resolutions, we denied Gonzales’ Rule 45 petition. At this
point came the two motions now under consideration.
For easier tracking and understanding, the developments in the original
case and in the current petition are chronologically arranged in the
table below:
October 5, 1999 Solid Cement terminated Gonzales’ employment;
December 12, 2000 The LA declared that Gonzales was illegally
dismissed and ordered his reinstatement;
January 5, 2001 Gonzales filed a Motion for Execution of reinstatement
aspect;
January 22, 2001 Solid Cement reinstated Gonzales in the payroll;
March 26, 2002 The NLRC modified the LA decision by reducing
amount of damages awarded by the LA but otherwise affirmed the
judgment;
June 28, 2004 The CA dismissed Solid Cement’s certiorari petition;
March 9, 2005 The Court ultimately denied Solid Cement’s petition for
review;
July 12, 2005 The judgment became final and an entry of judgment
was recorded;
July 15, 2008 Gonzales was actually reinstated;
August 4, 2008 Gonzales filed with the LA a motion for the issuance of
an alias writ of execution (with computation of monetary benefits as of
August 28, 2008 – the day before his termination anew, allegedly due
to redundancy, shall take effect);
August 18, 2009 The LA issued an Order directing the issuance of a
writ of execution;
February 19, 2010 The NLRC rendered a decision affirming with
modification the LA’s Order by including certain monetary benefits in
favor of Gonzales;
May 31, 2011 The CA reversed the NLRC and reinstated the LA’s
Order;
November 16, 2011 The Court denied Gonzales’ petition for review,
questioning the reinstatement of the LA’s Order;
February 27, 2012 The Court denied Gonzales’ 1st motion for
reconsideration;
April 12, 2012 Gonzales again moved for reconsideration and asked
that his case be referred to the En Banc.
Our Ruling
As a rule, a second motion for reconsideration is a prohibited pleading
under the Rules of Court,10 and this reason alone is sufficient basis for
us to dismiss the present second motion for reconsideration. The ruling
in the original case, as affirmed by the Court, has been expressly
declared final. A definitive final judgment, however erroneous, is no
longer subject to change or revision.
A decision that has acquired finality becomes immutable and
unalterable. This quality of immutability precludes the modification of a
final judgment, even if the modification is meant to correct erroneous
conclusions of fact and law. And this postulate holds true whether the
modification is made by the court that rendered it or by the highest
court in the land. The orderly administration of justice requires that, at
the risk of occasional errors, the judgments/resolutions of a court must
reach a point of finality set by the law. The noble purpose is to write
finis to dispute once and for all. This is a fundamental principle in our
justice system, without which there would be no end to litigations.
Utmost respect and adherence to this principle must always be
maintained by those who exercise the power of adjudication. Any act,
which violates such principle, must immediately be struck down.
Indeed, the principle of conclusiveness of prior adjudications is not
confined in its operation to the judgments of what are ordinarily known
as courts, but extends to all bodies upon which judicial powers had
been conferred.11 (emphases ours, citations omitted)
After due consideration and further analysis of the case, however, we
believe and so hold that the CA did not only legally err but even acted
outside its jurisdiction when it issued its May 31, 2011 decision.
Specifically, by deleting the awards properly granted by the NLRC and
by reverting back to the LA’s execution order, the CA effectively varied
the final and executory judgment in the original case, as modified on
appeal and ultimately affirmed by the Court, and thereby acted outside
its jurisdiction. The CA likewise, in the course of its rulings and as
discussed below, acted with grave abuse of discretion amounting to
lack or excess of jurisdiction by using wrong considerations, thereby
acting outside the contemplation of law.
The CA’s actions outside its jurisdiction cannot produce legal effects
and cannot likewise be perpetuated by a simple reference to the
principle of immutability of final judgment; a void decision can never
become final. "The only exceptions to the rule on the immutability of
final judgments are (1) the correction of clerical errors, (2) the so-called
nunc pro tunc entries which cause no prejudice to any party, and (3)
void judgments."12 For these reasons, the Court sees it legally
appropriate to vacate the assailed Minute Resolutions of November 16,
2011 and February 27, 2012, and to reconsider its ruling on the current
petition.
The fallo or the dispositive portion
The resolution of the court in a given issue – embodied in the fallo or
dispositive part of a decision or order – is the controlling factor in
resolving the issues in a case. The fallo embodies the court’s decisive
action on the issue/s posed, and is thus the part of the decision that
must be enforced during execution. The other parts of the decision only
contain, and are aptly called, the ratio decidendi (or reason for the
decision) and, in this sense, assume a lesser role in carrying into effect
the tribunal’s disposition of the case.
When a conflict exists between the dispositive portion and the opinion
of the court in the text or body of the decision, the former must prevail
over the latter under the rule that the dispositive portion is the definitive
order, while the opinion is merely an explanatory statement without the
effect of a directive. Hence, the execution must conform with what the
fallo or dispositive portion of the decision ordains or decrees.
Significantly, no claim or issue has arisen regarding the fallo of the
labor tribunals and the CA’s ruling on the merits of the original case.
 10
We quote below the fallo of these rulings, which this Court ultimately
sustained.
LA ruling:
WHEREFORE, premises considered, respondents are hereby declared
guilty of ILLEGAL DISMISSAL and ordered to reinstate complainant to
his former position with full backwages and without loss of seniority
rights and other benefits which to date amounts (sic) to Six Hundred
Thirty Six Thousand and Six Hundred Thirty Three Pesos and Thirty
Three Centavos (P636,633.33).
Further, respondents are jointly and severally liable to pay the
following:
1. P18,080 as reimbursement for food and transportation allowance;
2. Five Hundred Thousand (P500,000.00) Pesos as moral damages;
3. Two Hundred Fifty Thousand (P250,000.00) Pesos as exemplary
damages; and
4. 10% of all sums owing to complainant as attorney’s
fees.13 (emphasis and underscoring ours)
NLRC Ruling:
WHEREFORE, premises considered, the decision under review is
hereby, MODIFIED by REDUCING the amount of moral and exemplary
damages due the complainant to the sum of P100,000.00 an
P50,000.00, respectively.
Further, joint and several liability for the payment of backwages, food
and transportation allowance and attorney’s fees as adjudged in the
appealed decision is hereby imposed only upon respondents Allen
Querubin and Solid Cement Corporation, the latter having a personality
which is distinct and separate from its officers.
The relief of reinstatement is likewise, AFFIRMED.14
CA Ruling:
IN VIEW OF ALL THE FOREGOING, the instant petition is hereby
dismissed for lack of merit. Accordingly, the decision of the Second
Division of the NLRC dated 26 March 2002 in NLRC CA No. 027452-
01 is hereby AFFIRMED.15
We affirmed the CA ruling on the original case in the final recourse to
us; thus, on the merits, the judgment in Gonzales’ favor is already final.
From that point, only the implementation or execution of the fallo of the
final ruling remained to be done.
Re-computation of awards during
execution of an illegal dismissal
decision
On the execution aspect of an illegal dismissal decision, the case of
Session Delights Ice Cream and Fast Foods v. Court of Appeals (Sixth
Division),16 despite its lack of a complete factual congruence with the
present case, serves as a good guide on how to approach the
execution of an illegal dismissal decision that contains a monetary
award.
In Session Delights, the LA found that the employee had been illegally
dismissed and consequently ordered the payment of separation pay (in
lieu of reinstatement), backwages, 13th month pay, and indemnity, all
of which the LA itemized and computed as of the time of his decision.
The NLRC and the CA affirmed the LA’s decision on appellate review,
except that the CA deleted the award for 13th month pay and
indemnity. In due course, the CA decision became final.
During the execution stage of the decision, the LA arrived at an
updated computation of the final awards that included additional
backwages, separation pay (computed from the date of the LA decision
to the finality of the ruling on the case) and 13th month pay. This
updated computation was affirmed by the NLRC and by the CA, except
for the latter’s deletion of the 13th month pay award.
Session Delights went to this Court raising the issue of whether the
original fallo of the LA’s decision on the merits – at that point already
final – could still be re-computed. After stating that only the monetary
awards of backwages, separation pay, and attorney’s fees required
active enforcement and re-computation, the Court stated:
A source of misunderstanding in implementing the final decision in this
case proceeds from the way the original labor arbiter framed his
decision. The decision consists essentially of two parts.
The first is x x x the finding of the illegality of the dismissal and the
awards of separation pay in lieu of reinstatement, backwages,
attorney’s fees, and legal interests.
The second part is the computation of the awards made. On its face,
the computation the labor arbiter made shows that it was time-bound
as can be seen from the figures used in the computation. This part,
being merely a computation of what the first part of the decision
established and declared, can, by its nature, be re-computed. x x x.
xxxx
However, the petitioner disagreed with the labor arbiter’s findings on all
counts – i.e., on the finding of illegality as well as on all the consequent
awards made. Hence, the petitioner appealed the case to the NLRC
which, in turn, affirmed the labor arbiter’s decision. x x x.
The petitioner appropriately sought to nullify the NLRC decision on
jurisdictional grounds through a timely filed Rule 65 petition for
certiorari. The CA decision, finding that NLRC exceeded its authority in
affirming the payment of 13th month pay and indemnity, lapsed to
finality and was subsequently returned to the labor arbiter of origin for
execution.
It was at this point that the present case arose. Focusing on the core
illegal dismissal portion of the original labor arbiter’s decision, the
implementing labor arbiter ordered the award re-computed; he
apparently read the figures originally ordered to be paid to be the
computation due had the case been terminated and implemented at
the labor arbiter’s level. Thus, the labor arbiter re-computed the award
to include the separation pay and the backwages due up to the finality
of the CA decision that fully terminated the case on the merits.
Unfortunately, the labor arbiter’s approved computation went beyond
the finality of the CA decision (July 29, 2003) and included as well the
payment for awards the final CA decision had deleted – specifically,
the proportionate 13th month pay and the indemnity awards. Hence,
the CA issued the decision now questioned in the present petition.
We see no error in the CA decision confirming that a re-computation is
necessary as it essentially considered the labor arbiter’s original
decision in accordance with its basic component parts as we discussed
above. To reiterate, the first part contains the finding of illegality and its
monetary consequences; the second part is the computation of the
awards or monetary consequences of the illegal dismissal, computed
as of the time of the labor arbiter’s original decision.
xxxx
x x x. What the petitioner simply disputes is the re-computation of the
award when the final CA decision did not order any re-computation
while the NLRC decision that the CA affirmed and the labor arbiter
decision the NLRC in turn affirmed, already made a computation that –
on the basis of immutability of judgment and the rule on execution of
the dispositive portion of the decision – should not now be disturbed.
Consistent with what we discussed above, we hold that under the
terms of the decision under execution, no essential change is made by
a re-computation as this step is a necessary consequence that flows
from the nature of the illegality of dismissal declared in that decision. A
re-computation (or an original computation, if no previous computation
has been made) is a part of the law – specifically, Article 279 of the
Labor Code and the established jurisprudence on this provision – that
is read into the decision. By the nature of an illegal dismissal case, the
reliefs continue to add on until full satisfaction, as expressed under
Article 279 of the Labor Code. The re-computation of the
consequences of illegal dismissal upon execution of the decision does
not constitute an alteration or amendment of the final decision being
implemented. The illegal dismissal ruling stands; only the computation
of monetary consequences of this dismissal is affected and this is not a
violation of the principle of immutability of final judgments.
x x x The core issue in this case is not the payment of separation pay
and backwages but their re-computation in light of an original labor
arbiter ruling that already contained a dated computation of the
monetary consequences of illegal dismissal.
That the amount the petitioner shall now pay has greatly increased is a
consequence that it cannot avoid as it is the risk that it ran when it
continued to seek recourses against the labor arbiter’s decision. Article
279 provides for the consequences of illegal dismissal in no uncertain
terms, qualified only by jurisprudence in its interpretation of when
separation pay in lieu of reinstatement is allowed. When that happens,
the finality of the illegal dismissal decision becomes the reckoning point
instead of the reinstatement that the law decrees. In allowing
separation pay, the final decision effectively declares that the
employment relationship ended so that separation pay and backwages
 11
are to be computed up to that point. The decision also becomes a
judgment for money from which another consequence flows – the
payment of interest in case of delay. This was what the CA correctly
decreed when it provided for the payment of the legal interest of 12%
from the finality of the judgment, in accordance with our ruling in
Eastern Shipping Lines, Inc. v. Court of Appeals.17 (emphases ours,
italics supplied)
The re-computation of the amounts still due took off from the LA’s
decision that contained the itemized and computed dispositive portion
as of the time the LA rendered his judgment. It was necessary because
time transpired between the LA’s decision and the final termination of
the case on appeal, during which time the illegally dismissed employee
should have been paid his salary and benefit entitlements.
The present case, of course, is not totally the same as Session
Delights. At the most obvious level, separation pay is not an issue here
as reinstatement, not separation from service, is the final directive;
Gonzales was almost immediately reinstated pending appeal, although
only by way of a payroll reinstatement as allowed by law. Upon the
finality of the decision on the appeal, Gonzales was actually reinstated.
Although backwages was an issue in both cases, the thrusts of this
issue in the two cases were different. In Session Delights, the issue
was more on whether the award would be confined to what the LA
originally awarded or would continue to run during the period of appeal.
This is not an issue in the present case, since Gonzales received his
salary and benefit entitlements during his payroll reinstatement; the
general concern in the present case is more on the items that should
be included in the award, part of which are the backwages.
In other words, the current petition only generally involves a
determination of the scope of the awards that include the backwages.
The following were the demanded items:
1. Additional backwages from the LA’s decision (on the merits) until
Gonzales was payroll reinstated;
2. Seniority rights
a. longevity pay/loyalty/service award
b. general annual bonus
c. annual birthday gift
d. bereavement assistance;
3. Other benefits
a. vacation and sick leave
b. holiday pay;
4. Other allowances
a. monetary equivalent of rice allowance (from October 1999 to July
2005) which should be included in computing backwages
b. monetary equivalent of yearly medical allowance from 2000 to July
2005 which should be included in computing backwages
c. meal allowance
d. uniform and clothing allowance
e. transportation, gasoline and representation allowance;
5. 13th month pay for the years 2000 and 2001;
6. Salary differentials;
7. Damages;
8. Interest on the computed judgment award; and
9. Attorney’s fees.18
The LA and the NLRC uniformly excluded some of these items from
the awards they made and we could have dismissed the current
petition outright on the issue of entitlement to these benefits, since
entitlement mainly involves questions of fact which a Rule 45 petition
generally does not allow. A deeper consideration of the current petition,
however, shows that there is more beyond the factual issues of
entitlement that are evident on the surface.
To recall, the NLRC differed from the LA on the actual details of
implementation and modified the latter’s ruling by including –
Additional backwages from Dec. 13, 2000 to Jan. 21, 2001 P 50,
800.0019
Salary differentials from year 2000 until August 2008 617,517.48
13th month pay differential 51,459.79
13th month pay for years 2000 and 2001 80,000.00
12% interest from July 12, 2005 878,183.42
The CA, in its own Rule 65 review of the NLRC ruling, effectively found
that the NLRC acted outside its jurisdiction when it modified the LA’s
execution order and, on this basis, ruled for the implementation of what
the LA ordered.
Under this situation and in the context of the Rule 45 petition before us,
the reviewable issue before us is whether the CA was legally correct in
finding that the NLRC acted outside its jurisdiction when it modified the
LA’s execution order. This is the issue on which our assailed
Resolutions would rise or fall. For, indeed, a Rule 45 petition which
seeks a review of the CA decision on a Rule 65 petition should be
reviewed "from the prism of whether the CA correctly determined the
presence or absence of grave abuse of discretion in the NLRC
decision."20 In short, we do not rule whether the CA committed grave
abuse of discretion; rather, we rule on whether the CA correctly
determined the absence or presence of grave abuse of discretion by
the NLRC.
The components of the backwages
a. Salary and 13th month differential due after dismissal
In the case of BPI Employees Union – Metro Manila and Zenaida Uy v.
Bank of the Philippine Islands and Bank of the Philippine Islands v. BPI
Employees Union – Metro Manila and Zenaida Uy,21 the Court ruled
that in computing backwages, salary increases from the time of
dismissal until actual reinstatement, and benefits not yet granted at the
time of dismissal are excluded. Hence, we cannot fault the CA for
finding that the NLRC committed grave abuse of discretion in awarding
the salary differential amounting to P617,517.48 and the 13th month
pay differentials amounting to P51,459.48 that accrued subsequent to
Gonzales’ dismissal.
b. Legal interest of 12% on total judgment
However, based on the same BPI case, Gonzales is entitled to 12%
interest on the total unpaid judgment amount, from the time the Court’s
decision (on the merits in the original case) became final. When the CA
reversed the NLRC and reinstated the LA’s ruling (which did not order
payment of interest), the CA overstepped the due bounds of its
jurisdiction under a certiorari petition as it acted on the basis of wrong
considerations and outside the contemplation of the law on the legal
interests that final orders and rulings on forbearance of money should
bear.
In a certiorari petition, the scope of review is limited to the
determination of whether a judicial or quasi-judicial tribunal acted
without or in excess of its jurisdiction or grave abuse of discretion
amounting to lack of jurisdiction; such grave abuse of discretion can
exist when the ruling entity used the wrong considerations and thereby
acted outside the contemplation of law. In justifying the return to and
adoption of the LA’s execution order, the CA solely relied on the
doctrine of immutability of judgment which it considered to the
exclusion of other attendant and relevant factors. This is a fatal error
that amounted to grave abuse of discretion, particularly on the award of
12% interest. The seminal case of Eastern Shipping Lines, Inc. v.
Court of Appeals22 cannot be clearer on the rate of interest that applies:
3. When the judgment of the court awarding a sum of money becomes
final and executory, the rate of legal interest x x x shall be 12% per
annum from such finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of
credit.23 (emphasis ours)
In BPI, we even said that "this natural consequence of a final judgment
is not defeated notwithstanding the fact that the parties were at
variance in the computation of what is due"24 under the judgment. In
the present case, the LA’s failure to include this award in its order was
properly corrected by the NLRC on appeal, only to be unreasonably
deleted by the CA. Such deletion, based solely on the immutability of
the judgment in the original case, is a wrong consideration that fatally
afflicts and renders the CA’s ruling void.
c. Additional backwages and 13th month pay
We reach the same conclusion on the other deletions the CA made,
particularly on the deletion of the 13th month pay for 2000-2001,
amounting to P80,000.00, and the additional backwages for the period
of December 13, 2000 to January 21, 2001, amounting to P50,800.00.
 12
We note in this regard that the execution proceedings were conducted
before the LA issued an Order requiring the payment of P965,014.15 in
Gonzales’ favor. An appeal of this computation to the NLRC to
question the LA’s determination of the amount due throws the LA’s
determination wide open for the NLRC’s review. In granting these
monetary reliefs, the NLRC reasoned that –
Since there is no showing that complainant was paid his salaries from
the time when he should have been immediately reinstated until his
payroll reinstatement, he is entitled thereto.25 (emphasis ours)
To be sure, if the NLRC’s findings had been arrived at arbitrarily or in
disregard of the evidence on record, the CA would have been right and
could have granted the petition for certiorari on the finding that the
NLRC made a factual finding not supported by substantial
evidence.26 The CA, in fact, did not appear to have looked into these
matters and did not at all ask whether the NLRC’s findings on the
awarded monetary benefits were supported by substantial evidence.
This omission, however, did not render the NLRC’s ruling defective as
Jimenez v. NLRC, et al.27 teaches us that –
On the first issue, we find no reason to disturb the findings of
respondent NLRC that the entire amount of commissions was not paid,
this by reason of the evident failure of herein petitioners to present
evidence that full payment thereof has been made. It is a basic rule in
evidence that each party must prove his affirmative allegations. Since
the burden of evidence lies with the party who asserts an affirmative
allegation, the plaintiff or complainant has to prove his affirmative
allegation, in the complaint and the defendant or respondent has to
prove the affirmative allegations in his affirmative defenses and
counterclaim. Considering that petitioners herein assert that the
disputed commissions have been paid, they have the bounden duty to
prove that fact.
As a general rule, one who pleads payment has the burden of proving
it.1âwphi1 Even where the plaintiff must allege non-payment, the
general rule is that the burden rests on the defendant to prove
payment, rather than on the plaintiff to prove non-payment. The debtor
has the burden of showing with legal certainty that the obligation has
been discharged by payment.
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 a
defense to the claim of the creditor. Where the debtor introduces some
evidence of payment, the burden of going forward with the evidence –
as distinct from the general burden of proof – shifts to the creditor, who
is then under a duty of producing some evidence to show non-
payment.28 (emphases ours, citations omitted)
Thus, even without proof of nonpayment, the NLRC was right in
requiring the payment of the 13th month pay and the salaries due after
the LA’s decision until the illegally dismissed petitioner was reinstated
in the payroll, i.e., from December 13, 2000 to January 21, 2001. It
follows that the CA was wrong when it concluded that the NLRC acted
outside its jurisdiction by including these monetary awards as items for
execution.
These amounts are not excluded from the concept of backwages as
the salaries fell due after Gonzales should have been reinstated, while
the 13th month pay fell due for the same period by legal mandate.
These are entitlements that cannot now be glossed over if the final
decision on the merits in this case were to be respected.
The Legal Obstacle: the prohibition
on 2nd motion for reconsideration
The above discussions unavoidably lead to the conclusion that the
Court’s Minute Resolutions denying Gonzales’ petition were not
properly issued and are tainted by the nullity of the CA decision these
Resolutions effectively approved. We do not aim to defend these
actions, however, by mechanically and blindly applying the principle of
immutability of judgment, nor by tolerating the CA’s inappropriate
application of this principle. The immutability principle, rather than
being absolute, is subject to well-settled exceptions, among which is its
inapplicability when a decision claimed to be final is not only
erroneous, but null and void.
We cannot also be oblivious to the legal reality that the matter before
us is no longer the validity of Gonzales’ dismissal and the legal
consequences that follow – matters long laid to rest and which we do
not and cannot now disturb. Nor is the matter before us the additional
monetary benefits that Gonzales claims in his petition, since these
essentially involve factual matters that are beyond a Rule 45 petition to
rule upon and correct.
The matter before us – in the Rule 45 petition questioning the CA’s
Rule 65 determination – is the scope of the benefits awarded by the
LA, as modified on appeal and ultimately affirmed by this Court, which
ruling has become final and which now must be implemented as a
matter of law.
Given these considerations, to reopen this case on second motion for
reconsideration would not actually embroil the Court with changes in
the decision on the merits of the case, but would confine itself solely to
the issue of the CA’s actions in the course of determining lack or
excess of jurisdiction or the presence of grave abuse of discretion in
reviewing the NLRC’s ruling on the execution aspect of the case.
Additionally, while continued consideration of a case on second motion
for reconsideration very strongly remains an exception, our action in
doing so in this case is not without sound legal justification.29 An order
of execution that varies the tenor of a final and executory judgment is
null and void.30 This was what the CA effectively did – it varied the final
and executory judgment of the LA, as modified on appeal and
ultimately affirmed by the Court. We would simply be enforcing our own
Decision on the merits of the original case by nullifying what the CA
did.
Viewed in these lights, the recognition of, and our corrective action on,
the nullity of the CA’s ruling on the current petition is a duty this Court
is under obligation to undertake pursuant to Section 1, Article VIII of
the Constitution. We undertake this corrective action by restoring what
the CA should have properly recognized to be covered by the Decision
on the merits of the original case.
WHEREFORE, premises considered, in lieu of our Minute Resolutions
of November 16, 2011 and February 27, 2012 which we hereby vacate,
we hereby PARTIALLY GRANT the petition and DIRECT the payment
of the following deficiencies in the payments due petitioner Leo
Gonzales under the Labor Arbiter’s Order of August 18, 2009:
1. 13th month pay for the years 2000 and 2001;
2. Additional backwages from December 13, 2000 until January 21,
2001; and
3. 12% interest on the total judgment award from the time of the
judgment’s finality on July 12, 2005 until the total award is fully paid.
The Labor Arbiter is hereby DIRECTED to issue the appropriate writ of
execution incorporating these additional awards to those reflected in
his Order of August 18, 2009.
Costs against respondents Solid Cement Corporation and Allen
Querubin.
SO ORDERED
FIRST DIVISION
G.R. No. 154559 October 5, 2011
THE LAW FIRM OF RAYMUNDO A. ARMOVIT, Petitioner,
vs.
COURT OF APPEALS and BENGSON COMMERCIAL BUILDING,
INC., Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
Petitioner Law Firm of Raymundo A. Armovit (Armovit Law Firm)
captioned the present action as a "Petition and/or Motion for
Execution." As a Petition for Certiorari, petitioner assails the
Resolutions of the Court of Appeals in CA-G.R. CV No. 43099 dated
November 28, 1996,1 August 27, 20012 and June 11, 2002,3 as well as
the Orders of the Regional Trial Court (RTC) of San Fernando, La
Union in Civil Case No. 2794 dated February 24 and June 7, 1993. As
a Motion for Execution, petitioner seeks the execution of the 1991
Decision of this Court in G.R. No. 90983, entitled Law Firm of
Raymundo A. Armovit v. Court of Appeals.4
On August 20, 1965 and November 23, 1971, Bengson Commercial
Building, Inc. (BCBI) obtained loans from the Government Service
Insurance System (GSIS) in the total amount of ₱4,250,000.00,
secured by real estate and chattel mortgages. When BCBI defaulted in
the payment of the amortizations, GSIS extrajudicially foreclosed the
mortgaged properties and sold them at public auction where it
emerged as the highest bidder.5
With the Armovit Law Firm as its counsel, BCBI filed an action to annul
the extrajudicial foreclosure on June 23, 1977 with the then Court of
First Instance (CFI) of La Union. The action was docketed as Civil
 13
Case No. 2794. After trial, the CFI, by then renamed Regional Trial
Court, rendered a Decision: (1) nullifying the foreclosure of BCBI’s
mortgaged properties; (2) ordering the cancellation of the titles issued
to GSIS and the issuance of new ones in the name of BCBI; (3)
ordering BCBI to pay GSIS ₱900,000.00 for the debenture bonds; and
(4) directing GSIS to (a) restore to BCBI full possession of the
foreclosed properties, (b) restructure the ₱4.25 Million worth of loans at
the legal rate of interest from the finality of the judgment, (c) pay BCBI
₱1.9 Million representing accrued monthly rentals and ₱20,000.00
rental monthly until the properties are restored to BCBI’s possession,
and (d) pay the costs.6
GSIS appealed to the Court of Appeals. The appeal was docketed as
CA-G.R. CV No. 09361. It appears that the Armovit Law Firm ceased
to be the counsel of BCBI sometime before the appeal of GSIS. The
said law firm and BCBI dispute the legality of the replacement, with
BCBI claiming that the Armovit Law Firm had been remiss in its duties
as BCBI’s counsel.
On January 19, 1988, the Court of Appeals affirmed the RTC Decision
with modification. The dispositive portion of the Decision of the
appellate court reads:
WHEREFORE, we affirm the appealed decision with MODIFICATION,
as follows:
1. The foreclosure and auction sale on February 10, 1977 of
BENGSON's properties covered by real estate and chattel mortgages
mentioned in the notice of sale issued by the La Union provincial sheriff
are set aside.
2. The writ of possession issued to GSIS as the highest bidder by the
defunct Court of First Instance, sitting as a cadastral court, as a
consequence of said foreclosure sale, is annulled.
3. The Register of Deeds of La Union is ordered to cancel the present
certificates of title covering those properties and issue new ones in lieu
thereof in the same names and with the same annotations, terms and
conditions, including the mortgage in question, as appeared (sic) in the
previous certificates of title as of the date BENGSON constituted the
mortgage on those properties in favor of GSIS, it being understood that
all expenses to be incurred incidental to such title cancellation and
issuance shall be borne by GSIS.
4. GSIS is ordered to restore to BENGSON full possession of those
mortgaged properties situated in San Fernando, La Union.
5. All properties under the mortgage in question, including those
parcels of land situated in San Fernando, La Union and in Quezon
City, shall remain under mortgage in favor of GSIS.
6. GSIS is ordered to restructure BENGSON's loan as promised, the
restructuring to proceed from the premise that as of the foreclosure
date, i.e. February 10, 1977, BENGSON had paid GSIS an aggregate
amount of ₱286,000.00 on the subject loan.
7. The interest rates per annum stated in the first and second mortgage
loan contracts entered into between BENGSON and GSIS, as well as
all other terms and conditions provided for therein — except as
qualified by the subsequent agreement of the parties regarding the
promised loan restructuring and deferment of foreclosure by reason of
the arrearages incurred — shall remain as originally stipulated upon by
the parties.
8. BENGSON is ordered to pay GSIS the debenture bond with an
aggregate face value of ₱900,000.00 at the stipulated interest rate of
14% per annum, quarterly; and to pay 14% interest per annum,
compounded monthly, on the interest on said debenture bond, that had
become due quarterly, in accordance with the stipulations provided for
therein.
9. GSIS shall reimburse BENGSON the monthly rent of ₱20,000.00
representing income produced by one of the latter's mortgaged
properties, i.e., the Regent Theatre building, from February 15, 1977
until GSIS shall have restored the full possession of said building,
together with the land on which it stands, to BENGSON.
10. The entire record of this case is ordered remanded to the trial court
and the latter is directed to ascertain whether such mortgaged
properties as machineries, equipment, and other movie paraphernalia,
etc., are in fact no longer in existence per report of the provincial
sheriff, as well as to determine their replacement value if GSIS fails to
return them; and, as prayed for by BENGSON, to receive evidence
from the parties on the costs of suit awarded to it.
No pronouncement as to cost of this appeal. (Emphasis supplied.)7
The Decision of the Court of Appeals became final and executory on
February 10, 1988 and the records were remanded to the court a quo
on March 14, 1988. The GSIS did not file a Motion for Reconsideration
or an appeal therefrom.8
The subsequent proceedings were summarized by this Court in its
Decision in G.R. No. 90983,9 which is now the subject of petitioner’s
Motion for Execution:
It x x x appears that when Atty. Armovit sought execution with the court
a quo, he was informed by Romualdo Bengzon, president of the
respondent corporation, that the firm had retained the services of Atty.
Pacifico Yadao. He was also informed that the company would pay him
the agreed compensation and that Atty. Yadao's fees were covered by
a separate agreement. The private respondent, however, later ignored
his billings and over the phone, directed him allegedly not to take part
in the execution proceedings. Forthwith, he sought the entry of an
attorney's lien in the records of the case. The lower court allegedly
refused to make the entry and on the contrary, issued an order
ordering the Philippine National Bank to "release to the custody of Mr.
Romualdo F. Bengzon and or Atty. Pacifico Yadao" the sum of
₱2,760,000.00 (ordered by the Court of Appeals as rentals payable by
the Government Service Insurance System).
Atty. Armovit then moved, apparently for the hearing of his motion to
recognize attorney's lien, and thereafter, the trial court issued an order
in the tenor as follows:
When this case was called for hearing on the petition to record
attorney's charging lien, Attys. Armovit and Aglipay appeared for the
petitioners.
Atty. Armovit informed the Court that they are withdrawing the petition
considering that they are in the process of amicably settling their
differences with the plaintiff, which manifestation was confirmed by
Atty. Yadao as well as the plaintiffs, Romualdo Bengson and Brenda
Bengson, who are present today.
In view of this development, the petition to record attorney’s charging
lien, the same being in order and not contrary to law, morals and public
policy, as prayed for by Attys. Armovit and Aglipay, it is hereby
withdrawn. The parties, therefore are hereby directed to comply
faithfully with their respective obligations.
SO ORDERED.
However, upon the turnover of the money to the private respondent,
Mrs. Brenda Bengson (wife of Romualdo Bengson) delivered to Atty.
Armovit the sum of ₱300,000.00 only. Atty. Armovit protested and
demanded the amount of ₱552,000.00 (twenty percent of
₱2,760,000.00), for which Mrs. Bengson made assurances that he will
be paid the balance.
On November 4, 1988, however, Atty. Armovit received an order
emanating from the trial court in the tenor as follows:
During the hearing on the petition to record attorney's charging lien on
October 11, 1988, Attys. Armovit and Aglipay withdrew their petition to
record attorney's charging lien, which was duly approved by the Court,
after which the Court directed the parties to comply faithfully with their
respective obligations.
In compliance with the Order of this Court, the plaintiff submitted a
pleading denominated as compliance alleging that petitioner (Atty.
Armovit) has already received from the plaintiff the sum of
₱300,000.00, Philippine Currency, as and by way of attorney’s fees.
With the receipt by the petitioner from the plaintiff of this amount, the
latter has faithfully complied with its obligation.
WHEREFORE, the Order of this Court dated October 11, 1988
approving the withdrawal of the petition to record attorney’s charging
lien, on motion of the petitioner, is now final.
SO ORDERED.
Reconsideration having been denied, Atty. Armovit went to the Court of
Appeals on a petition for certiorari and prohibition.
On August 25, 1989, the Court of Appeals rendered judgment
dismissing the petition. Reconsideration having been likewise denied
by the Appellate Court, Atty. Armovit instituted the instant appeal. 10
This Court rendered its Decision in the foregoing case on September
27, 1991. The relevant portions of the Decision, including the fallo
thereof, are quoted hereunder:
The disposition of the Court of Appeals was that since the receipt
evidencing payment to Atty. Armovit of the sum of ₱300,000.00 "was
 14
without any qualification as 'advance' or 'partial' or 'incomplete'," the
intention of the parties was that it was full payment. The Appellate
Court also noted Atty. Armovit's withdrawal of his motion to record
attorney's lien and figured that Atty. Armovit was satisfied with the
payment of ₱300,000.00.
The only issue is whether or not Atty. Armovit is entitled to the sum of
₱252,000.00 more, in addition to the sum of ₱300,000.00 already paid
him by the private respondent.
There is no question that the parties had agreed on a compensation as
follows:
a) ₱15,000.00 by way of acceptance and study fee, payable within five
(5) days from date;
b) 20% contingent fee computed on the value to be recovered by
favorable judgment in the cases; and
c.) the execution and signing of a final retainer agreement complete
with all necessary details.
(While the parties' agreement speaks of "a final retainer agreement" to
be executed later, it does not appear that the parties did enter into a
"final" agreement thereafter.)
The private respondent's version however is that while it may be true
that the agreed compensation was twenty percent of all recoveries, the
parties later agreed on a compromise sum approved allegedly by the
trial court, per its Order of October 11, 1988.
xxxx
Contingent fees are valid in this jurisdiction. It is true that attorney's
fees must at all times be reasonable; however, we do not find Atty.
Armovit's claim for "twenty percent of all recoveries" to be
unreasonable. In the case of Aro v. Nañawa, decided in 1969, this
Court awarded the agreed fees amid the efforts of the client to deny
him fees by terminating his services. In parallel vein, we are upholding
Atty. Armovit's claim for ₱252,000.00 more — pursuant to the
contingent fee agreement — amid the private respondent's own
endeavours to evade its obligations.
xxxx
WHEREFORE, premises considered, the petition is GRANTED. The
private respondent is ORDERED to pay the petitioner the sum of
₱252,000.00. Costs against the private respondent. 11
Neither party filed a Motion for Reconsideration from the Decision of
this Court. Thus, the Decision became final and executory on
December 17, 1991.12
On October 29, 1992, the Armovit Law Firm filed in Civil Case No.
2794 an Omnibus Motion praying, among other things, that a final
assessment of its attorney’s fees be computed at 20% on the value of
all the properties recovered by BCBI, deducting the amount already
paid which is 20% of the money judgment for ₱1,900,00.00; and that a
writ of execution for the full payment of the balance of its attorney’s
fees be issued.13
On February 24, 1993, the RTC issued the first assailed Order denying
the Armovit Law Firm’s Omnibus Motion. The RTC held that the issue
regarding attorney’s fees had already been resolved by this Court in
G.R. No. 90983, whereby this Court ordered BCBI to pay the Armovit
Law Firm the sum of ₱252,000.00, in addition to the ₱300,000.00
already paid. The RTC noted that the Decision of this Court had long
become final and executory and in fact, was already executed upon the
payment of the sum of ₱252,000.00. The RTC also stressed that the
Armovit Law Firm had no more participation in the prosecution of the
case before the appellate court, as BCBI was, by then, already
represented by another counsel. Thus, according to the RTC, it would
constitute unjust enrichment to grant the Armovit Law Firm attorney’s
fees despite having no more participation in the case.14
The Armovit Law Firm filed a Motion for Reconsideration, which was
denied by the RTC on June 7, 1993.15
The Armovit Law Firm appealed the Orders of the RTC to the Court of
Appeals. The appeal was docketed as CA-G.R. CV No. 43099.
When the Court of Appeals became repeatedly unsuccessful in
securing the original records of Civil Case No. 2794 due to the
progress of the execution of the same in the trial court, the appellate
court, in the first assailed Resolution dated November 28, 1996,
directed Atty. Raymundo Armovit to submit a certified copy of the
complete original records at his expense.16 Atty. Armovit filed a Motion
for Reconsideration praying that BCBI be ordered to defray the costs of
the copying of the pertinent records, as he has no responsibility
whatsoever for the delay. Atty. Armovit added that the photocopying of
the records would be futile as there was still the need to await the
termination of the proceedings before the trial court.17 On April 24,
2001, the Court of Appeals received a letter from the Officer-in-Charge
of the RTC informing the appellate court of the pendency before this
Court of G.R. No. 137448 and G.R. No. 141454, which were both
connected with the execution of the Decision in Civil Case No. 2794.
Due to all of the foregoing circumstances, the Court of Appeals issued
on August 27, 2001 the second assailed Resolution ordering that CA-
G.R. CV No. 43099 be archived temporarily pending receipt of the
original records of Civil Case No. 2794.18 The Armovit Law Firm’s
Motion for Reconsideration was denied in the third assailed Resolution
dated June 11, 2002.19
On September 9, 2002, the Armovit Law Firm filed the present action
captioned "Petition and/or Motion for Execution," a joint Petition for
Certiorari and Motion for Execution, with the following prayer:
WHEREFORE, petitioner respectfully prays that the instant petition for
certiorari be given due course and, after due proceedings, judgment be
rendered setting aside as null and void ab initio the respondent courts
Orders dated February 24 and June 7, 1993 (Annexes A and B) and
Resolutions dated November 28, 1996, August 27, 2001 and June 11,
2002 (Annexes C, D and E); and ordering respondent trial court as
follows:
1. To immediately issue a writ of execution of the final and executory
Decision of September 29, 1991, of the Supreme Court in Law Firm of
Raymundo A. Armovit vs. Court of Appeals, et al. (G.R. No. 90983) on
the twenty percent of all recoveries on the following:
a. All the mortgaged properties recovered by private respondent from
the GSIS by annotating petitioner’s charging lien at the back of their
corresponding titles.
b. The ₱29,982,824.19 received by private respondent on September
26, 1994, as per Sheriff’s Return dated October 3, 1994 (Annex EE),
plus the legal rate of interest from such date until fully paid.
2. To assess the value of the real properties recovered by private
respondent from the GSIS and apply petitioner’s charging lien by
deducting therefrom the sum of ₱552,000.00 priorly applied to the
accumulated rentals recovered from GSIS by private respondent. After
the assessment and determination of the value of petitioner’s twenty
percent of all recoveries to cause the execution thereof.20
According to the Armovit Law Firm, the RTC and the Court of Appeals
committed the following legal errors:
I.
THE TRIAL COURT ERRED IN VARYING THE FINAL AND
EXECUTORY SUPREME COURT D E C I S I O N BY LIMITING THE
EXECUTION OF PETITIONER’S ATTORNEY’S FEES OF "TWENTY
PERCENT OF ALL RECOVERIES" ONLY TO THE RENTALS AND
EXCLUDING THE REST OF THE RECOVERIES MADE BY THE
BENGSONS.
II.
THE COURT OF APPEALS ERRED IN SENDING PETITIONER’S
APPEAL TO THE ARCHIVES.
III.
THE APPELLATE AND TRIAL COURTS ERRED IN DEFYING THE
SUPREME COURT IN ITS FINAL AND EXECUTORY D E C I S I O N
AWARDING PETITIONER A CONTINGENT FEE OF "TWENTY
PERCENT OF ALL RECOVERIES."21
The present action is devoid of merit.
For convenient reference, the dispositive portion of the judgment
sought to be executed, namely our Decision in G.R. No. 90983, is re-
quoted as follows:
WHEREFORE, premises considered, the petition is GRANTED. The
private respondent is ORDERED to pay the petitioner the sum of
₱252,000.00. Costs against the private respondent. 22
As can be readily observed, the Court ordered the payment of the sum
of ₱252,000.00, nothing more, nothing less. While the body of the
Decision quoted the agreement of the parties stating the compensation
as "20% contingent fee computed on the value to be recovered by
favorable judgment on the cases,"23 this Court specifically ordered
BCBI to pay the Armovit Law Firm the aforementioned sum only, in
addition to the ₱300,000.00 already paid. BCBI was therefore held to
 15
be liable for the total amount of ₱552,000.00, representing 20% of the
₱2,760,000.00 received by BCBI as rental payments from GSIS.
Significantly, the order upon GSIS to reimburse BCBI for rental
payments constitutes the only monetary award in favor of BCBI in the
final and executory Decision in CA-G.R. CV No. 09361.24 This Court
confined its award to the said sum despite the fact that the Armovit
Law Firm prayed for a much greater amount in its Memorandum:
WHEREFORE, petitioner respectfully prays for judgment declaring
respondent trial court’s orders (Annexes "N" and "Q") and respondent
Court of Appeals’ confirmatory decisions (Annexes "R" and "T") null
and void ab initio, and instead directing that petitioner be paid his
attorney’s fees of 20% of all monies and properties received and to be
received by respondent BCBI in consequence of the final judgment
secured for them by petitioner (Annex "E" in rel. annex "G"), as follows
– for ‘twenty percent of all recoveries’ to be unreasonable."32 All things
a) 20% of ₱2,760,000.00, the rental arrearages due and already
received by BCBI, which amounts to ₱552,000.00, minus the
₱300,000.00 paid unto petitioner, or a net balance of ₱252,000.00 due
petitioner;
b) 20% of ₱15 million, the market value of the commercial lots, multi-
story buildings and residential lots and houses, already placed in
BCBI’s possession, which amounts to ₱3,000,000.00 still due
petitioner; and
c) 20% of ₱20 million worth of hotel and movie machines and
equipment units, centralized air conditioning facilities, etc., to be paid in
cash to BCBI, which amounts to ₱4,000,000.00 in unpaid fees to
petitioner –
or, in the alternative, should trial of facts be deemed appropriate, that
the case be remanded for further proceedings to receive petitioner’s
evidence on the amount of his attorney’s fees due and unpaid, the
same to be presided over by another trial judge chosen by proper
raffle; that respondent judge Genaro Gines be prohibited from any
further intervention in Civil Case No. 2794; and at all events, that treble
costs be fixed and imposed upon respondents.
Petitioner also prays for such other reliefs as may be just and equitable
in the premises.25 (Emphases supplied.)
As stated above, the Armovit Law Firm did not file a Motion for
Reconsideration of the Decision in G.R. No. 90983 to protest the
exclusion in the dispositive portion of several items it specifically
prayed for in its pleadings. The Decision thus became final and
executory on December 17, 1991.26 The Armovit Law Firm cannot now
ask the trial court, or this Court, to execute the Decision in G.R. No.
90983 as if these items prayed for were actually granted.
The Armovit Law Firm, in insisting on its claim, pins its entire case on
the statement in the body of the Decision that "we do not find Atty.
Armovit’s claim for ‘twenty percent of all recoveries’ to be
unreasonable."27 In this regard, our ruling in Grageda v. Gomez 28 is
enlightening:
It is basic that when there is a conflict between the dispositive portion
or fallo of a Decision and the opinion of the court contained in the text
or body of the judgment, the former prevails over the latter. An order of
execution is based on the disposition, not on the body, of the
Decision.1avvphi1 This rule rests on the theory that the fallo is the final
order while the opinion in the body is merely a statement ordering
nothing.
Indeed, the foregoing rule is not without an exception. We have held
that 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. x x x.29
Applying this ruling to the case at bar, it is clear that the statement in
the body of our 1991 Decision (that "we do not find Atty. Armovit’s
claim for ‘twenty percent of all recoveries’ to be unreasonable"30) is not
an order which can be the subject of execution. Neither can we
ascertain from the body of the Decision an inevitable conclusion clearly
showing a mistake in the dispositive portion. On the contrary, the
context in which the statement was used shows that it is premised on
the interpretation that Atty. Armovit’s valid claim is only for an
additional ₱252,000.00 in attorney’s fees:
Contingent fees are valid in this jurisdiction. It is true that attorney's
fees must at all times be reasonable; however, we do not find Atty.
Armovit's claim for "twenty percent of all recoveries" to be
unreasonable. In the case of Aro v. Nañawa, decided in 1969, this
Court awarded the agreed fees amid the efforts of the client to deny
him fees by terminating his services. In parallel vein, we are upholding
Atty. Armovit's claim for ₱252,000.00 more — pursuant to the
contingent fee agreement — amid the private respondent's own
endeavours to evade its obligations.31 (Emphases supplied.)
The confusion created in the case at bar shows yet another reason
why mere pronouncements in bodies of Decisions may not be the
subject of execution: random statements can easily be taken out of
context and are susceptible to different interpretations. When not
enshrined in a clear and definite order, random statements in bodies of
Decisions can still be the subject of another legal debate, which is
inappropriate and should not be allowed in the execution stage of
litigation.
Consequently, the trial court cannot be considered to have committed
grave abuse of discretion in denying the execution of the statement in
the body of our 1991 Decision that "we do not find Atty. Armovit’s claim
considered, it was the interpretation of petitioner Armovit Law Firm, not
that of the trial court, which had the effect of varying the final and
executory Decision of this Court in G.R. No. 90983. The instant Petition
for Certiorari should therefore fail.
WHEREFORE, the Petition is DISMISSED. Costs against petitioner.
SO ORDERED.
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
Chairperson
WE CONCUR:
G.R. No. L-55694 October 23, 1981
ADALIA B. FRANCISCO, ZENAIDA FRANCISCO, ESTER
FRANCISCO, ADELUISA FRANCISCO and ELIZABETH
FRANCISCO, Petitioners, vs. HON. BENIGNO M. PUNO, as
Presiding Judge, Court of First Instance of Quezon, Branch II,
Lucena City and JOSEFINA D. LAGAR Respondents.chanrobles
virtual law library
BARREDO, J.:
Petition for certiorari impugning the resolution of respondent judge of
October 8, 1980 granting private respondent's petition for relief from
the judgment rendered by the same respondent judge on January 8,
1980 in Civil Case No. 8480 of the Court of First Instance of Quezon
which dismissed private respondent's complaint for reconveyance of a
parcel of land and damages. That decision was rendered
notwithstanding the absence of petitioners at the pre-trial by reason of
which they were declared in default. It was based alone on the
testimony of private respondent Josefina D. Lagar and the documents
she presented.chanroblesvirtualawlibrary chanrobles virtual law library
On August 29, 1979, private respondent filed with respondent judge a
complaint for reconveyance of a parcel of land and damages
alleging inter alia that respondent's father caused the land in question
titled in his name alone as "widower", after her mother's death, in spite
of the property being conjugal, and then sold it to the predecessor in
interest of petitioners from whom they bought the
same.chanroblesvirtualawlibrary chanrobles virtual law library
After the defendants, herein petitioners had filed their answer, wherein
they alleged lack of personality of plaintiff to sue, prescription and that
they are buyers in good faith, the case was set for pre-trial, but
petitioners failed to appear thereat. Taking advantage of such absence,
private respondent's counsel move that they be declared in default and
that private respondent, with the assistance of her counsel, Atty.
Pacifico M. Monje, be allowed to present their evidence. The motion
was granted and after presenting her evidence, counsel rested her
case. On the same date, respondent judge rendered judgment finding
the evidence insufficient to sustain the cause of action alleged and
therefore dismissing the complaint. That was on January 8, 1980. On
February 15, 1980, respondent's counsel was served with copy of the
decision. (See Annex G of the petition.) chanrobles virtual law library
On February 16, 1980, private respondent filed, thru a new counsel,
Atty. Bienvenido A. Mapaye, a motion for new trial and/or
reconsideration alleging that the insufficiency of her evidence was due
to the fault of her counsel who presented the same without her being
fully prepared. In other words, she claimed, she had newly discovered
evidence that could prove her cause of action. It is relevant to note that
said motion was signed and sworn to by private respondent herself
together with her counsel.chanroblesvirtualawlibrary chanrobles virtual
law library
Acting on the said motion for new trial and/or reconsideration, on April
28, 1980, respondent judge denied the same for having been filed out
 16
of time. Indeed, from January 15, 1980, when respondent's counsel
was served with the decision, to February 16, 1980, when the motion
was filed, more than 30 days had already elapsed (32 days to be
exact).chanroblesvirtualawlibrary chanrobles virtual law library
Persisting in her effort to pursue her claim, under date of May 7, 1980,
private respondent filed, thru another new counsel, Atty. Ricardo
Rosales, Jr., a petition for relief, purportedly under Rule 38,
claiming: chanrobles virtual law library
1. She filed civil case 8480 for Reconveyance and Damages against
defendants Luis Francisco, et al., on August 29,
1979.chanroblesvirtualawlibrary chanrobles virtual law library
2. The main trust in petitioner's action against defendant was her
unlawful deprivation of one-half of the property covered by TCT No.
2720 and denominated as Lot 4864 of the cadastral survey of Lucena,
as said parcel belongs to the conjugal partnership of Dionisio Lagar
and Gaudencia Daelo, plaintiff-petitioner's immediate predecessor-in-
interest.chanroblesvirtualawlibrary chanrobles virtual law library
3. Gaudencia Daelo having predeceased her husband, petitioner
contends that one-half of the property belongs to her mother and
therefore should rightfully by inherited by her after her mother's death,
but failed however, to inherit any part thereof, because her father sold
the entire parcel to the defendant Luis
Francisco.chanroblesvirtualawlibrary chanrobles virtual law library
4. On January 8, 1980, a pre-trial hearing was scheduled, where
defendants were declared as if in default thereafter an order of default
was issued and plaintiff adduced evidence ex-
parte.chanroblesvirtualawlibrary chanrobles virtual law library
5. On the same date, January 8, 1980, a decision was rendered
dismissing the case after plaintiff took the witness stand, who through
excusable neglect was not able to expound on very vital points and
inadvertently failed to introduce in support of her
theory.chanroblesvirtualawlibrary chanrobles virtual law library
6. Because plaintiff-petitioner was under the belief that the scheduled
hearing was one where no testimony is yet to be taken, coupled by the
fact that she was not prepared to testify, and that it was her first time to
take the witness stand, she did not fully comprehend the questions
propounded to her.chanroblesvirtualawlibrary chanrobles virtual law
library
7. Plaintiff-petitioner filed a Motion for Reconsideration and/or new trial
but was denied in its order dated April 28, 1980, which petitioner
received on May 5,1980.chanroblesvirtualawlibrary chanrobles virtual
law library
8. If plaintiff-petitioner will be allowed to introduce evidence in her
possession, which by excusable neglect and/or mistake were not
introduced, the same will necessarily alter and, or change the decision
in her favor, attached is her affidavit of
merits.chanroblesvirtualawlibrary chanrobles virtual law library
9. Evidence in support of her claim that it is a conjugal property consist
of a deed of sale executed by Manual Zaballero and Germana Ona in
favor of the conjugal partnership of Dionisio Lagar and Gaudencia
Daello (Doc. No. 412; Page No. 55; Book No. 11; Series of 1948 of
Notary Public Francisco Mendioro xerox copy thereof is attached
herewith as Annex "A".chanroblesvirtualawlibrarychanrobles virtual law
library
10. The deed of sale ratified by Notary Public Ramon Ingente (Doc.
No. 68; Page No. 7; Book No. VI; Series of 1955 executed by Dionisio
Lagar should refer only to one-half (1/2) and therefore is annulable in
so far as the other half of the property is
Concerned.chanroblesvirtualawlibrary chanrobles virtual law library
11. That the petition wherein Dionisio Lagar sought [4) change his civil
status was not known personally to the plaintiff-petitioner and/or not
understood by her, otherwise she could have made reservations in that
petition eventually protecting her right insofar as one-half (1/2) of the
property is concerned.chanroblesvirtualawlibrary chanrobles virtual law
library
12. Plaintiff-petitioner has a valid substantial cause of action consisting
of evidence enumerated above, which by excusable negligence or
error was not presented otherwise, the decision will be in favor of the
plaintiff herein petitioner. (Petition for Relief of Judgment, pp. 50-52,
Record
Answering the petition for relief, petitioners maintained that aside from
the fact that no excusable negligence has been alleged, for, on the
contrary, there was an evident effort oil respondent's part to take
advantage of the absence and default of petitioners when respondent
presented her evidence, the petition for relief was filed out of time in
the light of Section 3 of Rule 38, which provides that such a petition
should be " filed within sixty (60) days after the petitioner learns of the
judgment, order or proceeding to be set aside, and not more than six
(6) months after such judgment or order was entered or such
proceeding was taken." chanrobles virtual law library
In his resolution of October 8, 1980 now under question, respondent
judge ruled that: chanrobles virtual law library
Defendants' claim that plaintiff is presumed to have learned of the
judgment of January 8, 1980, either on January 15, 1980 when Atty.
Monje received a copy thereof or on February 15, 1980, when plaintiff
signed the Motion for Reconsideration and/or New Trial prepared by
Atty. Mapaye, in either case, the petition for relief of May 8, 1980 by
Atty. Rosales was resorted to beyond the 60-day period prescribed
under Section 3, Rule 38 of the Rules of Court; from January 15 to May
8 is a period of 114 days and from February 15 to May 8 is a period of
84 days; in either case, the filing of the petition for relief is beyond 60
days from the time plaintiff is presumed to have learned of said
decision of January 8, although, in either or both events, the filing
thereof is admittedly within 6 months from the issuance of said
decision; on the other hand, the plaintiff stated that she did not actually
learn of the decision of January 8, until she received a copy thereof on
March 17, 1980 (p. 67 of Record or Exh. "G") and that she was not
informed of the contents of the motion for new trial and/or
reconsideration on February 15, 1980 when she was made to sign it
(TSN, pp. 20-21, July 28, 1980).chanroblesvirtualawlibrarychanrobles
virtual law library
Q From where did you secure that copy of the decision? chanrobles
virtual law library
A I went to the court myself and secured a copy of the decision. (TSN,
p. 16-id).
xxx xxx xxxchanrobles virtual law library
Q And you are sure of the fact that you only became aware of the
decision in the month of March, 1980?chanrobles virtual law library
A Yes. sir, (TSN, p. 20, Id).
In the light of the circumstances obtaining in this case, it is the opinion
of the Court that it is the date when plaintiff actually learned of the
decision from which she seeks relief that should be considered in
computing the period of 60 days prescribed under Sec. 3, Rule 38 of
the Rules of Court for purposes of determining the timeliness of the
said petition for relief; this opinion finds support in Cayetano vs.
Ceguerra et al., No. L-18831, 13 SCRA, where the Supreme Court, in
effect, held that the date of 'actual knowledge' (and not the presumed
date of receipt or knowledge) of the decision, order or judgment from
which relief is sought shall be the date which should be considered in
determining the timeliness of the filing of a petition for relief; in that
case, the Supreme Court said:
It is conceded that defendants received a first registry notice on
January 13, 1961, but they did not claim the letter, thereby giving rise
to the presumption that five (5) days after receipt of the first notice, the
defendants were deemed to have received the letter. This Court,
however, cannot justly attribute upon defendants actual knowledge of
the decision, because there is no showing that the registry notice itself
contained any indication that the registered letter was a copy of the
decision, or that the registry notice referred to the case being
ventilated. We cannot exact a strict accounting of the rules from
ordinary mortals, like the defendants. (Resolution, pp. 67-68, Record.)
We cannot agree, for two reasons. First, according to Chief Justice
Moran: chanrobles virtual law library
The relief provided for by this rule is not regarded with favor and the
judgment would not be avoided where the party complaining "has, or
by exercising proper diligence would have had, an adequate remedy at
law, or by proceedings in the original action, by motion, petition, or the
like to open, vacate, modify or otherwise obtain relief against, the
judgment." (Fajardo v. Judge Bayona, etc., et al., 52 O.G. 1937; See
Alquesa v. Cavoda L-16735, Oct. 31, 1961, citing 49 C.J.S. 695.) The
remedy allowed by this rule is an act of grace, as it were, designed to
give the aggrieved party another and last chance. Being in the position
of one who begs, such party's privilege is not to impose conditions,
haggle or dilly-dally, but to grab what is offered him. (Palomares, et al.
v. Jimenez, et al., L-4513, Jan. 31, 1952.) (Page 226, Moran,
Comments on the Rules of Court, Vol. 2, 1979 Edition.)
In other words, where, as in this case, another remedy is available, as,
in fact, private respondent had filed a motion for new trial and/or
 17
reconsideration alleging practically the same main ground of the
petition for relief under discussion, which was denied, what respondent
should have done was to take to a higher court such denial. A party
who has filed a timely motion for new trial cannot file a petition for relief
after his motion has been denied. These two remedies are exclusive of
each other. It is only in appropriate cases where a party aggrieved by a
judgment has not been able to file a motion for new trial that a petition
for relief can be filed.chanroblesvirtualawlibrary chanrobles virtual law
library
Second, it is beyond doubt that the petition for relief of private
respondent was filed out of time. We cannot sanction respondent
court's view that the period should be computed only from March 17,
1980 when she claims self-servingly that she first knew of the judgment
because, as stated above, she signed and even swore to the truth of
the allegations in her motion for new trial filed by Atty. Mapaye on
February 16, 1980 or a month earlier. To give way to her accusations
of incompetence against the lawyer who handled her case at the pre-
trial, which resulted in a decision adverse to her despite the absence of
petitioners, and charge again later that her new counsel did not inform
her properly of the import of her motion for new trial and/or
reconsideration is to strain the quality of mercy beyond the breaking
point and could be an unwarranted slur on the members of the bar.
That, however, Atty. Mapaye cud not pursue the proper course after
his motion for new trial was denied is, of course, unfortunate, but We
are unaware of the circumstances of such failure and how much of it
could be attributed to respondent herself, hence We cannot say
definitely Chat it was counsel's fault, chanrobles virtual law library
In any event, We hold that notice to counsel of the decision is notice to
the party for purposes of Section 3 of Rule 38. The principle that notice
to the party, when he is represented by a counsel of record, is not valid
is applicable here in the reverse for the very same reason that it is the
lawyer who is supposed Lo know the next procedural steps or what
ought to be done in law henceforth for the protection of the rights of the
client, and not the latter.chanroblesvirtualawlibrary chanrobles virtual
law library
Under the circumstances, We hold that respondent judge acted beyond
his jurisdiction in taking cognizance of private respondent's petition for
relief and, therefore, all his actuations in connection therewith are null
and void, with the result that his decision of January 8, 1980 should be
allowed to stand, the same having become final and
executory.chanroblesvirtualawlibrary chanrobles virtual law library
ACCORDINGLY, judgment is hereby rendered setting aside the
resolution of respondent judge of October 8, 1980 and reinstating his
decision of January 8, 1980 in Civil Case No. 8480 of his court, which
latter decision may now be executed, the same being already final and
executory. No costs.
Aquino, Concepcion, Jr., Abad Santos and De Castro, JJ., concur.
SECOND DIVISION
CYNTHIA C. ALABAN, G.R. No. 156021
FRANCIS COLLADO, JOSE
P. COLLADO, JUDITH Present:
PROVIDO, CLARITA PROVIDO,
ALFREDO PROVIDO, MANUEL PUNO, J.,
PROVIDO, JR., LORNA DINA Chairman,
E. PROVIDO, SEVERO ARENGA, AUSTRIA-MARTINEZ,
JR., SERGIO ARENGA, EDUARDO CALLEJO, SR.,
ARENGA, CAROL ARENGA, RUTH TINGA, and
BABASA, NORMA HIJASTRO, ' CHICO-NAZARIO, JJ.
DOLORES M. FLORES, ANTONIO
MARIN, JR., JOSE MARIN, SR., and
MATHILDE MARIN, Promulgated:
Petitioners,
September 23, 2005
- versus' - COURT OF APPEALS and
FRANCISCO H. PROVIDO,
Respondents.
x-------------------------------------------------------------------
DECISION
TINGA, J.:
This is a petition for review of the Resolutions [1] of the
Court of Appeals (CA) in CA-G.R. SP No. 69221, [2] dismissing
petitioners' petition for annulment of judgment.
On 8 November 2000, respondent Francisco Provido (respondent) filed
a petition, docketed as SP Proc. No. 00-135, for the probate of the Last
Will and Testament [3] of the late Soledad Provido Elevencionado
(decedent'), who died on 26 October 2000 in Janiuay,
Iloilo. [4] Respondent alleged that he was the heir of the decedent and
the executor of her will. On 30 May 2001, the Regional Trial Court
(RTC), Branch 68, in P.D. Monfort North, Dumangas, Iloilo, rendered
its Decision, [5] allowing the probate of the will of the decedent and
directing the issuance of letters testamentary to respondent. [6]
More than four (4) months later, or on 4 October 2001, herein
petitioners filed a motion for the reopening of the probate
proceedings. [7] Likewise, they filed an opposition to the allowance of
the will of the decedent, as well as the issuance of letters testamentary
to respondent, [8] claiming that they are the intestate heirs of the
decedent. Petitioners claimed that the RTC did not acquire jurisdiction
over the petition due to non-payment of the correct docket fees,
defective publication, and lack of notice to the other heirs. Moreover,
they alleged that the will could not have been probated because: (1)
the signature of the decedent was forged; (2) the will was not executed
in accordance with law, that is, the witnesses failed to sign below the
attestation clause; (3) the decedent lacked testamentary capacity to
execute and publish a will; (4) the will was executed by force and under
duress and improper pressure; (5) the decedent had no intention to
make a will at the time of affixing of her signature; and (6) she did not
know the properties to be disposed of, having included in the will
properties which no longer belonged to her. Petitioners prayed that the
letters testamentary issued to respondent be withdrawn and the estate
of the decedent disposed of under intestate succession. [9]
On 11 January 2002, the RTC issued an Order [10] denying petitioners'
motion for being unmeritorious. Resolving the issue of jurisdiction, the
RTC held that petitioners were deemed notified of the hearing by
publication and that the deficiency in the payment of docket fees is not
a ground for the outright dismissal of the petition. It merely required
respondent to pay the deficiency. [11] Moreover, the
RTC's Decision was already final and executory even before
petitioners' filing of the motion to reopen. [12]
Petitioners thereafter filed a petition [13] with an application for
preliminary injunction with the CA, seeking the annulment of the
RTC's Decision dated 30 May 2001 and Order dated 11 January 2002.
They claimed that after the death of the decedent, petitioners, together
with respondent, held several conferences to discuss the matter of
dividing the estate of the decedent, with respondent agreeing to a one-
sixth (1/6) portion as his share. Petitioners allegedly drafted a
compromise agreement to implement the division of the estate. Despite
receipt of the agreement, respondent refused to sign and return the
same. Petitioners opined that respondent feigned interest in
participating in the compromise agreement so that they would not
suspect his intention to secure the probate of the will. [14] They
claimed that they learnt of the probate proceedings only in July of
2001, as a result of which they filed their motion to reopen the
proceedings and admit their opposition to the probate of the will only
on 4 October 2001. They argued that the RTC Decision should be
annulled and set aside on the ground of extrinsic fraud and lack of
jurisdiction on the part of the RTC. [15]
In its Resolution [16] promulgated on 28 February 2002, the CA
dismissed the petition. It found that there was no showing that
petitioners failed to avail of or resort to the ordinary remedies of new
 18
trial, appeal, petition for relief from judgment, or other appropriate
remedies through no fault of their own. [17] Moreover, the CA declared
as baseless petitioners' claim that the proceedings in the RTC was
attended by extrinsic fraud. Neither was there any showing that they
availed of this ground in a motion for new trial or petition for relief from
judgment in the RTC, the CA added. [18] Petitioners sought
reconsideration of the Resolution, but the same was denied by the CA
for lack of merit. [19]
Petitioners now come to this Court, asserting that the CA committed
grave abuse of discretion amounting to lack of jurisdiction when it
dismissed their petition for the alleged failure to show that they have
not availed of or resorted to the remedies of new trial, appeal, petition
for relief from judgment or other remedies through no fault of their own,
and held that petitioners were not denied their day in court during the
proceedings before the RTC. [20] In addition, they assert that this
Court has yet to decide a case involving Rule 47 of the Rules of Court
and, therefore, the instant petition should be given due course for the
guidance of the bench and bar. [21]
For his part, respondent claims that petitioners were in a position to
avail of the remedies provided in Rules 37 and 38, as they in fact did
when they filed a motion for new trial. [22] Moreover, they could have
resorted to a petition for relief from judgment since they learned of the
RTC's judgment only three and a half months after its
promulgation. [23] Respondent likewise maintains that no extrinsic
fraud exists to warrant the annulment of the RTC's Decision, since
there was no showing that they were denied their day in court.
Petitioners were not made parties to the probate proceedings because
the decedent did not institute them as her heirs. [24] Besides,
assuming arguendo that petitioners are heirs of the decedent, lack of
notice to them is not a fatal defect since personal notice upon the heirs
is a matter of procedural convenience and not a jurisdictional
requisite. [25] Finally, respondent charges petitioners of
forumshopping, since the latter have a pending suit involving the same
issues as those in SP No. 00-135, that is' SP No. 1181 [26] filed before
Branch 23, RTC of General Santos City and subsequently pending on
appeal before the CA in CA-G.R. No.74924. [27]
It appears that one of the petitioners herein, Dolores M. Flores
(Flores'), who is a niece of the decedent, filed a petition for letters of
administration with the RTC of General Santos City, claiming that the
decedent died intestate without any issue, survived by five groups of
collateral heirs. Flores, armed with a Special Power of Attorney from
most of the other petitioners, prayed for her appointment as
administratrix of the estate of the decedent. The RTC dismissed the
petition on the ground of lack of jurisdiction, stating that the probate
court in Janiuay, Iloilo has jurisdiction since the venue for a petition for
the settlement of the estate of a decedent is the place where the
decedent died. This is also in accordance with the rule that the first
court acquiring jurisdiction shall continue hearing the case to the
exclusion of other courts, the RTC added. [28] On 9 January 2002,
Flores filed a Notice of Appeal [29] and on 28 January 2002, the case
was ordered forwarded to the CA. [30]
Petitioners maintain that they were not made parties to the case in
which the decision sought to be annulled was rendered and, thus, they
could not have availed of the ordinary remedies of new trial, appeal,
petition for relief from judgment and other appropriate remedies,
contrary to the ruling of the CA. They aver that respondent's offer of a
false compromise and his failure to notify them of the probate of the will
constitute extrinsic fraud that necessitates the annulment of the RTC's
judgment. [31]
The petition is devoid of merit.
Section 37 of the Rules of Court allows an aggrieved party to file a
motion for new trial on the ground of fraud, accident, mistake, or
excusable negligence. The same
Rule permits the filing of a motion for reconsideration on the grounds'
of excessive award of damages, insufficiency of evidence to justify the
decision or final order, or that the decision or final order is contrary to
law. [32] Both motions should be filed within the period for taking an
appeal, or fifteen (15) days from notice of the judgment or final order.
Meanwhile, a petition for relief from judgment under Section 3 of Rule
38 is resorted to when a judgment or final order is entered, or any other
proceeding is thereafter taken, against a party in any court through
fraud, accident, mistake, or excusable negligence. Said party may file a
petition in the same court and in the same case to set aside the
judgment, order or proceeding. It must be filed within sixty (60) days
after the petitioner learns of the judgment and within six (6) months
after entry thereof. [33]
A motion for new trial or reconsideration and a petition for relief from
judgment are remedies available only to parties' in the proceedings'
where the assailed Judgment is rendered. [34] In fact, it has been held
that a person who was never a party to the case, or even summoned to
appear therein, cannot avail of a petition for relief from judgment. [35]
However, petitioners in this case are mistaken in asserting that they
are not or have not become parties to the probate proceedings.
Under the Rules of Court, any executor, devisee, or legatee named in
a will, or any other person interested in the estate may, at any time
after the death of the testator, petition the court having jurisdiction to
have the will allowed. [36] Notice of the time and place for proving the
will must be published for three (3) consecutive weeks, in a newspaper
of general circulation in the province, [37] as well as furnished to the
designated or other known heirs, legatees, and devisees of the
testator. [38] Thus, it has been held that a proceeding for the probate
of a will is one in rem, such that with the corresponding publication of
the petition the court's jurisdiction extends to all persons interested in
said will or in the settlement of the estate of the decedent. [39]
Publication is notice to the whole world that the proceeding has for its
object to bar indefinitely all who might be minded to make an objection
of any sort against the right sought to be established. It is the
publication of such notice that brings in the whole world as a party in
the case and vests the court with jurisdiction to hear and decide
it. [40] Thus, even though petitioners were not mentioned in the petition
for probate, they eventually became parties thereto as a consequence
of the publication of the notice of hearing.
As parties to the probate proceedings, petitioners could have validly
availed of the remedies of motion for new trial or reconsideration and
petition for relief from judgment. In fact, petitioners filed a motion to
reopen, which is essentially a motion for new trial, with petitioners
praying for the reopening of the case and the setting of further
proceedings. However, the motion was denied for having been filed out
of time, long after the Decision became final and executory.
Conceding that petitioners became aware of the Decision after it had
become final, they could have still filed a petition for relief from
judgment after the denial of their motion to reopen. Petitioners claim
that they learned of the Decision only on 4 October 2001, or almost
four (4) months from the time the Decision had attained finality. But
they failed to avail of the remedy.
For failure to make use without sufficient justification of the said
remedies available to them, petitioners could no longer resort to a
petition for annulment of judgment; otherwise, they would benefit from
their own inaction or negligence. [41]
Even casting aside the procedural requisite, the petition for annulment
of judgment must still fail for failure to comply with the substantive
requisites, as the appellate court ruled.
An action for annulment of judgment is a remedy in law independent of
the case where the judgment sought to be annulled was
rendered. [42] The purpose of such action is to have the final and
executory judgment set aside so that there will be a renewal of
litigation. It is resorted to in cases where the ordinary remedies of new
trial, appeal, petition for relief from judgment, or other appropriate
remedies are no longer available through no fault of the
petitioner, [43] and is based on only two grounds: extrinsic fraud, and
lack of jurisdiction or denial of due process. [44] A person need not be
a party to the judgment sought to be annulled, and it is only essential
 19

that he can prove his allegation that the judgment was obtained by the
use of fraud and collusion and he would be adversely affected
thereby. [45]

An action to annul a final judgment on the ground of fraud lies only if

the fraud is extrinsic or collateral in character. [46] Fraud is regarded
as extrinsic where it prevents a party from having a trial or from
presenting his entire case to the court, or where it operates upon
matters pertaining not to the judgment itself but to the manner in which
it is procured. The overriding consideration when extrinsic fraud is
alleged is that the fraudulent scheme of the prevailing litigant
prevented a party from having his day in court. [47]

To sustain their allegation of extrinsic fraud, petitioners assert that as

a result of respondent's deliberate omission or concealment of their
names, ages and residences as the other heirs of the decedent in his
petition for allowance of the will, they were not notified of the
proceedings, and thus they were denied their day in court. In addition,
they claim that respondent's offer of a false compromise even before
the filing of the petition prevented them from appearing and opposing
the petition for probate.

The Court is not convinced.

According to the Rules, notice is required to be personally given to

known heirs, legatees, and devisees of the testator. [48] A perusal of
the will shows that respondent was instituted as the sole heir of the
decedent. Petitioners, as nephews and nieces of the decedent, are
neither compulsory nor testate heirs [49] who are entitled to be notified
of the probate proceedings under the Rules. Respondent had no legal
obligation to mention petitioners in the petition for probate, or to
personally notify them of the same.

Besides, assuming arguendo that petitioners are entitled to be so

notified, the purported infirmity is cured by the publication of the notice.
After all, personal notice upon the heirs is a matter of procedural
convenience and not a jurisdictional requisite. [50]

The non-inclusion of petitioners' names in the petition and the alleged

failure to personally notify them of the proceedings do not constitute
extrinsic fraud. Petitioners were not denied their day in court, as they
were not prevented from participating in the proceedings and
presenting their case before the probate court.

One other vital point is the issue of forum-shopping against petitioners.

Forum-shopping consists of filing multiple suits in different courts,
either simultaneously or successively, involving the same parties, to
ask the courts to rule on the same or related causes and/or to grant the
same or substantially same reliefs, [51] on the supposition that one or
the other court would make a favorable disposition. [52] Obviously, the
parties in the instant case, as well as in the appealed case before the
CA, are the same. Both cases deal with the existence and validity of
the alleged will of the decedent, with petitioners anchoring their cause
on the state of intestacy. In the probate proceedings, petitioners'
position has always been that the decedent left no will and if she did,
the will does not comply with the requisites of a valid will. Indeed, that
position is the bedrock of their present petition. Of course, respondent
maintains the contrary stance. On the other hand, in the petition for
letters of administration, petitioner Flores prayed for her appointment
as' administratrix of the estate on the theory that the decedent died
intestate. The petition was dismissed on the ground of lack of
jurisdiction, and it is this order of dismissal which is the subject of
review in CA-G.R. No. 74924. Clearly, therefore, there is forum-
shopping.

Moreover, petitioners failed to inform the Court of the said pending

case in their certification against forum- shopping. Neither have they
done so at any time thereafter. The Court notes that even in the
petition for annulment of judgment, petitioners failed to inform the CA
of the pendency of their appeal in CA-G.R. No. 74924, even though the
notice of appeal was filed way before the petition for annulment of
judgment was instituted.

WHEREFORE, the petition is DENIED. Costs against petitioners.

SO ORDERED.