EN BANC [G.R. No. 101783. January 23, 2002] MANILA ELECTRIC COMPANY, Petitioner, v. PHILIPPINE CONSUMERS FOUNDATION, INC.

, EDGARDO S. ISIP, HON. JUDGE MANUEL M. CALANOG, JR., and HON. JUDGE TIRSO D'C. VELASCO, Respondents. DECISION SANDOVAL-GUTIERREZ, J.: Interest republicae ut sit finis litium[1 - it is to the interest of the public that there should be an end to litigation by the same parties and their privies over a subject fully and fairly adjudicated. From this overwhelming concern springs the doctrine of res judicata an obvious rule of reason according stability to judgments. Challenged in this petition for review on certiorari are the a) Decision in Civil Case No. Q-89-3659 dated January 16, 1991 of the Regional Trial Court, Branch 76, Quezon City; [2 and b) its Order dated September 10, 1991[3 denying the motion for reconsideration of the said Decision. The pertinent facts are: On September 11, 1974, former President Ferdinand E. Marcos, with the objective of enabling the grantees of electric franchises to reduce their rates "within the reach of consumers",[4 promulgated Presidential Decree No. 551[5 providing for the reduction from 5% to 2% of the franchise tax paid by electric companies, thus: SECTION 1. Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax payable by all grantees of franchises to generate, distribute and sell electric current for light, heat and power shall be two (2%) of their gross receipts received from the sale of electric current and from transactions incident to the generation, distribution and sale of electric current. On February 5, 1982, the Philippine Consumers Foundation, Inc., (PCFI) filed with the Board of Energy (BOE) a "Petition for Specific Performance, Damages and Violation of P. D. No. 551"[6 against the

Manila Electric Company (Meralco), docketed asBOE Case No. 82198. PCFI sought for the immediate refund by Meralco to its customers of all the savings it realized under P.D. No. 551, through the reduction of its franchise tax from 5% to 2%, with interest at the legal rate; and for the payment of damages and a fine in the amount of P50, 000.00 for violating P.D. 551. It moored its petition on Section 4 of P.D. No. 551 which provides: Sec. 4. All the savings realized by electric franchise holders from the reduction of the franchise tax under Section 1 and tariff reductions and tax credits under Sections 2 and 3, shall be passed on to the ultimate consumer. The Secretary of Finance shall promulgate rules and regulations and devise a reporting systems to carry out the provisions of this Decree. In its answer to the petition, Meralco alleged that it was duly authorized by the BOE in its Order dated March 10, 1980 in BOE Case No. 79-692 to retain the disputed savings; and that the said Order had long become final. On November 25, 1982, the BOE issued its Decision dismissing PCFI's petition, declaring that Meralco was indeed authorized by the BOE, in BOE Case No. 79-692, to retain the disputed savings under P.D. 551, thus: It is at once evident from the foregoing controlling facts and circumstances, particularly the Order of this Board dated March 10, 1980, as confirmed by the reply-letter dated March 3, 1981, that Meralco has been duly authorized to retain the savings realized under the provisions of P.D. 551. The authority granted in the said Order and letter is so clear and unequivocal as to leave any room for contradictory interpretation. This Board, therefore, holds as untenable petitioners claim that respondent Meralco was never authorized under the said Order and letter to hold on to the savings realized under the said decree. "The Board likewise finds to be devoid of merit petitioners contention that pursuant to Opinion No. 140, Series of 1979, of the Minister of Justice, it is absolutely mandatory on the part of respondent Meralco to pass on to its customers the savings under consideration. It must be pointed out that the Order of March 10, 1980 was issued by this Board on the basis of the recommendation contained in the Memorandum dated November 30, 1979 of the Minister of Finance, which was approved by the President of the Philippines in his directive

to this Board dated December 11, 1979 issued thru Presidential Executive Assistant Jacobo Clave. This Board believes and so holds that the approval by the President of the Philippines of the aforesaid Finance Ministrys recommendation had the effects of (a) reversing or modifying the aforementioned Opinion of the Minister of Justice; and (b) confirming the promulgation by the Ministry of Finance, conformably with the specific authority granted it under P.D. No. 551, of an additional rule or regulation for the implementation of the said decree for the guidance of this Board. In issuing the Order of March 10, 1980, therefore, the Board has done no more than follow and be guided by the said additional rule or regulation. "It is noteworthy to mention also that the registered oppositors in BOE Case No. 79-692 (formerly BPW Case No. 72-2146), where the respondent herein originally filed its motion requesting for authority to defer the passing on to its customers of the franchise tax reduction benefits under P.D. No. 551, have done nothing to seek relief from or to appeal to the appropriate forum, the said Order of March 10, 1980. As a consequence, the disposition contained therein have long become final. xxxxxx "That Meralco has been authorized to retain the savings resulting from the reduction of the franchise tax under P.D. No. 551 is, therefore beyond question."[7 (Emphasis supplied) PCFI filed a motion for reconsideration but was denied by the BOE. Hence, PCFI filed a Petition for Certiorari with this Court, docketed as G.R. No. 63018. In a Resolution dated October 22, 1985, this Court dismissed the petition for lack of merit, holding that: We see no grave abuse of discretion warranting the setting aside of the BOE order. "P.D. No. 551 ordered the Minister of Finance to issue implementing rules and regulations. The Minister authorized all grantees of electric franchises, not Meralco alone, whose rates of return on their rate bases were below the legal allowable level to either ask for increased rates or to defer the passing on of benefits under the decree to consumers until just and reasonable returns could be had. Lengthy investigations, audits, hearings, and determinations over practically an eight year period preceded the questioned decision. The petitioners

failed both below and in this petition to successfully refute the facts ascertained in the audits and examinations. The BOE approved option formed the basis of subsequent determinations of Meralco rates and the adopted formula became the basis of computations. When this petition was filed on January 27, 1983, the November 25, 1982 ruling was already final and executory. Moreover, the March 10, 1980 judgment rendered in BOE Case No. 79-692, where Meralco had filed a motion for authority to defer passing on to customers the savings from the reduction of franchise taxes, was not appealed or questioned by the petitioners. Instead, they filed BOE Case No. 82-198 on February 5, 1982 or almost two years later, raising the same issues against the same parties. BOEs questioned decision in Case No. 82-198 used the facts in BOE Case No. 79-692 for its conclusions. Not only had the March 10, 1980 decision confirmed the findings of the Minister of Finance on Meralcos accounts and finances but in filing the second case, the petitioners were asking for a readjudication of the same issues in another challenge to these same findings .x x x.[8 (Emphasis supplied) Four years thereafter, PCFI and a certain Edgardo S. Isip, private respondents herein, filed with respondent Regional Trial Court, Branch 76, Quezon City, a petition for declaratory relief, docketed as Civil Case No. Q-89-3659. Private respondents prayed for a ruling on who should be entitled to the savings realized by Meralco under P.D. No. 551. Once again, they insisted that pursuant to Section 4 of P.D. No. 551, the savings belong to the ultimate consumers. Meralco, in its answer, prayed for the dismissal of the petition on the ground of res judicata, citing this Court's Resolution inG.R. No. 63018 which affirmed the BOE's Decision in BOE Case No. 82-198. On January 16, 1991, respondent RTC rendered the assailed Decision declaring null and void the Resolution of this Court in G.R. No. 63018 and on the basis of the Dissenting Opinion of the late Justice Claudio Teehankee, held that the disputed savings belong to the consumers, thus: Respondent Meralcos theory is devoid of merit. As correctly stated in the dissenting opinion of the late Chief Justice Claudio Teehankee in the October 22, 1985 resolution of the Supreme Court in SC G.R. No. 63018, the decision of the Board of Energy is ultra vires, hence, null and void. x x x.

"It is a well-settled rule in statutory construction that when the law is clear, it leaves no room for interpretation. The memorandum issued by the Minister of Finance which was made the basis of the decision of the Board of Energy has no legal effect because Sec. 4 of P.D. No. 551 is clear and unequivocal. xxxxxx "Since the law is clear, what is left to be done by the administrative body or agency concerned is to enforce the law. There is no room for an administrative interpretation of the law. In the instant case, the Board interpreted PD 551 and chose not only to enforce it but to amend and modify the law on the basis of a Memorandum and the authority issued by the Minister of Finance to all grantees of electricfranchises, not Meralco alone, whose rates of return on their rate basis were below the legal allowable level, to either ask for an increased rates or to defer the passing on of benefits under the decree to consumers, until just and reasonable return could be had. This is beyond the authority granted by PD 551 to the Minister of Finance. PD 551 merely ordered the Minister of Finance to issue implementing rules and regulations. He cannot amend or modify the clear mandate of the law. The act therefore of the Minister of Finance was ultra vires, hence, null and void. Considering that said act became the basis of the Board of Energys decision, it follows that said decision is likewise null and void and the Supreme Court resolution affirming said decision is also null and void having proceeded from a void judgment, hence, cannot be considered as valid judgment that will be a bar to the present action."[9 (Emphasis supplied) Meralco moved for a reconsideration of the above Decision but was denied by respondent court in its Order of September 10, 1991. Hence, Meralco's petition for review on certiorari anchored on the following grounds: "I RESPONDENT JUDGES ERRED IN HOLDING THAT CIVIL CASE NO. 89-3659 IS NOT BARRED BY PRIOR JUDGMENT. II

RESPONDENT JUDGES ERRED IN DECLARING NULL AND VOID A RESOLUTION OF THIS HONORABLE SUPREME COURT. III RESPONDENT JUDGES ERRED IN HOLDING THAT THE REMEDY OF DECLARATORY RELIEF WAS STILL AVAILABLE TO PRIVATE RESPONDENTS. IV RESPONDENT JUDGES ERRED IN NOT DISMISSING THE PETITION FOR DECLARATORY RELIEF."[10 Meralco contends that Civil Case No. Q -89-3659 is already barred by prior judgments, referring to a) this Courts Resolution in G.R. No. 63018 sustaining the BOE's Decision in BOE Case No. 82198; and b) the Order dated March 10, 1980 of the same Board in BOE Case No. 79-692, both holding that Meralco is authorized to retain its savings realized under P.D. 551. Meralco likewise argues that respondent RTC cannot annul the Resolution of this Court in G.R. No. 63018 considering that trial courts cannot set aside decisions of a superior court. And lastly, Meralco maintains that private respondents can no longer avail of the remedy of an action for declaratory relief in view of the rule that such action should be filed before a violation of the statute occurred.[11 In their comment,[12 private respondents argue that this Court's Resolution in G.R. No. 63018 cannot be a bar to Civil Case No. Q-893659 for declaratory relief considering that it did not delve on the essential issue raised in the latter case, i.e., who is entitled to the savings. Further, they claim that public interest would be defeated by the application of res judicata. The petition is meritorious. The issue - whether or not Meralco is duly authorized to retain the savings resulting from the reduction of the franchise tax under P.D. No. 551 as long as its rate of return falls below the 12 % allowable rate recognized in this jurisdiction has long been settled. Thus, the relitigation of the same issue in Civil Case No. Q-89-3659 cannot be sanctioned under the principle ofres judicata.

Res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter settled by judgment.[13 Inres judicata, the judgment in the first action is considered conclusive as to every matter offered and received therein, as to any other admissible matter which might have been offered for that purpose, and all other matters that could have been adjudged therein.[14 For a claim of res judicata to prosper, the following requisites must concur: 1) there must be a final judgment or order; 2) the court rendering it must have jurisdiction over the subject matter and the parties; 3) it must be a judgment or order on the merits; and 4) there must be, between the two cases identity of parties, subject matter and causes of action.[15 All the above requisites are extant in the records and thus, beyond dispute. Re: FIRST REQUISITE - there must be a final judgment: It is beyond question that this Courts Resolution dated October 22, 1985 in G.R. No. 63018, sustaining the BOEs Decision dated November 25, 1982 in BOE Case No. 82-198 which dismissed PCFI's petition, attained finality on December 4, 1985. As a matter of fact, this Court had long ago issued an Entry of Judgment stating that the said Resolution "became final and executory and is x x x recorded in the Book of Entries of Judgements." Prior thereto, or on March 10, 1980, the BOE's Order in BOE Case No. 79-672 became final when the oppositors therein did not appeal. Re: SECOND REQUISITE - the court which rendered the final judgment must have jurisdiction over the subject matter and the parties: There is no question that the BOE has jurisdiction over the subject matter and the parties herein. Under P.D. No. 1206,[16 The BOE is the agency authorized to "regulate and fix the power rates to be charged by electric companies."[17 As such, it has jurisdiction over Meralco, an electric company, and over the savings it realized under P.D. No. 551. It bears stressing that P.D. No. 551 was passed precisely to enable the grantees of electric franchises to reduce their rates within the reach of consumers. Clearly, the matter on how the disputed savings should be disposed of in order to realize a reduction of rates is within the competence of the BOE. Re: THIRD REQUISITE - it must be a judgment or order on the merits:

The BOE's Decision in BOE Case No. 82-198 is a judgment on the merits. A judgment is on the merits when it determines the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical or dilatory objections. After according both parties the opportunities to be heard, the BOE disposed of the controversy by resolving the rights of the parties under P.D. No. 551. In its Decision, the BOE declared in clear and unequivocal manner that Meralco "has been duly authorized to retain the savings realized under the provisions of P.D. No. 551" and that private respondent PCFIs argument to the contrary is "untenable." The BOE's Decision was upheld by this Court in G.R. No. 63018. Re: FOURTH REQUISITE - there must be between the two cases identity of parties, subject matter and causes of action: There is identity of parties between the two cases. BOE Case No. 82198 was a contest between private respondent PCFI, as petitioner, and Meralco, as respondent. Civil Case No. Q-89-3659 involves the same contenders, except that respondent Edgardo Isip joined PCFI as a plaintiff. But his inclusion as such plaintiff is inconsequential. A party by bringing forward, in a second case, additional parties cannot escape the effects of the principle of res judicata when the facts remain the same. Res judicata is not defeated by a minor difference of parties, as it does not require absolute but only substantial identity of parties.[18 The subject matters of BOE Case No. 82-198 and Civil Case No. Q-893659 are likewise identical since both refer to the savings realized by Meralco from the reduction of the franchise tax under P.D. No. 551. The subject matter of an action refers to the thing, wrongful act, contract or property which is directly involved in the action, concerning which the wrong has been done and with respect to which the controversy has arisen.[19 In both cases, the controversy is how the disputed savings shall be disposed of - whether they shall be retained by Meralco or be passed on to the consumers. With respect to identity of causes of action, this requisite is likewise present. In both cases, the act alleged to be in violation of the legal right of private respondents is Meralco's retention of the savings it realized under P.D. No. 551. While it is true that BOE Case No. 82-198 is one for specific performance, while Civil Case No. Q-89-3659 is for declaratory relief - in the ultimate - both are directed towards only one relief, i.e., the refund of the disputed savings to the consumers. To seek a court's declaration on who should benefit from the disputed savings (whether Meralco or the consumers) will result in the

relitigation of an issue fairly and fully adjudicated in BOE Case No. 82198. Clearly, the test of identity of causes of action lies not in the form of an action. The difference of actions in the aforesaid cases is of no moment. The doctrine of res judicata still applies considering that the parties were litigating for the same thing and more importantly, the same contentions.[20 As can be gleaned from the records, private respondents arguments in Civil Case No. Q-89-3659 bear extreme resemblance with those raised in BOE Case No. 82-198. Respondent RTC's Decision granting PCFI and Isip's petition for declaratory relief is in direct derogation of the principle of res judicata. Twice, it has been settled that Meralco is duly authorized to retain the savings it realized under P.D. No. 551 as long as its rate of return falls below the 12% allowable rate. The pronouncement of the BOE in BOE Case No. 82-198 finding such fact to be "beyond question" is clear and not susceptible of equivocation. This pronouncement was sustained by this Court in G.R. No. 63018. In finding no grave abuse of discretion on the part of the BOE, this Court saw the wisdom of its assailed Decision. Thus, this Court held: "[I]n dismissing the petition for specific performance, the BOE authorized Meralco, in lieu of increasing its rates to get a more reasonable return on investments while at the same time refunding to consumers the benefit of P.D. No. 551, to instead defer the passing on of benefits but without the planned increases. Instead of giving back money to consumers and then taking back the same in terms of increased rates, Meralco was allowed by the BOE to follow the more simplified and rational procedure."[21 Private respondents now argue that G.R. No. 63018 merely decreed the postponement of the passing of Meralco's savings to the consumers until it could increase its rate charges. On this point, this Court categorically ruled: "X x x. And finally, as stated by the Solicitor General, if only to put the issue to final rest, BOEs decision authorizing Meralco to retain the savings resulting from the reduction of franchise tax as long as its rate of return falls below the 12% allowable rate is supported by P.D. No. 551, the rules and administrative orders of the Ministry of Finance which had been duly authorized by the decree itself and by directives of the President to carry out the provisions of the decree, and most of all by equitable economic considerations without which the decree would lose its purpose and viability."[22

Corollarily, let it not be overlooked that the purpose of an action for declaratory relief is to secure an authoritative statement of the rights and obligations of the parties under a statute, deed, contract etc. for their guidance in the enforcement thereof, or compliance therewith, and not to settle issues arising from an alleged breach thereof. It may be entertained only beforethe breach or violation of the statute, deed, contract etc., to which it refers.[23 The petition gives a practical remedy in ending controversies which have not reached the stage where other relief is immediately available. It supplies the need for a form of action that will set controversies at rest before they lead to repudiation of obligations, invasion of rights, and the commission of wrongs.[24 Here, private respondents brought the petition for declaratory relief long after the alleged violation of P.D. No. 551. Lastly, we are dismayed by respondent RTC's adherence to the Dissenting Opinion, instead of the Majority Opinion, of the members of this Court in G.R. No. 63018, as well as its temerity to declare a Resolution of this Court "null and void" and "cannot be considered as valid judgment that will be a bar to the present action." A lower court cannot reverse or set aside decisions or orders of a superior court, especially of this Court, for to do so will negate the principle of hierarchy of courts and nullify the essence of review. A final judgment, albeit erroneous, is binding on the whole world. Thus, it is the duty of the lower courts to obey the Decisions of this Court and render obeisance to its status as the apex of the hierarchy of courts. "A becoming modesty of inferior courts demands conscious realization of the position that they occupy in the interrelation and operation of the integrated judicial system of the nation."[25 "There is only one Supreme Court from whose decisions all other courts should take their bearings," as eloquently declared by Justice J. B. L. Reyes. [26 Respondent RTC, and for this matter, all lower courts, ought to be reminded that a final and executory decision or order can no longer be disturbed or reopened no matter how erroneous it may be. Although judicial determinations are not infallible, judicial error should be corrected through appeals, not through repeated suits on the same claim.[27 In setting aside the Resolution and Entry of Judgment of this Court in G.R. No. 63018, respondent court grossly violated basic rules of civil procedure.

In fine, we stress that the rights of Meralco under P.D. No. 551, as determined by the BOE and sustained by this Court, have acquired the character of res judicata and can no longer be challenged. WHEREFORE, the petition is hereby GRANTED. The assailed RTC Decision dated January 16, 1991 and Order dated September 10, 1991 in Civil Case No. Q-89-3659 are REVERSED and SET ASIDE..

date as to when their motion for reconsideration of the RTC order was filed. Hence, in its second assailed resolution[9]dated August 4, 1999, the appellate court denied said motion for reconsideration. The basic issue posed before this Court is whether or not the Court of Appeals erred in dismissing the petition for certiorari filed by petitioners on the ground of formal and procedural deficiency, i.e., the petitioners failure to state a material date in their petition for certiorari. Petitioners contend that it was error for the appellate court to dismiss the petition on grounds of pure technicality. This, they say, undermines the oft-repeated doctrine by this Court that the rules of procedure are used only to help secure, not override, substantial justice[11] considering that the principal appellant is their sevenyear-old son.[12] They boldly assert that technicalities should be set aside in this case on meritorious grounds, There are three material dates that must be stated in a petition for certiorari brought under Rule 65. First, the date when notice of the judgment or final order or resolution was received; second, the date when a motion for new trial or for reconsideration was filed; and third, the date when notice of the denial thereof was received. 16 In the case before us, the petition filed with the CA failed to indicate the second date, particularly the date of filing of their motion for reconsideration. [17] As explicitly stated in the aforementioned Rule, failure to comply with any of the requirements shall be sufficient ground for the dismissal of the petition. The rationale for this strict provision of the Rules of Court is not difficult to appreciate. As stated in Santos vs. Court of Appeals, [18] the requirement is for purpose of determining the timeliness of the petition, thus: The requirement of setting forth the three (3) dates in a petition for certiorari under Rule 65 is for the purpose of determining its timeliness. Such a petition is required to be filed not later than sixty (60) days from notice of the judgment, order orResolution sought to be assailed. Therefore, that the petition for certiorari was filed fortyone (41) days from receipt of the denial of the motion for reconsideration is hardly relevant. The Court of Appeals was not in any position to determine when this period commenced to run and whether the motion for reconsideration itself was filed on time since the material dates were not stated. x x x

Lapid vs Laurea
Petitioners averred that their son was summarily dismissed from school sans notice and hearing. Petitioners denied any knowledge of the alleged letters of complaint filed by the parents whose children were allegedly offended by Christopher. As a result of the strained relations between the Lapids and the school management, Christopher On May 8, 1998, petitioners filed a complaint for damages against the private respondents before the Regional Trial Court (RTC), Malabon, Metro Manila, Branch 169, docketed as Civil Case No. 2839 MN.[2]was transferred to a different school immediately thereafter. On November 18, 1998,[4] petitioners filed a motion to declare respondent school as in default, which motion was denied by the trial court in an order dated February 9, 1999.[5] Petitioners moved for a reconsideration, but said motion was likewise denied on March 11, 1999.[6] With the denial of their motion for reconsideration, petitioners filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 52970. In a resolution June 1, 1999, the appellate court dismissed the petition for failure to indicate the material date, particularly the date of filing of motion for reconsideration with the RTC, as required by Supreme Court Circular No. 39-98, amending Section 3 of Rule 46 of the 1997 Rules of Civil Procedure.[7] In the appellate courts view, this formal requirement is needed to ascertain whether the petition was filed within the reglementary period as provided in Section 4, Rule 65 of the same rules Unfazed, on June 15, 1999, the petitioners filed a motion for reconsideration of the CA resolution, but still without indicating the

PANFILO LACSON, MICHAEL RAY B. AQUINO and CESAR O. MANCAO, petitioners, vs. SECRETARY HERNANDO PEREZ, P/DIRECTOR LEANDRO MENDOZA, and P/SR. SUPT. REYNALDO BERROYA, respondents. [G.R. No. 147781. May 10, 2001] MIRIAM DEFENSOR-SANTIAGO, petitioner, vs. ANGELO REYES, Secretary of National Defense, et al., respondents. [G.R. No. 147799. May 10, 2001] RONALDO A. LUMBAO, petitioner, vs. SECRETARY HERNANDO PEREZ, GENERAL DIOMEDIO VILLANUEVA, P/DIR. LEANDRO MENDOZA and P/SR. SUPT. REYNALDO BERROYA, respondents. [G.R. No. 147810. May 10, 2001] THE LABAN NG DEMOKRATIKONG PILIPINO, petitioner, vs. THE DEPARTMENT OF JUSTICE, SECRETARY HERNANDO PEREZ, THE ARMED FORCES OF THE PHILIPPINES, GENERAL DIOMEDIO VILLANUEVA, THE PHILIPPINE NATIONAL POLICE, and DIRECTOR GENERAL LEANDRO MENDOZA, respondents. RESOLUTION MELO, J.: On May 1, 2001, President Macapagal-Arroyo, faced by an angry and violent mob armed with explosives, firearms, bladed weapons, clubs, stones and other deadly weapons assaulting and attempting to break into Malacaang, issued Proclamation No. 38 declaring that there was a state of rebellion in the National Capital Region. She likewise issued General Order No. 1 directing the Armed Forces of the Philippines and the

Philippine National Police to suppress the rebellion in the National Capital Region. Warrantless arrests of several alleged leaders and promoters of the rebellion were thereafter effected. Aggrieved by the warrantless arrests, and the declaration of a state of rebellion, which allegedly gave a semblance of legality to the arrests, the following four related petitions were filed before the Court(1) G.R. No. 147780 for prohibition, injunction, mandamus, and habeas corpus (with an urgent application for the issuance of temporary restraining order and/or writ of preliminary injunction) filed by Panfilo M. Lacson, Michael Ray B. Aquino, and Cezar O. Mancao; (2) G.R. No. 147781 for mandamus and/or review of the factual basis for the suspension of the privilege of the writ of habeas corpus, with prayer for a temporary restraining order filed by Miriam Defensor-Santiago; (3) G.R. No. 147799 for prohibition and injunction with prayer for a writ of preliminary injunction and/or restraining order filed by Rolando A. Lumbao; and (4) G.R. No. 147810 for certiorari and prohibition filed by the political party Laban ng Demokratikong Pilipino. All the foregoing petitions assail the declaration of a state of rebellion by President Gloria Macapagal-Arroyo and the warrantless arrests allegedly effected by virtue thereof, as having no basis both in fact an in law. Significantly, on May 6, 2001, President Macapagal-Arroyo ordered the lifting of the declaration of a state of rebellion in Metro Manila. Accordingly, the instant petitions have been rendered moot and academic. As to petitioners claim that the proclamation of a state of rebellion is being used by the authorities to justify warrantless arrests, the Secretary of Justice denies that it has issued a particular order to arrest specific persons in connection with the rebellion. He states that what is extant are general instructions to law enforcement officers

and military agencies to implement Proclamation No. 38. Indeed, as stated in respondents Joint Comments: [I]t is already the declared intention of the Justice Department and police authorities to obtain regular warrants of arrests from the courts for all acts committed prior to and until May 1, 2001 which means that preliminary investigators will henceforth be conducted. (Comment, G.R. No. 147780, p. 28; G.R. No. 147781, p. 18; G.R. No. 147799, p. 16; G.R. No. 147810, p. 24) With this declaration, petitioners apprehensions as to warrantless arrests should be laid to rest. In quelling or suppressing the rebellion, the authorities may only resort to warrantless arrests of persons suspected of rebellion, as provided under Section 5, Rule 113 of the Rules of Court, if the circumstances so warrant. The warrantless arrest feared by petitioners is, thus, not based on the declaration of a state of rebellion. Moreover, petitioners contention in G.R. No. 147780 (Lacson Petition), 147781 (Defensor-Santiago Petition), and 147799 (Lumbao Petition) that they are under imminent danger of being arrested without warrant do not justify their resort to the extraordinary remedies of mandamus and prohibition, since an individual subjected to warrantless arrest is not without adequate remedies in the ordinary course of law. Such an individual may ask for a preliminary investigation under Rule 112 of the Rules of court, where he may adduce evidence in his defense, or he may submit himself to inquest proceedings to determine whether or not he should remain under custody and correspondingly be charged in court. Further, a person subject of a warrantless arrest must be delivered to the proper judicial authorities within the periods provided in Article 125 of the Revised Penal Code, otherwise the arresting officer could be held liable for delay in the delivery of detained persons. Should

the detention be without legal ground, the person arrested can charge the arresting officer with arbitrary detention. All this is without prejudice to his filing an action for damages against the arresting officer under Article 32 of the Civil Code. Verily, petitioners have a surfeit of other remedies which they can avail themselves of, thereby making the prayer for prohibition and mandamus improper at this time (Sections 2 and 3, Rule 65, Rules of Court). Aside from the foregoing reasons, several considerations likewise inevitably call for the dismissal of the petitions at bar.
G.R. No. 147780

In connection with their alleged impending warrantless arrest, petitioners Lacson, Aquino, and Mancao pray that the appropriate court before whom the informations against petitioners are filed be directed to desist from arraigning and proceeding with the trial of the case, until the instant petition is finally resolved. This relief is clearly premature considering that as of this date, no complaints or charges have been filed against any of the petitioners for any crime. And in the event that the same are later filed, this court cannot enjoin criminal prosecution conducted in accordance with the Rules of Court, for by that time any arrest would have been in pursuance of a duly issued warrant. As regards petitioners prayer that the hold departure orders issued against them be declared null and void ab initio, it is to be noted that petitioners are not directly assailing the validity of the subject hold departure orders in their petition. The are not even expressing intention to leave the country in the near future. The prayer to set aside the same must be made in proper proceedings initiated for that purpose. Anent petitioners allegations ex abundante ad cautelam in support of their application for the issuance of a writ of habeas corpus, it is manifest that the writ is not called for since its purpose is to relieve petitioners from unlawful restraint (Ngaya-

an v. Balweg, 200 SCRA 149 [1991]), a matter which remains speculative up to this very day.
G.R. No. 147781

The petition herein is denominated by petitioner DefensorSantiago as one for mandamus. It is basic in matters relating to petitions for mandamus that the legal right of the petitioner to the performance of a particular act which is sought to be compelled must be clear and complete. Mandamus will not issue the right to relief is clear at the time of the award (Palileo v. Ruiz Castro, 85 Phil. 272). Up to the present time, petitioner Defensor-Santiago has not shown that she is in imminent danger of being arrested without a warrant. In point of fact, the authorities have categorically stated that petitioner will not be arrested without a warrant.
G.R. No. 147799

several factors which are not always accessible to the courts. Besides the absence of testual standards that the court may use to judge necessity, information necessary to arrive at such judgment might also prove unmanageable for the courts. Certain pertinent information necessary to arrive at such judgment might also prove unmanageable for the courts. Certain pertinent information might be difficult to verify, or wholly unavailable to the courts. In many instances, the evidence upon which the President might decide that there is a need to call out the armed forces may be of a nature not constituting technical proof. On the other hand, the President as Commander-in-Chief has a vast intelligence network to gather information, some of which may be classified as highly confidential or affecting the security of the state. In the exercise of the power to call, on-the-spot decisions may be imperatively necessary in emergency situations to avert great loss of human lives and mass destruction of property. xxx

Petitioner Lumbao, leader of the Peoples Movement against Poverty (PMAP), for his part, argues that the declaration of a state of rebellion is violative of the doctrine of separation of powers, being an encroachment on the domain of the judiciary which has the constitutional prerogative to determine or interpret what took place on May 1, 2001, and that the declaration of a state of rebellion cannot be an exception to the general rule on the allocation of the governmental powers. We disagree. To be sure, section 18, Article VII of the Constitution expressly provides that [t]he President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion thus, we held in Integrated Bar of the Philippines v. Hon. Zamora, (G.R. No. 141284, August 15, 2000): xxx The factual necessity of calling out the armed forces is not easily quantifiable and cannot be objectively established since matters considered for satisfying the same is a combination of

The Court, in a proper case, may look into the sufficiency of the factual basis of the exercise of this power. However, this is no longer feasible at this time, Proclamation No. 38 having been lifted.
G.R. No. 147810

Petitioner Laban ng Demoktratikong Pilipino is not a real partyin-interest. The rule requires that a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision so as to warrant an invocation of the courts jurisdiction and to justify the exercise of the courts remedial powers in his behalf (KMU Labor Center v. Garcia, Jr., 239 SCRA 386 [1994]). Here, petitioner has not demonstrated any injury to itself which would justify resort to the Court. Petitioner is a juridical person not subject to arrest. Thus, it cannot claim to be threatened by a warrantless

arrest. Nor is it alleged that its leaders, members, and supporters are being threatened with warrantless arrest and detention for the crime of rebellion. Every action must be brought in the name of the party whose legal right has been invaded or infringed, or whose legal right is under imminent threat of invasion or infringement. At best, the instant petition may be considered as an action for declaratory relief, petitioner claiming that its right to freedom of expression and freedom of assembly is affected by the declaration of a state of rebellion and that said proclamation is invalid for being contrary to the Constitution. However, to consider the petition as one for declaratory relief affords little comfort to petitioner, this Court not having jurisdiction in the first instance over such a petition. Section 5[1], Article VIII of the Constitution limits the original jurisdiction of the Court to cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, andhabeas corpus. WHEREFORE, premises considered, the petitions are hereby DISMISSED.

Judge of Branch 87, Regional Trial Court of Quezon City and RAMON P. NADAL, respondents. U.P. Office of Legal Services for petitioners. Bonifacio A. Alentajon for private respondent.

ROMERO, J.: In an effort to make the University of the Philippines (U.P.) truly the university of the people, the U.P. administration conceptualized and implemented the socialized scheme of tuition fee payments through the Socialized Tuition Fee and Assistance Program (STFAP), popularly known as the "Iskolar ng Bayan" program. Spawned by the public clamor to overcome what was perceived as the sharpening elitist profile of the U.P studentry, the STFAP aspired to expand the coverage of government educational subsidies so as to include the deserving in the lower rungs of the socio-economic ladder. After broad consultations with the various university constituencies by U.P. President Jose V. Abueva, the U.P. Board of Regents issued on April 28, 1988 a Resolution establishing the STFAP. A year later, it was granted official recognition when the Congress of the Philippines allocated a portion of the National Budget for the implementation of the program. In the interest of democratizing admission to the State University, all students are entitled to apply for STFAP benefits which include reduction in fees, living and book subsidies and student assistantships which give undergraduate students the opportunity to earn P12.00 per hour by working for the University. Applicants are required to accomplish a questionnaire where, among others, they state the amount and source of the annual income of the family, their real and personal properties and

G.R. No. 110280 October 12, 1993 UNIVERSITY OF THE PHILIPPINES BOARD OF REGENTS and DR. OLIVIA C. CAOILI in her capacity as Secretary of the Board, petitioners, vs. HON. ELSIE LIGOT-TELAN in her capacity as Presiding

special circumstances from which the University may evaluate their financial status and need on the basis of which they are categorized into brackets. At the end the application form, the student applicant, as well as his parent, signs a sworn statement, as follows: Statement of the Student I hereby certify, upon my honor, that all the data and information which I have furnished are accurate and complete. I understand that any willful misinformation and/or withholding of information will automatically disqualify me from receiving any financial assistance or subsidy, and may serve as ground for my expulsion from the University. Furthermore, is such misinformation and/or withholding of information on my part is discovered after I have been awarded tuition scholarship or any form of financial assistance, I will be required to reimburse all financial benefits plus the legal rate of interest prevailing at the time of the reimbursement without prejudice to the filing of charges against me. (Emphasis supplied for emphasis) Moreover, I understand that the University may send a factfinding team to visit my home/residence to verify the veracity of the information provided in this application and I will give my utmost cooperation in this regard. I also understand that my refusal to cooperate with the fact-finding team may mean suspension of withdrawal of STFAP benefits and privileges. Student's Signature Statement of the Applicant's Parent or Guardian I hereby certify to the truthfulness and completeness of the information which my son/daughter/dependent has furnished in this application together with all the documents attached. I further recognize that in signing this application form, I share with my son/daughter/dependent the responsibility for the

truthfulness and completeness of the information supplied herein. (Emphasis supplied for emphasis) Moreover, I understand that the University may send a factfinding team to visit my home/residence to verify the information provided in this application and I will give my utmost cooperation in this regard. I also understand that my refusal to cooperate with the fact-finding team may mean suspension or withdrawal of STFAP benefits and privileges of my son/daughter/dependent. Parent's/Legal Guardian's/Spouse's Signature 1 From the early stages of its implementation, measures were adopted to safeguard the integrity of the program. One such precautionary measure was the inclusion as one of the punishable acts under Section 2 (a) of the Rules and Regulations on Student Conduct and Discipline of the University the deliberate falsification or suppression/withholding of any material information required in the application form. To further insure the integrity of the program, a random sampling scheme of verification of data indicated in a student's application form is undertaken. Among those who applied for STFAP benefits for School Year 1989-90 was Ramon P. Nadal, a student enrolled in the College of Law. On March 14, 1991, a team composed of Arsenio L. Dona and Jose Carlo Manalo conducted a home investigation at the residence of Nadal at 31 Twinpeaks Drive, Blue Ridge, Quezon City. Ms. Cristeta Packing, Nadal's aunt, was interviewed and the team submitted a home visit report. Consolacion Urbino, Scholarship Affairs Officer II, found discrepancies between the report and Nadal's application form. Forthwith, she and Bella M. Villanueva, head of the Office of Scholarships and Student

Services, presented the matter to the Diliman Committee on Scholarships and Financial Assistance. 2 In compliance with the said Committee's directive, Bella Villanueva wrote Nadal informing him that the investigation showed that he had failed to declare, not only the fact that he had been maintaining a 1977 Corolla car which was owned by his brother but also the income of his mother who was supporting his brothers Antonio and Federico. Nadal was likewise informed that the Diliman Committee had reclassified him to Bracket 9 (from Bracket 4), retroactive to June 1989, unless he could submit "proofs to the contrary." Nadal was required "to pay back the equivalent amount of full school fees" with "interest based on current commercial rates." Failure to settle his account would mean the suspension of his registration privileges and the withholding of clearance and transcript of records. He was also warned that his case might be referred to the Student Disciplinary Tribunal for further investigation. 3 On July 12, 1991, Nadal issued a certification stating, among other things, that his mother migrated to the United States in 1981 but because her residency status had not yet been legalized, she had not been able to find a "stable, regular, wellpaying employment." He also stated that his mother, jointly with his brother Virgilio, was shouldering the expenses of the college education of his two younger brothers. 4 Noting further discrepancies between Nadal's application form and the certification, the U.P. charged Nadal before the Student Disciplinary Tribunal (SDT) on August 23, 1991 with the following: That respondent RAMON P. NADAL (UP Student No. 83-11640), a student of the College of Law, UP System, Diliman, Quezon City, and STFAP (ISKOLAR NG BAYAN) recipient (Bracket 4 for SY 1989-1990; Bracket 5 for SY 1990-1991) in his applications for STFAP (ISKOLAR NG BAYAN) benefits which he filed for schoolyear 1989-1990, and schoolyear 1990-1991, with the

Office of Scholarship and Student Services (formerly Scholarship and Financial Assistance Service) voluntarily and willfully withheld and did not declare the following: (a) That he has and maintains a car (Toyota Corolla, Model 1977); and (b) The income of his mother (Natividad Packing Nadal) in the U.S.A., in support of the studies of his brothers Antonio and Federico, which acts of willfully withholding information is tantamount to acts of dishonesty in relation to his studies, in violation of paragraph (a), Section 2, of the Rules and Regulations on Student Conduct and Discipline, as amended. (Approved by the B.O.R. at its 876th meeting on 02 September 1976, amended at the 923rd B.O.R. meeting on 31 January 1980, and further amended at its 1017th B.O.R. meeting on 08 December 1988). 5 On October 27, 1992, after hearing, the SDT 6 rendered a decision in SDT Case No. 91-026 exculpating Nadal of the charge of deliberately withholding in his STFAP application form information that he was maintaining a Toyota Corolla car, but finding him guilty of "wilfully and deliberately withholding information about the income of his mother, who is living abroad, in support of the studies of his brothers Antonio and Federico, 7 which is tantamount to acts of dishonesty in relation to his studies in violation of paragraph [a], Section 2 of the Rules [now covered by paragraph (i), Section 2 of the Rules, as amended 25 June 1992]." As such, the SDT imposed upon Nadal the penalty of expulsion from the University and required him to reimburse all STFAP benefits he had received but if he does not voluntarily make reimbursement, it shall be "effected by the University thru outside legal action." 8 The SDT decision was thereafter automatically elevated to the Executive Committee of U.P. Diliman for review pursuant to Sec. 20 of the U.P. Rules on Student Conduct and Discipline. On November 26, 1992, the Executive Committee, voting 13:4,

affirmed the decision of the SDT; whereupon, Nadal appealed to the Board of Regents (BOR). The appeal was included in the agenda of the BOR meeting on January 25, 1993. 9 On January 18, 1993, upon her assumption to the Chairmanship of the Senate Committee on Education, thereby making her automatically a member of the BOR, Senator Leticia RamosShahani wrote the BOR a letter expressing her view that, after a close review of Nadal s case by her legal staff, "it is only fair and just to find Mr. Nadal's appeal meritorious and his arguments worthy of belief. Consequently, he should be allowed to graduate and take the bar examinations this year." 10 At its January 25, 1993 meeting, the BOR affirmed the decision of the SDT but because "the Board was willing to grant a degree of compassion to the appellant in view of the alleged status and predicament of the mother as an immigrant 'TNT' in the United States," the penalty was modified "from Expulsion to One YearSuspension, effective immediately, plus reimbursement of all benefits received from the STFAP, with legal interest." The BOR also decided against giving Nadal, a certification of good moral character. 11 Nadal forthwith filed a motion for reconsideration of the BOR decision, allegedly against the advice of his counsel.12 The motion was placed on the agenda of the February 25, 1993 meeting of the BOR. A day before said date, Senator Shahani wrote the BOR another letter requesting that deliberation on Nadal's case be deferred until such time as she could attend a BOR meeting. On March 15, 1993, the U.P. filed an opposition to Nadal's motion for reconsideration. Thereafter, the BOR held a special meeting to accommodate the request of Regent Shahani with Nadal's case as the sole item on its agenda. Again, Nadal's motion for reconsideration was included in the March 23, 1993 agenda but in view of the absence of Senator Shahani, the decision thereon was deferred.

At the special meeting of the BOR on March 28, 1993 at the Board Room of the Manila Polo Club in Forbes Park, Makati, Regent Antonio T. Carpio raised the "material importance" of verifying the truth of Nadal's claim that earlier, he was a beneficiary of a scholarship and financial aid from the Ateneo de Manila University (AdeMU). Learning that the "certification issued by the AdeMU that it had not given Nadal financial aid while he was a student there was made through a telephone call," Regent Carpio declared that there was as yet "no direct evidence in the records to substantiate the charge." According to Carpio, if it should be disclosed that Nadal Falsely stated that he received such financial aid, it would be a clear case of gross and material misrepresentation that would even warrant the penalty of expulsion. Hence, he cast a conditional vote that would depend on the verification of Nadal's claim on the matter. U.P. President and concurrently Regent Jose V. Abueva countered by stating that "a decision should not be anchored solely on one piece of information which he considered irrelevant, and which would ignore the whole pattern of the respondent's dishonesty and deception from 1989 which had been established in the investigation and the reviews." He added that "the respondent's eligibility for his AdeMU high school scholarship and financial assistance from 1979 to 1983 does not in any way establish that he is 'not guilty as charged' before the SDT," since the formal charges against him do not include withholding of information regarding scholarship grants received from other schools. At the said March 28, 1993 special meeting, the Board decided to go into executive session where the following transpired: The Chairman of the Board, together with the President, directed the Secretary to reflect in the minutes of the meeting the following decisions of the Board in executive session, with only the Board members present.

A vote was held by secret ballot on whether Ramon P. Nadal was guilty or not guilty as charged of willful withholding of information in relation to his application for Socialized Tuition and Financial Assistance Program (STFAP) benefits which he filed for Schoolyears 1989-1990 and 1990-1991 which is tantamount to act of dishonesty in relation to his studies, in violation of paragraph (a), Section 2 of the Rules and Regulations on Student Conduct and Discipline, as amended. The Chairman gave the following results of the Board action during the Executive Session: four (4) voted guilty; three (3) voted not guilty; and three (3) gave conditional votes, pending verification with Father Raymond Holscher of Ateneo de Manila University of Ramon P. Nadal's statement in his STFAP application that he was granted scholarship while he was in high school. Should Ateneo confirm that Nadal had not received financial assistance, then the conditional votes would be considered as guilty, and if otherwise, then not guilty. The Chairman requested the President to make the verification as soon as possible the next day. In answer to a query, the Chairman clarified that once the information was received from Ateneo, there would be no need for another meeting to validate the decision. The President reiterated his objections to the casting of conditional votes. The Chairman himself did not vote.
13

March 29, 1993, non-issuance of any certificate of good moral character during the suspension and/or as long as Nadal has not reimbursed the STFAP benefits he had received with 12% interest per annum from march 30, 1993 and non-issuance of his transcript of records until he has settled his financial obligations with the university. 15 On March 30, 1993, Nadal wrote President Abueva a handwritten letter stating that "after learning of the latest decision" of the BOR, he had been "intensely concentrating on (his) job so that (he) can earn enough to pay for (his) financial obligations to the University." Alleging that he was "now letting nature take its course," Nadal begged President Abueva not to issue any press release regarding the case. 16 However, on April 22, 1993, Nadal filed with the Regional Trial Court of Quezon City a petition for mandamus with preliminary injunction and prayer for a temporary restraining order against President Abueva, the BOR, Oscar M. Alfonso, Cesar A. Buenaventura, Armand V. Fabella and Olivia C. Caoili. The petition prayed: After trial on the merits, judgment be rendered as follows: a. Making the preliminary injunction permanent; b. Ordering respondents 'to uphold and implement their decision rendered on 28 March 1993, exonerating petitioner from all the charges against him, and accordingly dismissing SDT No. 91-026; c. Ordering respondents jointly and severally to pay petitioner litigation expenses of at least P150,000.00. Other just and equitable reliefs are likewise prayed for.
17

In the morning of March 29, 1993, the AdeMU issued a certification to the effect that Nadal was indeed a recipient of a scholarship grant from 1979 to 1983. That evening, the BOR met again at a special meeting at the Westin Philippine Plaza Hotel. According to Regent Carpio, in executive session, the BOR found Nadal "guilty" as the members voted as follows: six members guilty, three members not guilty, and three members abstained. 14Consequently, the BOR imposed on Nadal the penalties of suspension for one (1) year effective

The motion for the issuance of a temporary restraining order and the writ of preliminary injunction was immediately set for hearing. At the May 10, 1993 hearing, the lower court declared

that the only issue to be resolved was "whether or not the respondents in Civil Case No. 93-15665 violated (Nadal's) right to due process when it rendered a decision finding Nadal guilty of the charges against him" during the March 29, 1993 meeting. After the respondents had presented their first witness, Dr. Olivia C. Caoili, the lower court asked respondents' counsel whether they were amenable to maintaining the status quo. Said counsel replied in the negative, asserting the University's prerogative to discipline students found guilty of violating its rules of discipline. 18 On the same day, the lower court
19

Dr. Olivia Caoili and Nadal himself as a hostile witness. On May 29, 1993, the lower court issued the following Order: The petitioner complains that he was not afforded due process when, after the Board Meeting on SDT Case No. 91-026 on March 28, 1993 that resulted in a decision of "NOT GUILTY" in his favor, the Chairman of the U.P. Board of Regents, without notice to the herein petitioner, called another meeting the following day to deliberate on his (the Chairman's) MOTION FOR RECONSIDERATION, which this time resulted in a decision of "GUILTY." While he main issue of violation of due process raised in the petition pends trial and resolution, the petitioner prays for the issuance of a writ of preliminary injunction prohibiting the respondents from further proceeding with SDT Case No. 21026 and from suspending the petitioner for one year. It is a basic requirement in the issuance of the preliminary injunctive writ that there must be a right to be protected. As the issue in the case at bar is due process in the March 29 Board meeting, there is, indeed, a right to be protected for, in administrative proceedings, a respondent's right to due process exists not only at the early stages but also at the final stage thereof. With the circulation to the members of the Board of Regents, as well as to other UP personnel, of the Minutes of the March 29, 1993 meeting, even after this case had already been filed, the Court is convinced that there now exists a threat to the petitioner (respondent in SDT Case No, 91-026) that the decision of the Board of Regents finally finding him guilty of willfully withholding information material to his application for Socialized Tuition and Financial Assistance Program (STFAP) benefits, will be implemented at any time, especially during the enrollment period, and this implementation would work injustice to the petitioner as it would delay him in finishing his course, and, consequently, in getting a decent and good paying job. The injury thus caused would be irreparable.

issued the following Order:

The parties were heard on their respective positions on the incident (application for preliminary injunction and prayer for temporary restraining order and opposition thereto). For lack of material time set this for continuation on May 17 and 18, 1993 both at 2:30 p.m. In the meantime, in order that the proceedings of this case may not be rendered moot and academic, the respondents herein, namely: Jose V. Abueva, President of the University of the Philippines and Vice-Chairman of the U.P. Board of Regents, Oscar M. Alfonso, Cesar A. Buenaventura and Armand V. Fabella, members of the U.P. Board of Regents, Olivia C. Caoili, the officers, agents, representatives, and all persons acting in their behalf, are hereby temporarily restrained from implementing their decision rendered on March 29, 1993 in Administrative SDT Case No. 91-026 entitled University of the Philippines vs. Ramon P. Nadal, as reflected in the Minutes of the 1062nd meeting of the Board of Regents, U.P. held at the Romblon Room, Westin Phil. Plaza, Manila, until further order from this Court. SO ORDERED. Thereafter, Nadal presented as witnesses Regents Emerenciana Y. Arcellana, Ariel P. Tanangonan, Leticia R. Shahani and Antonio T. Carpio. The University, on the other hand, presented

"Damages are irreparable within the meaning of the rule where there is no standard by which their amount can be measured with reasonable accuracy. Where the damage is susceptible of mathematical computation, it is not irreparable." (Social Security Commission v. Bayona, et al., G.R. No. L-13555, May 30, 1962). IN VIEW OF THE FOREGOING, and so as not to render moot the issues in the instant proceedings, let a writ of preliminary injunction be issued restraining the respondents, their officers, agent(s), representatives, and all persons acting in their behalf, from further proceeding with SDT Case No. 91-026, and from suspending petitioner, upon the latter's filing a bond in the amount of P3,000.00. IT IS SO ORDERED.
20

Dispensing with the filing of a motion for reconsideration, the petitioners filed the instant petition for certiorari and prohibition with prayer for the issuance of an injunction or temporary restraining order, raising the following issues: whether or not Nadal was denied due process in the administrative disciplinary proceedings against him, and, whether or not the respondent judge gravely abused her discretion in issuing the May 29, 1993 writ of preliminary injunction thereby preventing the BOR from implementing the suspension penalty it had imposed on Nadal. Before proceeding with the discussion of the merits of the instant petition, we shall confront a threshold issue raised by private respondent, namely, that Dr. Caoili, not having been authorized by the Board of Regents as a collegial body to file the instant petition, and Dr. Abueva, who verified the petition, not being the "Board of Regents" nor "the University of the Philippines," they are not real parties in interest who should file the same. 21 A real party in interest is one "who stands to be benefited or injured by the judgment or the party entitled to the avails of the suit. 'Interest' within the meaning of the rule means material

interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest."22 Undoubtedly, the U.P. Board of Regents has an interest to protect inasmuch as what is in issue here is its power to impose disciplinary action against a student who violated the Rules and Regulations on Student Conduct and Discipline by withholding information in connection with his application for STFAP benefits, which information, if disclosed, would have sufficed to disqualify him from receiving the financial assistance he sought. Such dishonesty, if left unpunished, would have the effect of subverting a commendable program into which the University officials had devoted much time and expended precious resources, from the conceptualization to the implementation stage, to rationalize the socialized scheme of tuition fee payments in order that more students may benefit from the public funds allocated to the State University. Having specifically named Drs. Abueva and Caoili as respondents in the petition for mandamus that he filed below, Nadal is now estopped from questioning their personality to file the instant petition. 23 Moreover, under Sec. 7 of the U.P. Charter (Act 1870) and Sec. 11 of the University Code "all process" against the BOR shall be served on "the president or secretary thereof'." It is in accordance with these legal provisions that Dr. Caoili is named as a petitioner. Necessarily, Dr. Abueva, the University President and member of the BOR, has to verify the petition. It is not mandatory, however, that each and every member of the BOR be named petitioners. As the Court has time and again held, an action may be entertained, notwithstanding the failure to include an indispensable party where it appears that the naming of the party would be but a formality. 24 No longer novel, as this is not a case of first impression, is the issue on the right of an academic institution to refuse admission to a student arising from the imposition upon him of an administrative disciplinary sanction. In our recent decision

in Ateneo de Manila University v. Hon. Ignacio M. Capulong, 25 wherein certain law students were dismissed for hazing resulting in the death of another, we held that the matter of admission of students is within the ambit of academic freedom and therefore, beyond the province of the courts to decide. Certain fundamental principles bear stressing. One of the arguments of Nadal in his petition for mandamus below was that he was denied due process. To clarify, the so-called lack of due process referred only to the March 29, 1993 meeting of the BOR. As stated by respondent's counsel: "What was conceded by undersigned counsel was that Nadal was afforded due process from the start of the administrative proceeding up to the meeting of the Board of Regents on March 28, 1993." 26 With respect to the March 29, 1993 meeting, respondent considers the same as "unquestionably void for lack of due process" inasmuch as he was not sent a notice of said meeting. Counsel cites the ruling in Non v. Dames II 27that imposition of sanctions on students requires "observance of procedural due process," 28 the phrase obviously referring to the sending of notice of the meeting. Attention is drawn to the disparate factual environments obtaining in Non v. Dames II and in the instant case. In the former case, the students were refused admission for having led or participated in student mass actions against the school, thereby posing a collision between constitutionally cherished rights freedom of expression and academic freedom. In the case at bar, Nadal was suspended for having breached the University's disciplinary rules. In the Non case, the Court ruled that the students were not afforded due process for even the refusal to re-enroll them appeared to have been a mere afterthought on part of the school administrators. Here, Nadal does not dispute the fact that his right to due process was held inviolate until the BOR decided to meet on March 29, 1993 with his case as the sole item on the agenda.

In any event it is gross error to equate due process in the instant case with the sending of notice of the March 29, 1993 BOR meeting to respondent. University rules do not require the attendance in BOR meetings of individuals whose cases are included as items on the agenda of the Board. This is not exclusive of students whose disciplinary cases have been appealed to the Board of Regents as the final review body. At no time did respondent complain of lack of notice given to him to attend any of the regular and special BOR meetings where his case was up for deliberation. He would make an exception of the March 29, 1993 meeting for it was "supposed to reconsider the decision made on March 28, 1993 exonerating respondent Nadal from all administrative charges against him." 29 Regent Antonio T. Carpio, in his testimony before the lower court on May 25, 1993 admitted that there was no final verdict at the March 28, 1993 meeting in view of the conditional votes resulting from his assertion that he was "not morally convinced that there was sufficient evidence to make a finding of guilty against Nadal because there was no direct evidence that his mother received income from the United States and this income was sent to the Philippines to support the studies of the children." 30 Two regents shared the view of Regent Carpio, with the following result: four voted guilty, three, not guilty, and three cast conditional votes. The BOR agreed that, upon the suggestion of Regent Carpio, they would still verify from the AdeMU about Nadal's alleged scholarship as a student in said institution. Consequently, no definitive decision was arrived at by the BOR on March 28, 1993, Much less was a verdict of exoneration handed down as averred by respondent. Regent Carpio testified, with respect to the March 29, 1993 meeting where all twelve members of the BOR were present, that all of them participated in the voting held to reconsider the previous day's decision. He stated "I remember Regent Arcellana questioning the voting again on the ground that there was already a final decision, but there was a vote taken on whether a motion for reconsideration can be decided by the

board, and a majority of the board ruled that the matter can be reconsidered again upon motion of the chairman." 31 At said meeting, six (6) regents voted to find respondent guilty, three (3) voted that he was not guilty and three (3) abstained. As succinctly announced by Regent Carpio, the final decision was that which was rendered on March 29, 1993 as "no other decision was made by the Board with respect to the same issue." 32 Counsel for Nadal charged before the lower court that his client was "not given due process in the March 29 meeting because the ground upon which he was again convicted was not the same as the original charge." 33Obviously, he was referring to the basis of the conditional votes on March 28, i.e., whether or not Nadal was telling the truth when he claimed that he received a scholarship grant from the AdeMU. However, Regent Carpio himself testified that the charge considered was "exactly the same charge" of withholding information on the income of Nadal's mother. 34 It should be stressed that the reason why Regent Carpio requested a verification of Nadal's claim that he was a scholar at the AdeMU was that Regent Carpio was not "morally convinced" yet as to the guilt of Nadal. In other words, he sought additional insights into the character of Nadal through the information that would be obtained from the AdeMU. In this regard, we find such information to be irrelevant and a mere superfluity. In his July, 12, 1991 certification aforementioned, Nadal admitted, although inconsistently, that his mother was a "TNT" who could not find a "stable, regular, well-paying employment" but that she was supporting the education of his brothers with the help of another son. To our mind, this constitutes sufficient admission that Nadal withheld information on the income, however measly and irregular, of his mother. Unlike in criminal cases which require proof beyond reasonable doubt as basis for a judgment, in administrative or quasi-judicial proceedings, only substantial evidence is

required, that which means more than a mere scintilla or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise. 35 In light of the foregoing circumstances, we find that Nadal has been sufficiently proven to have violated his undertaking to divulge all information needed when he applied for the benefits of the STFAP. Let it not be forgotten that respondent aspires to join the ranks of the professionals who would uphold truth at all costs so that justice may prevail. The sentinels who stand guard at the portals leading to the hallowed Temples of Justice cannot be overzealous in admitting only those who are intellectually and morally fit. In those who exhibit duplicity in their student days, one spots the shady character who is bound to sow the seeds of chicanery in the practice of his profession. Having reached his senior year, respondent is presumably aware that the bedrock axiom, Canon I, Rule 1.01 of the Code of Professional Responsibility states: "A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct." Further on, Canon 7, Rule 7.01 provides: "A lawyer shall be answerable for knowingly making a false statement or suppressing a material fact in connection with his application for admission to the bar." (Emphasis supplied for emphasis) Surely, it is not too early to warn entrants to the noble profession of law that honesty and integrity are requirements no less weighty than hurdling the Bar examinations. This is the reason why a certification of good moral character is one of the documents that must be submitted in applying to take said examination. In fact, a charge of immoral or deceitful conduct on the part of an applicant, when proved, is a ground for disqualifying him. To revert to the instant case, inasmuch as it has been shown sufficiently that respondent has committed an act of dishonesty

in withholding vital information in connection with his application for STFAP benefits, all in blatant violation of the Rules and Regulations on Student Conduct and Discipline of petitioner University, the latter's inherent power and authority to impose disciplinary sanction may be invoked and rightfully exercised. As a Bohemian proverb puts it: "A school without discipline is like a mill without water." Insofar as the water turns the mill, so does the school's disciplinary power assure its right to survive and continue operating. In more relevant terms, through its power to impose disciplinary sanctions, an educational institution is able to exercise its academic freedom which is, in the case at bar, the right to suspend and refuse admission to a student who has subverted its authority in the implementation of the critically important STFAP. At the risk of being repetitious, the matter of admission to a University is encompassed by the right of academic freedom. In Garcia v. The Faculty Admission Committee, Loyola School of Theology 36 the Court stated that a school or college which is possessed of the right of academic freedom "decides for itself its aims and objectives and how best to attain them. It is free from outside coercion or interference save possibly when the overriding public welfare calls for some restraint. It has a wide sphere of autonomy certainly extending to the choice of students." Elucidating, in Ateneo de Manila University v. Hon. Ignacio M. Capulong, 37 the Court further expounded: Since Garcia v. Loyola School of Theology, we have consistently upheld the salutary proposition that admission to an institution of higher learning is discretionary upon a school, the same being a privilege on the part of the student rather than a right. While under the Education Act of 1982, students have a right "to freely choose their field of study, subject to existing curricula and to continue their course therein up to graduation," such right is subject, as all rights are, to the established

academic and disciplinary standards laid down by the academic institution. For private schools have the right to establish reasonable rules and regulations for the admission, discipline and promotion of students. This right . . . extends as well to parents . . . as parents are under a social and moral (if not legal) obligation, individually and collectively, to assist and cooperate with the schools. Such rules are "incident to the very object of incorporation and indispensable to the successful management of the college. The rules may include those governing student discipline." Going a step further, the establishment of rules governing universitystudent relations, particularly those pertaining to student discipline, may be regarded as vital, if not merely to the smooth and efficient operation of the institution, but to its very survival. Within memory of the current generation is the eruption of militancy in the academic groves as collectively, the students demanded and plucked for themselves from the panoply of academic freedom their own rights encapsulized under the rubric of "right to education" forgetting that, in Hohfeldian terms, they have a concomitant duty, that is, their duty to learn under the rules laid down by the school. (Emphasis supplied.) On the second issue presented for adjudication, the Court finds that the lower court gravely abused its discretion in issuing the writ of preliminary injunction of May 29, 1993. The issuance of the said writ was based on the lower court's finding that the implementation of the disciplinary sanction of suspension on Nadal "would work injustice to the petitioner as it would delay him in finishing his course, and consequently, in getting a decent and good paying job." Sadly, such a ruling considers only the situation of Nadal without taking into account the circumstances clearly of his own making, which led him into such a predicament. More importantly, it has completely disregarded the overriding issue of academic freedom which

provides more than ample justification for the imposition of a disciplinary sanction upon an erring student of an institution of higher learning. From the foregoing arguments, it is clear that the lower court should have restrained itself from assuming jurisdiction over the petition filed by Nadal. Mandamus is never issued in doubtful cases, a showing of a clear and certain right on the part of the petitioner being required. 38 It is of no avail against an official or government agency whose duty requires the exercise of discretion or judgment. 39 Hence, by issuing the writ of preliminary injunction, the lower court dared to tread upon legally forbidden grounds. For, by virtue of the writ, the University's exercise of academic freedom was peremptorily curtailed. Moreover, the door was flung wide open for Nadal to do exactly what the decision of the BOR prohibited him from doing and that is, to violate the suspension order by enrolling for the first semester of 1993-1994. It must have been with consternation that the University officials helplessly watching him complete his academic requirements for taking the Bar. 40 In the event that he be allowed to continue with his studies he would, in effect render moot and academic the disciplinary sanction of suspension legally imposed upon him by the BOR's final decision of March 29, 1993. What is to prevent other aspirants for STFAP scholarships from misleading the University authorities by misrepresenting certain facts or as in instant case, withholding vital information and stating downright falsehoods, in their application forms with impunity? Not only would this undermine the authority of the U.P. to discipline its students who violated the rules and regulations of the institution but, more importantly, subvert the very concept and lofty intent to give financial assistance to poor but deserving students through the STFAP which, incidentally, has not ceased refining and modifying it's operations. WHEREFORE, the instant petition is GRANTED and the lower court is hereby ordered to DISMISS the petition formandamus.

SO ORDERED.

SECURITY BANK CORPORATION (formerly Security Bank and Trust Company), Petitioner, vs.INDIANA AEROSPACE UNIVERSITY, THE BRANCH SHERIFF, Regional Trial Court of Muntinlupa City, Branch 256, and THE REGISTER OF DEEDS OF MAKATI CITY,Respondents. DECISION CARPIO, J.: The Case Before this Court is a petition for review[1] assailing the 22 February 2000 and 29 November 2000 Resolutions[2] of the Court of Appeals in CA-G.R. SP No. 56534. The Court of Appeals denied the petition of Security Bank and Trust Company (Security Bank') for failure to comply with Section 3, Rule 46 of the 1997 Rules of Civil Procedure as amended by Supreme Court Circular No. 39-98.[3] The Antecedent Facts

On 20 September 1996, Security Bank as mortgagee and Innovatech Development and Management Corporation (Innovatech') as mortgagor entered into a real estate mortgage. Innovatech secured itsP25,000,000 loan from Security Bank with a mortgage on fourteen condominium units located at Tito Jovy Tower, Buencamino St., Alabang, Muntinlupa City with Condominium Certificates of Title No. 41863, 41864, 41865, 41866, 41867, 41868, 41869, 41870, 41871, 41872, 41873, 41875, 41876 and 41877 of the Register of Deeds of Makati City. In a letter[4] dated 1 July 1997, Inigo A. Nebrida and Librada C. Nebrida, Innovatech's Vice-President and Treasurer, respectively, informed Security Bank that Innovatech sold the fourteen condominium units to Indiana Aerospace University (Indiana') of Mactan, Cebu. Innovatech provided Security Bank with copies of the Deed of Sale with Assumption of Mortgage[5] it made with Indiana as well as Indiana's loan application with Bank of Southeast Asia for P69,000,000. According to Innovatech, part of the proceeds of Indiana's loan with the Bank of Southeast Asia would be used to pay the loan with Security Bank. The loan with Security Bank matured on 19 September 1997 without payment from either Innovatech or Indiana. Consequently, Security Bank filed a petition for notarial foreclosure of the fourteen condominium units under Act No. 3135,[6] as amended by Act No. 4118. The public auction was held on 29 January 1998, at 10:00 a.m., at the City Hall of Muntinlupa City. During the public auction, the condominium units were sold for P32,839,290 to Security Bank as the only and highest bidder. On 25 February 1998, Innovatech filed an action against Security Bank for Annulment of Extrajudicial Foreclosure Sale and Certificate of Sale, Reconveyance of Properties and Damages with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction. On 26 March 1998, the Regional Trial

Court of Muntinlupa City, Branch 256 (trial court') granted the Writ of Preliminary Injunction in favor of Innovatech. The 26 March 1998 Order became the subject of a petition for certiorari docketed as CA-G.R. SP No. 49326 filed by Security Bank before the Court of Appeals. In its Decision[7] promulgated on 24 August 1999,[8] the Court of Appeals dismissed Security Bank's petition for lack of merit. However, in an Amended Decision promulgated on 8 June 2000, [9] the Court of Appeals set aside its 24 August 1999 Decision and nullified the writ of preliminary injunction issued by the trial court. Innovatech filed a motion for reconsideration of the Amended Decision but the Court of Appeals denied the motion in its Resolution of 19 February 2002.[10] Innovatech filed a petition, docketed as G.R. No. 152157, before this Court. This Court denied the petition in its 10 April 2002 Minute Resolution and denied with finality Innovatech's motion for reconsideration on 6 September 2002. Meanwhile, on 22 June 1998, Indiana filed a Complaint-inIntervention with prayer for the issuance of Temporary Restraining Order and/or Preliminary Prohibitory and Mandatory Injunction. On 1 February 1999, the trial court issued an Order[11] the dispositive portion of which reads: WHEREFORE, the Writ of Preliminary Mandatory Injunction is GRANTED. Subject to the filing of a bond in the amount ofP1,000,000.00 by Plaintiff-Intervenor to pay the damages which Defendant may sustain by reason of the issuance of the Writ of Preliminary Mandatory Injunction, if this Court should finally decide that Plaintiff-Intervenor is not entitled thereto, the Office of the Registry of Deeds of Makati City and any person acting in its behalf, are hereby directed to cancel the registration and annotation of the Certificate of Sale dated January 29, 1998 at the back of Condominium Certificates of Title [N]os. 41863, 41864, 41865, 41866, 41867, 41868, 41869,

41870, 41871, 41872, 41873, 41875, 41876 and 41877 which was inscribed thereon on February 3, 1998 and known as Entry [N]o. 1454/CCT 41863. And since the regularity of the extrajudicial foreclosure proceedings conducted by the Notary Public in connection with the condominium units covered by the aforementioned condominium certificates of title is one of the issues in this case, the Office of the Registry of Deeds and any person acting in its behalf are likewise enjoined and prohibited from subsequently undertaking the registration and annotation of the Certificate of Sale dated January 29, 1998 at the back of Condominium Certificates of Title [N]os. 41863, 41864, 41865, 41866, 41867, 41868, 41869, 41870, 41871, 41872, 41873, 41875, 41876 and 41877 until further order from this Court and trial on the merits of the instant case. Set this case for hearing on the merits on February 12 and 24, 1999 both at 9:30 a.m. SO ORDERED.[12]chanroblesvirtuallawlibrary Security Bank moved for reconsideration of the Order. In its Order[13] of 3 November 1999, the trial court denied Security Bank's motion for lack of merit. Security Bank went to the Court of Appeals for relief. The Resolutions of the Court of Appeals In its assailed Resolution of 22 February 2000,[14] the Court of Appeals denied due course to Security Bank's petition. The Court of Appeals ruled: x x x However, the petition does not indicate the dates when petitioner received a copy of the Order dated 01 February 1999 and when the Motion for Reconsideration was filed in violation of Section 3, Rule 46 of the 1997 Rules of Civil Procedure as amended by Circular 39-98 (Emphasis supplied) which provides:

Sec. 3. Contents and filing of petition; effect of non-compliance with requirements. ' x x x In actions filed under Rule 65, the petition shall further indicate the material dates showing when notice of the judgment or final order or resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was filed and when notice of the denial thereof was received. x x x The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. WHEREFORE, in view of the foregoing, the petition is hereby DENIED DUE COURSE and consequently DISMISSED. SO ORDERED.[15]chanroblesvirtuallawlibrary Security Bank filed a motion for reconsideration. However, in its Resolution of 29 November 2000,[16] the Court of Appeals denied Security Bank's motion. Hence, the recourse to this Court. The Issue The sole issue for resolution is whether the Court of Appeals erred in dismissing Security Bank's petition on mere technicality despite the bank's substantial compliance with Section 3, Rule 46 of the 1997 Rules of Civil Procedure as amended by Circular No. 39-98. Security Bank asserts that the date of filing of the motion for reconsideration appears in the body of the petition. Security Bank likewise contends that the certified true copy of the 1 February 1999 Order attached to the petition clearly shows the stamped date of receipt of the Order. Hence, Security Bank insists that the petition substantially complies with Section 3, Rule 46 of the 1997 Rules of Civil Procedure as amended by Circular No. 39-98.

The Ruling of This Court The petition has merit. Section 3, Rule 46 of the 1997 Rules of Civil Procedure, as amended by Circular No. 39-98, provides: RULE 46 SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. - The petition shall contain the full names and actual addresses of all the petitioners and respondents, a concise statement of the matters involved, the factual background of the case, and the grounds relied upon for the relief prayed for. In actions filed under Rule 65, the petition shall further indicate the material dates showing when notice of the judgment or final order or resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was filed and when notice of the denial thereof was received. It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the respondent with the original copy intended for the court indicated as such by the petitioner, and shall be accompanied by a clearly legible duplicate original or certified true copy of the judgment, order, resolution, or ruling subject thereof, such material portions of the record as are referred to therein, and other documents relevant or pertinent thereto. The certification shall be accomplished by the proper clerk of court or by his duly authorized representative, or by the proper officer of the court, tribunal, agency or office involved or by his duly authorized representative. The other requisite number of copies of the petition shall be accompanied by clearly legible plain copies of all documents attached to the original. The petitioner shall also submit together with the petition a sworn certification that he has not theretofore commenced any

other action involving the same issues in the Supreme Court, the Court of Appeals or different divisions thereof, or any other tribunal or agency; if there is such other action or proceeding, he must state the status of the same; and if he should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals, or different divisions thereof, or any other tribunal or agency, he undertakes to promptly inform the aforesaid courts and other tribunal or agency thereof within five (5) days therefrom. The petitioner shall pay the corresponding docket and other lawful fees to the clerk of court and deposit the amount ofP500.00 for costs at the time of the filing of the petition. The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. The Rules clearly provide that non-compliance with any of the requirements shall be a sufficient ground for the dismissal of the petition. If we apply the Rules strictly, we cannot fault the Court of Appeals for dismissing Security Bank's petition. The Court of Appeals merely followed the Rules. However, in the exercise of its equity jurisdiction this Court may disregard procedural lapses so that a case may be resolved on its merits based on the evidence presented by the parties.[17] Rules of procedure should promote, not defeat, substantial justice. [18] Hence, the Court may opt to apply the Rules liberally to resolve the substantial issues raised by the parties. [19]chanroblesvirtuallawlibrary The material dates required to be stated in the petition for certiorari under Rule 65 are: (1) the date of receipt of the notice of the judgment or final order or resolution;

(2) the date of filing of the motion for new trial or for reconsideration; and (3) the date of receipt of the notice of denial of the motion. [20]chanroblesvirtuallawlibrary Contrary to the Court of Appeals' findings, Security Bank correctly asserted that page 13 of its petition states the date of filing of the motion for reconsideration on 23 February 1999, or thirteen days after the receipt of the Order.[21] The petition also states the date of receipt of notice of denial of the motion for reconsideration filed before the trial court. Hence, the petition only lacked the date of receipt of the trial court's Order of 1 February 1999 that was the subject of the motion for reconsideration. The stamped date on the Order of 1 February 1999 annexed to the petition is not clear enough for the Court of Appeals to determine when Security Bank's counsel received a copy of the Order.[22] However, upon filing its motion for reconsideration before the Court of Appeals, Security Bank attached another copy of the Order of 1 February 1999.[23] This time, the stamped date of receipt of the Order shows that the Security Bank's counsel received the Order on 10 February 1999. When Security Bank furnished the Court of Appeals with the copy of the trial court's Order bearing the stamped date of its receipt, it showed its willingness to rectify its omission. Security Bank, in effect, substantially complied with the Rules. In addition, the trial court would have dismissed the motion for reconsideration outright if Security Bank had filed it late. The trial court's Order of 3 November 1999 does not show that Security Bank filed the motion for reconsideration out of time. The rationale for requiring the statement of material dates is to determine the timeliness of filing of the petition. Clearly, Security Bank filed the motion for reconsideration with the trial court on time. Security Bank also filed the petition before the Court of Appeals within the reglementary period. The Court

reiterates that there is ample jurisprudence holding that the subsequent and substantial compliance of a party may call for the relaxation of the rules of procedure. [24]chanroblesvirtuallawlibrary In the recent case of Great Southern Maritime Services Corporation v. Acua,[25] we held that 'the failure to comply with the rule on a statement of material dates in the petition may be excused since thedates are evident from the records. The more material date for purposes of appeal to the Court of Appeals is the date of receipt of the trial court's order denying the motion for reconsideration, which date is admittedly stated in the petition in the present case. The other material dates may be gleaned from the records of the case if reasonably evident. Thus, in this case the Court deems it proper to relax the Rules to give all the parties the chance to argue their causes and defenses.[26]chanroblesvirtuallawlibrary WHEREFORE, we SET ASIDE the Resolutions of the Court of Appeals dated 22 February 2000 and 29 November 2000. This case is REMANDED to the Court of Appeals which is DIRECTED to reinstate and give due course to the petition in CA-G.R. SP No. 56534, and decide the same on the merits. SO ORDERED. Davide, Jr., C.J., (Chairman), Quisumbing, YnaresSantiago, and Azcuna, JJ., concur.

of public document. They alleged that titles to their properties covered by Transfer Certificates of Title Nos. T-93596, T-87764, and T-87765, were transferred without their knowledge and consent in the name of Torres through a forged Deed of Sale5 dated July 21, 1979. Torres denied the allegations of forgery and claimed that Aguinaldo sold the subject properties to him6 as evidenced by the March 10, 1991 Deed of Absolute Sale.7 Finding probable cause, the OCP recommended the filing of an information for falsification of public document against Torres,8 which was filed before the Metropolitan Trial Court of Manila (MTC), Branch 8, on October 3, 2001. Torres moved for reconsideration9 but was denied.10 On appeal,11 the Secretary of Justice reversed the findings of the investigating prosecutor and ordered the withdrawal of the information.12 The motion for reconsideration filed by Aguinaldo was denied.13 A Motion to Withdraw Information14 was filed which the MTC granted on June 11, 2003.15 It should be noted that petitioner has not been arraigned. Meanwhile, Aguinaldo filed before the Court of Appeals a petition for certiorari16 which was granted in the assailed decision dated March 22, 2004.1avvphi1.net The dispositive portion of the assailed decision reads: WHEREFORE, in view of the foregoing, the petition is GRANTED. The resolutions of the Secretary of Justice dated November 12, 2002 and April 30, 2003 in IS No. 01B-05485 are REVERSED and SET ASIDE. The April 30, 2001 Resolution of the City Prosecutor of Manila finding probable cause against private respondent Artemio Torres, Jr. is REINSTATED. No costs. SO ORDERED.17

ARTEMIO T. TORRES, JR., Petitioner, vs. SPS. DRS. EDGARDO AGUINALDO & NELIA T. TORRESAGUINALDO, Respondents. DECISION YNARES-SANTIAGO, J.: This petition for review on certiorari1 assails the decision2 of the Court of Appeals dated March 22, 2004 in CA-G.R. SP No. 77818, and its resolution3 dated June 28, 2004 denying reconsideration thereof. The facts are as follows: Respondent-spouses Edgardo and Nelia Aguinaldo filed before the Office of the City Prosecutor (OCP) of Manila,4a complaint against petitioner Artemio T. Torres, Jr. (Torres) for falsification

Torres motion for reconsideration was denied,18 hence, the instant petition for review on certiorari19 on the following grounds: I. WHETHER OR NOT THE ORDER OF THE MTC-MANILA DATED 11 JUNE 2003 RENDERED MOOT AND ACADEMIC THE PETITION FOR CERTIORARI UNDER RULE 65 FILED BY RESPONDENTS BEFORE THE COURT OF APPEALS FOR THE PURPOSE OF REINSTATING THE RESOLUTION OF THE OCP-MANILA DATED 30 APRIL 2001. II. WHETHER OR NOT THE COURT OF APPEALS SANCTIONED THE DISREGARD OF SECTION 3, RULE 46 OF THE 1997 RULES OF CIVIL PROCEDURE WHEN IT ENTERTAINED THE PETITION FOR CERTIORARI UNDER RULE 65 FILED BY RESPONDENTS.20 The foregoing assignment of errors may be summarized into three issues: I. Whether the order of the MTC-Manila dated June 11, 2003 granting the motion to withdraw the information rendered moot the petition for certiorari filed by Aguinaldo for the purpose of reinstating the April 30, 2001 resolution of the OCP of Manila; and in the alternative, whether the rule on provisional dismissal under Section 8, Rule 117 applies. II. Whether Aguinaldo committed forum shopping. III. Whether the Court of Appeals erred in finding that the Secretary of Justice gravely abused his discretion in reinstating the April 30, 2001 order of the OCP of Manila finding probable cause against petitioner. Anent the first issue, Torres contends that the order granting the withdrawal of the information rendered moot the petition for certiorari filed before the Court of Appeals. Citing Baares II v. Balising,21 Torres insists that an order dismissing a case without

prejudice is final if no motion for reconsideration or appeal therefrom is timely filed. The contention is untenable. A motion to withdraw information differs from a motion to dismiss. While both put an end to an action filed in court, their legal effect varies. The order granting the withdrawal of the information attains finality after fifteen (15) days from receipt thereof, without prejudice to the re-filing of the information upon reinvestigation. On the other hand, the order granting a motion to dismiss becomes final fifteen (15) days after receipt thereof,with prejudice to the re-filing of the same case once such order achieves finality. In Baares II v. Balising, a motion to dismiss was filed thus putting into place the time-bar rule on provisional dismissal. In the case at bar, a motion to withdraw information was filed and not a motion to dismiss. Hence, Baares II v. Balising would not apply. Unlike a motion to dismiss, a motion to withdraw information is not time-barred and does not fall within the ambit of Section 8, Rule 117 of the Revised Rules of Criminal Procedure which provides that the law on provisional dismissal becomes operative once the judge dismisses, with the express consent of the accused and with notice to the offended party: (a) a case involving a penalty of imprisonment not exceeding six (6) years or a fine of any amount, or both, where such provisional dismissal shall become permanent one (1) year after issuance of the order without the case having been revived; or (b) a case involving a penalty of imprisonment of more than six (6) years, where such provisional dismissal shall become permanent two (2) years after issuance of the order without the case having been revived. There is provisional dismissal22 when a motion filed expressly for that purpose complies with the following requisites, viz.: (1) It must be with the express consent of the accused; and (2) There must be notice to the offended party. Section 8, Rule 117

contemplates the filing of a motion to dismiss, and not a motion to withdraw information. Thus, the law on provisional dismissal does not apply in the present case. Even assuming that the Motion to Withdraw Information is the same as a Motion to Dismiss, we do not find that it complied with the above requisites. The Motion to Withdraw Information was filed by the Assistant City Prosecutor and approved by the City Prosecutor without the conformity of the accused, herein petitioner Torres. Thus, it cannot be said that the motion was filed with his express consent as required under Section 8, Rule 117. Respondent-spouses are not guilty of forum shopping. The cases they filed against petitioner are based on distinct causes of action. Besides, a certificate of non-forum shopping is required only in civil complaints under Section 5, Rule 7 of the Revised Rules of Civil Procedure. In People v. Ferrer,23 we held that such certificate is not even necessary in criminal cases and distinct causes of action. Be that as it may, what is principally assailed is the Court of Appeals decision reversing the resolution of the Justice Secretary and reinstating the April 30, 2001 resolution of the OCP of Manila. The issue, therefore, is whether the Secretary of Justice gravely abused his discretion in reversing the investigating prosecutors findings on the existence of probable cause.1avvphi1.zw+ Section 1, Rule 112 of the Revised Rules of Criminal Procedure defines preliminary investigation as an inquiry or proceeding to determine whether there is sufficient ground to engender a well-founded belief that a crime has been committed and that the respondent is probably guilty thereof, and should be held for trial. The officers authorized to conduct a preliminary investigation are the: (a) Provincial or city fiscals and their assistants; (b) Municipal Trial Courts and Municipal Circuit Trial

Courts Judges; (c) National and Regional state prosecutors; and (d) Such other officers as may be authorized by law.24 Preliminary investigation is executive in character. It does not contemplate a judicial function. It is essentially an inquisitorial proceeding, and often, the only means of ascertaining who may be reasonably charged with a crime. It is not a trial on the merits and has no purpose except to determine whether a crime has been committed and whether there is probable cause to believe that the accused is guilty thereof. It does not place the person against whom it is taken in jeopardy. Generally, preliminary investigation falls under the authority of the prosecutor. However, since there are not enough prosecutors, this function was also assigned to judges of Municipal Trial Courts and Municipal Circuit Trial Courts. Their findings are reviewed by the provincial or city prosecutor whose findings, in turn, may be reviewed by the Secretary of Justice in appropriate cases. After conducting preliminary investigation, the investigating judge must transmit within ten (10) days the resolution of the case together with the entire records to the provincial or city prosecutor.25 In Crespo v. Mogul,26 we underscored the cardinal principle that the public prosecutor controls and directs the prosecution of criminal offenses whose resolutions may be reviewed by the Secretary of Justice.27 We held that where there is a clash of views between a judge who did not investigate and a fiscal who conducted a reinvestigation, those of the prosecutor should normally prevail.28 We ruled in Ledesma v. Court of Appeals29 that when a motion to withdraw an information is filed on the ground of lack of probable cause based on a resolution of the Secretary of Justice, the bounden duty of the trial court is to independently assess the merits of the motion. The judge is not bound by the resolution of the Justice Secretary but must evaluate it before

proceeding with the trial. While the ruling of the Justice Secretary is persuasive, it is not binding on courts. In sum, prosecutors control and direct the prosecution of criminal offenses, including the conduct of preliminary investigation, subject to review by the Secretary of Justice. While his resolution is persuasive, it is not binding on the courts. The trial court must at all times make its own independent assessment of the merits of each case. Thus, it is only where the decision of the Justice Secretary, or the trial court, as the case may be, is tainted with grave abuse of discretion amounting to lack or excess of jurisdiction that the Court of Appeals may take cognizance of the case in a petition for certiorari under Rule 65 of the Revised Rules of Civil Procedure whose decision may then be appealed to this Court by way of a petition for review on certiorari. The Court of Appeals held that the Justice Secretary committed grave abuse of discretion because he based his findings on the lack of probable cause on the 1991 Deed of Sale when what was assailed was the 1979 Deed of Sale.30 It ruled that the defenses raised by Torres should not have been considered during the preliminary investigation but should be threshed out only during trial.31 Only the evidence presented by the complainant should be considered in determining probable cause or the lack thereof. We are not persuaded. The Court of Appeals erred in relying solely on the affidavitcomplaint and the NBI report32 and disregarding totally the counter-affidavit and documentary evidence of petitioner. It is well to note that Section 3, Rule 112 of the Revised Rules of Criminal Procedure not only requires the submission of the complaint and the affidavits of the complainant and his witnesses, as well as other supporting documents, but also directs the respondent to submit his counter-affidavit and that

of his witnesses and other supporting documents relied upon for his defense. Section 4 thereof also mandates the investigating prosecutor to certify under oath in the information that the accused was informed of the complaint and the evidence against him, and that he was given an opportunity to submit controverting evidence. Thus, in determining the existence or absence of probable cause, the investigating officer shall examine the complaint and documents in support thereof as well as the controverting evidence presented by the defense. While the validity and merits of a partys defense or accusation and the admissibility of the testimonies and evidence are best ventilated in a full blown trial, still, in a preliminary investigation, a proper consideration of the complaint and supporting evidence as well as the controverting evidence, is warranted to determine the persons who may be reasonably charged with the crime. The determination must be based on the totality of evidence presented by both parties. Prescinding from these premises, we find that the Justice Secretary did not abuse his discretion in examining both the evidence presented by the complainant and the accused in determining the existence or the lack of probable cause. There is basis in his finding that no probable cause exists. The complaint and the 1979 Deed of Sale do not connect petitioner with the crime of falsification. While the NBI report showed that the 1979 Deed of Sale was falsified, there is no showing that petitioner was the author thereof. We cannot discern direct and personal participation by the petitioner in the alleged forged deed. While a finding of probable cause rests on evidence showing that, more likely than not, a crime has been committed and was committed by the accused, the existence of such facts and circumstance must be strong enough to create a rational and logical nexus between the acts and omissions and the accused.

The allegation that petitioner effectuated the illicit transfer of the disputed properties in his name is without factual basis. He was not in possession of the alleged forged deed which does not even bore his signature. We find merit in his contention that the subject properties were sold to him on March 10, 1991 considering that the new TCTs were issued in his name only on March 26, 1991. His address mentioned in the 1979 Deed of Sale was non-existent yet in 1979, thus giving the impression that it was executed on a later date. It would be absurd for petitioner to use the 1979 Deed of Sale to facilitate the transfer on March 26, 1991 considering his possession of the March 10, 1991 Deed of Sale. Respondents never denied the allegation that they assumed the obligation of transferring the Tanza properties in petitioners name. Considering that they wanted to cancel the sale and that they were in possession of the forged deed, it is not far-fetched to assume that they facilitated the transfer of the properties using the allegedly 1979 forged deed. It appears that the conveyance of the questioned properties in favor of petitioner was made at the instance of the respondents. Torres has no reason to falsify the 1979 Deed of Sale when he had in his possession the 1991 Deed of Sale which he claims to be authentic. By presenting the alleged forged deed of sale, respondents cast a cloud of doubt on petitioners title. While motive is not reasonable basis in determining probable cause, the absence thereof further obviates the probability of petitioners guilt. Besides, Nelia Aguinaldo admitted in her letter dated November 12, 1998 the sale of the properties although she wanted the sale cancelled. This admission is consistent with petitioners declaration that the sale took place. In their complaint, respondents claimed that they discovered the alleged illegal conveyance in November 2000.33This was, however, belied by their Adverse Claim dated December 18,

1999 which appeared as Entry No. 5856-115 and annotated on the new titles issued in the name of Torres in February 2000.34 In November 1998, Nelia was claiming her share in the property that was sold by Torres to Porfirio and Yolanda Dones in 1993.35 In D.M. Consunji, Inc. v. Esguerra,36 grave abuse of discretion is defined: By grave abuse of discretion is meant, such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law. The Secretary of Justice did not whimsically and capriciously exercise his discretion. His findings was grounded on sound statutory and factual basis. Chief Justice Andres Narvasa in his separate opinion in Roberts, Jr. v. Court of Appeals37 declared that the determination of probable cause to warrant the prosecution in court should be consigned and entrusted to the Department of Justice, as reviewer of the findings of the public prosecutors. To do otherwise is to usurp a duty that exclusively pertains to an executive official. In Noblejas v. Salas,38 we reaffirmed the power of supervision and control of the department secretary over his subordinate. We stated that "the power of control therein contemplated means to alter, modify, or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for that of the latter." For, while it is the duty of the fiscal to prosecute persons who, according to evidence received from the complainant, are shown to be guilty of a crime, the Secretary of Justice is likewise bound by his oath of office to protect innocent persons from

groundless, false or serious prosecution. He would be committing a serious dereliction of duty if he orders or sanctions the filing of an information based upon a complaint where he is not convinced that the evidence warrants the filing of the action in court. We also find that the trial court independently assessed the merits of the motion to withdraw information. Before it was granted, respondents were allowed to submit their opposition39 and the petitioner to comment40 thereon, which were both considered. The trial judge also considered the basis of the Justice Secretarys resolution before finding that no probable cause exists, thus: The two DOJ Resolutions absolving the accused from incipient criminal liability were premised on the ground that the herein accused had no participation in the preparation of the alleged falsified Deed of Sale dated July 29, 1979, which deed, in effect, transferred ownership of private complainants three parcels of land located in Tanza, Cavite to the accused. This finding was based on the argument that it would be highly irregular for the accused to effect the transfer of the property through a falsified deed when accused had in his possession a valid and genuine Deed of Sale dated March 10, 1991 executed by the spousescomplainants transferring ownership of the aforesaid property to him. The court is inclined to grant the motion of the public prosecutor. The issues which the court has to resolve in the instant case had been amply discussed in the aforesaid resolutions of the DOJ and it is convinced that, indeed, no probable cause exists against the accused.41 WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated March 22, 2004 isREVERSED and SET ASIDE. The resolution of the Secretary of Justice dated November 12, 2002 isREINSTATED. No costs.

PEDRO MENDOZA, petitioner, vs. RAY ALLAS and GODOFREDO OLORES, respondents.

Allas' appointment as Director III by President Fidel V. Ramos. The pertinent portion of the letter reads: Effective March 4, 1994, Mr. Ray Allas was appointed Director III by President Fidel V. Ramos and as a consequence, [petitioner's] services were terminated without prejudice to [his] claim for all government benefits due [him]. Attached to the letter was the appointment of respondent Ray Allas as "Director III, CIIS, Bureau of Customs, vice Pedro Mendoza." Petitioner wrote the Customs Commissioner demanding his reinstatement with full back wages and without loss of seniority rights. No reply was made. On December 2, 1994, petitioner filed a petition for quo warranto against respondent Allas before the Regional Trial Court, Paranaque, Branch 258. 3 The case was tried and on September 11, 1995, a decision was rendered granting the petition. The court found that petitioner was illegally terminated from office without due process of law and in violation of his security of tenure, and that as he was deemed not to have vacated his office, the appointment of respondent Allas to the same office was void ab initio. The court ordered the ouster of respondent Allas from the position of Director III, and at the same time directed the reinstatement of petitioner to the same position with payment of full back salaries and other benefits appurtenant thereto. Respondent Allas appealed to the Court of Appeals. On February 8, 1996, while the case was pending before said court, respondent Allas was promoted by President Ramos to the position of Deputy Commissioner of Customs for Assessment and Operations. As a consequence of this promotion, Petitioner moved to dismiss respondent's appeal as having been rendered moot and academic. The Court of Appeals granted the motion and dismissed the case accordingly. The order of dismissal

PUNO, J.: Before us, petitioner prays for the execution of the decision of the trial court 1 granting his petition for quo warranto which ordered his reinstatement as Director III, Customs Intelligence and Investigation Service, and the payment of his back salaries and benefits. Petitioner Pedro Mendoza joined the Bureau of Customs in 1972. He held the positions of Port Security Chief from March 1972 to August 1972, Deputy Commissioner of Customs from August 1972 to September 1975, Acting Commissioner of Customs from September 1975 to April 1977 and Customs Operations Chief I from October 1987 to February 1988. 2 On March 1, 1988, he was appointed Customs Service Chief of the Customs Intelligence and Investigation Service (CIIS). In 1989, the position of Customs Service Chief was reclassified by the Civil Service as "Director III" in accordance with Republic Act No. 6758 and National Compensation Circular No. 50. Petitioner's position was thus categorized as "Director III, CIIS" and he discharged the function and duties of said office. On April 22, 1993, petitioner was temporarily designated as Acting District Collector, Collection District X, Cagayan de Oro City. In his place, respondent Ray Allas was appointed as "Acting Director III" of the CIIS. Despite petitioner's new assignment as Acting District Collector, however, he continued to receive the salary and benefits of the position of Director III. In September 1994, petitioner received a letter from Deputy Customs Commissioner Cesar Z. Dario, informing him of his termination from the Bureau of Customs, in view of respondent

became final and entry of judgment was made on March 19, 1996. 4 On May 9, 1996, petitioner filed with the court a quo a Motion for Execution of its decision. On July 24, 1996, the court denied the motion on the ground that the contested position vacated by respondent Allas was now being occupied by respondent Godofredo Olores who was not a party to the quo warranto petition. 5 Petitioner filed a special civil action for certiorari and mandamus with the Court of Appeals questioning the order of the trial court. 6 On November 27, 1997, the Court of Appeals dismissed the petition. 7 Hence, this recourse. Petitioner claims that: The Court of Appeals grossly erred in holding that a writ of execution may no longer be issued, considering that respondent Olores who was not a party to the case now occupies the subject position. 8 The instant petition arose from a special civil action for quo warranto under Rule 66 of the Revised Rules of Court.Quo warranto is a demand made by the state upon some individual or corporation to show by what right they exercise some franchise or privilege appertaining to the state which, according to the Constitution and laws of the land, they cannot legally exercise except by virtue of a grant or authority from the state. 9 In other words, a petition for quo warranto is a proceeding to determine the right of a person to the use or exercise of a franchise or office and to oust the holder from its enjoyment, if his claim is not well-founded, or if he has forfeited his right to enjoy the privilege. 10 The action may be commenced for the Government by the Solicitor General or the fiscal 11 against individuals who usurp a public office, against a public officer whose acts constitute a ground for the forfeiture of his office, and against an association which acts as a

corporation without being legally incorporated. 12 The action may also be instituted by an individual in his own name who claims to be entitled to the public office or position usurped or unlawfully held or exercised by another. 13 Where the action is filed by a private person, he must prove that he is entitled to the controverted position, otherwise respondent has a right to the undisturbed possession of the office. 14 If the court finds for the respondent, the judgment should simply state that the respondent is entitled to the office. 15 If, however, the court finds for the petitioner and declares the respondent guilty of usurping, intruding into, or unlawfully holding or exercising the office, judgment may be rendered as follows: Sec. 10. Judgment where usurpation found. When the defendant is found guilty of usurping, intruding into, or unlawfully holding or exercising an office, position, right, privilege, or franchise, judgment shall be rendered that such defendant be ousted and altogether excluded therefrom, and that the plaintiff or relator, as the case may be, recover his costs. Such further judgment may be rendered determining the respective rights in and to the office, position, right, privilege, or franchise of all the parties to the action as justice requires. If it is found that the respondent or defendant is usurping or intruding into the office, or unlawfully holding the same, the court may order: (1) The ouster and exclusion of the defendant from office; (2) The recovery of costs by plaintiff or relator; (3) The determination of the respective rights in and to the office, position, right, privilege or franchise of all the parties to the action as justice requires. 16 The character of the judgment to be rendered in quo warranto rests to some extent in the discretion of the court and

on the relief sought. the following relief:

17

In the case at bar, petitioner prayed for

WHEREFORE, it is respectfully prayed that respondent be ousted and altogether excluded from the position of Director III, Customs Intelligence and Investigation Service of the Bureau of Customs, and petitioner be seated to the position as the one legally appointed and entitled thereto. Other reliefs, just or equitable in the premises, are likewise prayed for. 18 In granting the petition, the trial court ordered that: WHEREFORE, viewed in the light of the foregoing, judgment is hereby rendered granting this petition for quo warranto by: 1. Ousting and excluding respondent Ray Allas from the position of Director III, Customs Intelligence and Investigation Service of the Bureau of Customs; and 2. Reinstating petitioner Pedro C. Mendoza, Jr. to the position of Director III, Customs Intelligence and Investigation Service of the Bureau of Customs with full back wages and other monetary benefits appurtenant thereto from the time they were withheld until reinstated. 19 The trial court found that respondent Allas usurped the position of "Director III, Chief of the Customs Intelligence and Investigation Service." Consequently, the court ordered that respondent Allas be ousted from the contested position and that petitioner be reinstated in his stead. Although petitioner did not specifically pray for his back salaries, the court ordered that he be paid his "full back wages and other monetary benefits" appurtenant to the contested position "from the time they were withheld until reinstated." The decision of the trial court had long become final and executory, and petitioner prays for its execution. He alleges

that he should have been reinstated despite respondent Olores' appointment because the subject position was never vacant to begin with. Petitioner's removal was illegal and he was deemed never to have vacated his office when respondent Allas was appointed to the same. Respondent Allas' appointment was null and void and this nullity allegedly extends to respondent Olores, his successor-in-interest. 20 Ordinarily, a judgment against a public officer in regard to a public right binds his successor in office. This rule, however, is not applicable in quo warranto cases. 21 A judgment in quo warranto does not bind the respondent's successor in office, even though such successor may trace his title to the same source. This follows from the nature of the writ of quo warranto itself. It is never directed to an officer as such, but always against the person to determine whether he is constitutionally and legally authorized to perform any act in, or exercise any function of the office to which he lays claim. 22 In the case at bar, the petition for quo warranto was filed by petitioner solely against respondent Allas. What was threshed out before the trial court was the qualification and right of petitioner to the contested position as against respondent Ray Allas, not against Godofredo Olores. The Court of Appeals did not err in denying execution of the trial court's decision. Petitioner has apprised this Court that he reached the compulsory retirement age of sixty-five (65) years on November 13, 1997. Reinstatement not being possible, petitioner now prays for the payment of his back salaries and other benefits from the time he was illegally dismissed until finality of the trial court's decision. 23 Respondent Allas cannot be held personally liable for petitioner's back salaries and benefits. He was merely appointed to the subject position by the President of the Philippines in the exercise of his constitutional power as Chief Executive. Neither can the Bureau of Customs be compelled to pay the said back salaries and benefits of petitioner. The

Bureau of Customs was not a party to the petition for quo warranto. 24 IN VIEW WHEREOF, the petition is denied and the decision of the Court of Appeals in CA-G.R. SP No. 41801 is affirmed. SO ORDERED. Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.

This is a petition for review on certiorari of the decision, dated November 16, 1999, and resolution, dated February 23, 2000, of the Court of Appeals reversing the order, dated December 15, 1998, of the Regional Trial Court, Branch 16, Manila and perpetually enjoining it from proceeding with the petitioner's complaint for eminent domain in Civil Case No. 94-72282. The facts are as follows: On December 21, 1993, the City Council of Manila enacted the Ordinance No. 7833, authorizing the expropriation of certain properties in Manila 's First District in Tondo, covered by TCT Nos. 70869, 105201, 105202, and 138273 of the Register of Deeds of Manila, which are to be sold and distributed to qualified occupants pursuant to the Land Use Development Program of the City of Manila. One of the properties sought to be expropriated, denominated as Lot 1-C, consists of 343.10 square meters. It is covered by TCT No. 138272 which was derived from TCT No. 70869 issued in the name of Feliza De Guia.1 After her death, the estate of Feliza De Guia was settled among her heirs by virtue of a compromise agreement, which was duly approved by the Regional Trial Court, Branch 53, Manila in its decision, dated May 8, 1986.2 In 1989, Alberto De Guia, one of the heirs of Feliza De Guia, died, as a result of which his estate, consisting of his share in the properties left by his mother, was partitioned among his heirs. Lot 1-C was assigned to Edgardo De Guia, one of the heirs of Alberto De Guia.3 On April 15, 1994, Edgardo De Guia was issued TCT No. 215593, covering Lot 1-C.4 On July 29, 1994, the said property was transferred to Lee Kuan Hui, in whose name TCT No. 217018 was issued.5

CITY OF MANILA, petitioner, vs. OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA AND ADELAIDA, ALL SURNAMED SERRANO, respondents. Mendoza, J.:

The property was subsequently sold on January 24,1996 to Demetria De Guia to whom TCT No. 226048 was issued.6 On September 26, 1997, petitioner City of Manila filed an amended complaint for expropriation, docketed as Civil Case No. 94-72282, with the Regional Trial Court, Branch 16, Manila,

against the supposed owners of the lots covered by TCT Nos. 70869 (including Lot 1-C), 105201, 105202 and 138273, which included herein respondents Oscar, Felicitas, Jose, Benjamin, Estelita, Leonora, Adelaida, all surnamed are Serrano.7 On November 12, 1997, respondents filed a consolidated answer, in which they alleged that their mother, the late Demetria De Guia, had acquired Lot l-C from Lee Kian Hui; that they had been the bona fide occupants of the said parcel of land for more than 40 years; that the expropriation of Lot l-C would result in their disclosure, it being the only residential land left to them by their deceased mother; and that the said lot was exempt from expropriation because dividing the said parcel of land among them would entitle each of them to only about 50 square meters of land. Respondents, therefore, prayed that judgment be rendered declaring Lot l-C exempt from expropriation and ordering the cancellation of the notice annotated on the back of TCT No. 226048,8 regarding the pendency of Civil Case No. 9472282. for eminent domain filed by petitioner.9 Upon motion by petitioner, the trial court issued an order, dated October 9, 1998, directing petitioner to deposit the amount of Pl,825,241.00 equivalent to the assessed value of the properties.10 After petitioner had made the deposit, the trial court issued another order, dated December 15, 1998, directing the issuance of a writ of possession in favor of petitioner.ll Respondents filed a petition for certiorari with the Court of Appeals, alleging that the expropriation of Lot l-C would render respondents, who are actual occupants thereof, landless; that Lot l-C is exempt from expropriation because R.A. No. 7279 provides that properties consisting of residential lands not exceeding 300 square meters in highly urbanized cities are exempt from expropriations; that respondents would only receive around 49 square meters each after the partition of Lot l-C which consists of only 343.10 square meters; and that R.A. No. 7279 was not meant to deprive an owner of the entire residential land but only that in excess of 300 square meters.12

On November 16, 1999, the Court of Appeals rendered a decision holding that Lot l-C is not exempt from expropriation because it undeniably exceeds 300 square meters which is no longer considered a small property within the framework of R.A. No. 7279. However, it held that in accordance with the ruling in Filstream International Inc. v. Court of Appeals,13 the other modes of acquisition of lands enumerated in 9-10 of the law must first be tried by the city government before it can resort to expropriation. As petitioner failed to show that it had done so, the Court of Appeals gave judgment for respondents and enjoined petitioner from expropriating Lot 1-C. The dispositive portion of its decision reads: WHEREFORE, in view of all the foregoing, the instant petition is hereby GIVEN DUE COURSE and accordingly GRANTED. The Order, dated December 15, 1998, denying petitioner's motion for reconsideration issued by the respondent Regional Trial Court of Manila, Branch 16, in Civil Case No. 94-72282 is hereby REVERSED and SET ASIDE. Let a writ of injunction issue perpetually enjoining the same respondent court from proceeding with the complaint for eminent domain in Civil Case No. 94-72282,14 In its resolution, dated February 23, 2000, the Court of Appeals likewise denied two motions for reconsideration filed by petitioner.l5 Hence this petition. Petitioner contends that the Court of Appeals erred in -1) Giving due course to the petition of the Serranos under Rule 65 notwithstanding its own declaration of the impropriety of the resort to the writ and filing thereof with the wrong appellate court; 2) Concluding that the Order of October 9, 1998 which authorizes the immediate entry of the City as the expropriating agency into the property sough to be expropriated upon the deposit of the provisionally fixed fair market value thereof as tantamount to condemnation of the property without prior

showing of compliance with the acquisition of other lands enumerated in Sec. 9 of R.A. 7279 ergo a violation of due process of the Serranos by the doctrinaire application of FILSTREAM ruling and corrollarily, 3) In prohibiting permanently, by writ of injunction, the trial court from proceeding with a complaint for expropriation of the City in Civil Case No. 94-72282.16 We will deal with these contentions in the order they are presented. First. Petitioner contends that the respondents' remedy against the order of the trial court granting a writ of possession was not to file a petition for certiorari under Rule 65 but a petition for review under Rule 45 which should have been filed in the Supreme Court.17 This contention has no merit. A petition for review under Rule 45 is a mode of appeal. Accordingly, it could not have been resorted to by the respondents inasmuch as the order of the trial court granting a writ of possession was merely interlocutory from which no appeal could be taken. Rule 45, 1 of the 1997 Rules for Civil Procedure applies only to final judgments or orders of the Court of Appeals, the Sandiganbayan, and the Regional Trial Court. On the other hand, a petition for certiorari is the suitable remedy in view of Rule 65, 1 which provides: When any tribunal, board or officer exercising judicial or quasijudicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainly and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as laws and justice may require.

Respondents' petition before the Court of Appeals alleged that the trial court had acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing the order, dated December 15, 1998, resolving that Lot 1-C is not exempt from expropriation and ordering the issuance of the writ of possession in favor of petitioner.18 Second. Petitioner faults the Court of Appeals for deciding issues not raised in the trial court, specifically the question of whether or not there was compliance with 9 and 10 of RA. No. 7279. It argues that the sole defense set up by respondents in their petition before the Court of Appeals was that their property was exempted from expropriation because it comes within the purview of a "small property" as defined by R.A. No. 7279 . Accordingly, the Court of Appeals should not have applied the doctrine laid down by this Court in the Filstream19 case as such issue was not raised by respondents in their petition before the Court of Appeals. This contention likewise has no merit. In their petition before the Court of Appeals, respondents raised the following issues: 1. Whether or not the subject Lot 1-C with an area of 343.10 square meters covered by T.C.T. No. 226048 in the name of petitioners' mother, the late Demetria [De Guia] Serrano, may be lawfully expropriated "for the public purpose of providing landless occupants thereof homelots of their own under the "land-for-the landless program of respondent City of Manila." 2. Whether or not the expropriation of the said Lot l-C by respondent City of Manila violates the equal protection clause of the Constitution, since petitioners, with the exemption of petitioner Oscar G. Serranno, who are likewise landless are actual occupants hereof. 3. Whether or not Lot 1-C is or may be exempted from expropriation pursuant to R.A. 7279, otherwise known as the Urban Development and Housing Act of 1992.20

It is clear that respondents raised in issue the propriety of the expropriation of their property in connection with RA. No. 7279. Although what was discussed at length in their petition before the Court of Appeals was whether or not the said property could be considered a small property within the purview of the exemption under the said law, the other provisions of the said law concerning expropriation proceedings need also be looked into to address the first issue raised by the respondents and to determine whether or not expropriation of Lot 1-C was proper under the circumstances. The Court of Appeals properly considered relevant provisions of R A. No.7279 to determine the issues raised by respondents. Whether or not it correctly applied the doctrine laid down in Filstream in resolving the issues raised by respondents, however, is a different matter altogether, and this brings us to the next point. Third. Petitioner contends that the Court of Appeals erroneously presumed that Lot 1-C has been ordered condemned in its favor when the fact is that the order of the trial court, dated December 15, 1998, merely authorized the issuance of a writ of possession and petitioner's entry into the property pursuant to Rule 67, 2. At that stage, it was premature to determine whether the requirements of RA. No. 7279, 9 - 10 have been complied with since no evidentiary hearing had yet been conducted by the trial court.21 This contention is well taken. Rule 67, 2 provides: Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon possession of the real property involved if he deposits with the authorized government depository an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government bank of the Republic of

the Philippines payable on demand to the authorized government depositary. If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shall be fixed by the court. After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved and promptly submit a report thereof to the court with service of copies to the parties. Thus, a writ of execution may be issued by a court upon the filing by the government of a complaint for expropriation sufficient in form and substance and upon deposit made by the government of the amount equivalent to the assessed value of the property subject to expropriation. Upon compliance with these requirements, the issuance of the writ of possession becomes ministerial.22 In this case, these requirements were satisfied and, therefore, it became the ministerial duty of the court to issue the writ of possession. The Court of Appeals, however, ruled that petitioner failed to comply with the requirements laid down in 9 - 10 of RA. No. 7279 and reiterated in Filstream ruling. This is error. The ruling in the Filstream was necessitated because an order of condemnation had already been issued by the trial court in that case. Thus, the judgment in that case had already become final. In this case, the trial court has not gone beyond the issuance of a writ of possession. Hearing is still to be held to determine whether or not petitioner indeed complied with the requirements provided in RA. No. 7279. It is, therefore, premature at this stage of the proceedings to find that petitioner resorted expropriation without first trying the other modes of acquisition enumerated in 10 of the law. RA. No 7279 in pertinent parts provide:

SEC. 9. Priorities in the Acquisition of Land Lands for socialized housing shall be acquired in the following order: (a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including government owned and controlled corporations and their subsidiaries; (b) Alienable lands of the public domain; (c) Unregistered or abandoned and idle lands; (d) Those within the declares Areas or Priority Development, Zone Improvement Program sites, and Slum Improvement and Resettlement Programs sites which have not yet been acquired; (e) Bagong Lipunan Improvement and Sites and Services or BLISS sites which have not yet been acquired, and; (f) Privately-owned lands. Where on-site development is found more practicable and advantageously to the beneficiaries, the priorities mentioned in this section shall not apply. The local government units shall give budgetary priority on-site development of government lands. SEC. 10. Modes of Lands Acquisition. -- The modes of acquiring lands for purposes of this Act shall include, amount others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the Government, jointventure agreement, negotiated purchase, and expropriation: Provided, however; That expropriation shall be resorted to only when other modes of acquisition have been exhausted: Provided, further; That were expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act: Provided finally, That abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.

For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by the local government units, or by the National Housing Authority primarily through negotiated purchase:Provided, That qualified beneficiaries who are actual occupants of the lands shall be given the right of first refusal. Whether petitioner has complied with these provisions requires the presentation of evidence, although in its amended complaint petitioner did allege that it had complied with the requirements.23 The determination of this question must await that hearing on the complaint for expropriation, particularly the hearing for the condemnation of the properties sought to be expropriated. Expropriation proceedings consist of two stages: first, condemnation of the property after it is determined that its acquisition will be for a public purpose or public use and, second, the determination of just compensation to be paid for the taking of the private property to be made by the court with the assistance of not more than three commissioners.24 WHEREFORE, the decision, dated November 16,1999, and resolution, dated February 23, 2000, of the Court of Appeals are REVERSED and the order of the trial court, dated December 15,1998, is REINSTATED. This case is REMANDED to the trial court to further proceedings.1wphi1.nt SO ORDERED. Bellosillo, Quisumbing, Buena, and De Leon, Jr., JJ., concur.

NATIONAL POWER CORPORATION,, Petitioner, v. COURT OF APPEALS and ANTONINO POBRE, Respondents. DECISION CARPIO, J.: The Case

Before us is a petition for review1 of the 30 March 1992 Decision2 and 14 August 1992 Resolution of the Court of Appeals in CA-G.R. CV No. 16930. The Court of Appeals affirmed the Decision3 of the Regional Trial Court, Branch 17, Tabaco, Albay in Civil Case No. T-552. The Antecedents Petitioner National Power Corporation (NPC) is a public corporation created to generate geothermal, hydroelectric, nuclear and other power and to transmit electric power nationwide.4 NPC is authorized by law to acquire property and exercise the right of eminent domain. Private respondent Antonino Pobre (Pobre) is the owner of a 68,969 square-meter land (Property) located in Barangay Bano, Municipality of Tiwi, Albay. The Property is covered by TCT No. 4067 and Subdivision Plan 11-9709. In 1963, Pobre began developing the Property as a resortsubdivision, which he named as Tiwi Hot Springs Resort Subdivision. On 12 January 1966, the then Court of First Instance of Albay approved the subdivision plan of the Property. The Register of Deeds thus cancelled TCT No. 4067 and issued independent titles for the approved lots. In 1969, Pobre started advertising and selling the lots. On 4 August 1965, the Commission on Volcanology certified that thermal mineral water and steam were present beneath the Property. The Commission on Volcanology found the thermal mineral water and steam suitable for domestic use and potentially for commercial or industrial use. NPC then became involved with Pobres Property in three instances. First was on 18 February 1972 when Pobre leased to NPC for one year eleven lots from the approved subdivision plan.

Second was sometime in 1977, the first time that NPC filed its expropriation case against Pobre to acquire an 8,311.60 squaremeter portion of the Property.5 On 23 October 1979, the trial court ordered the expropriation of the lots upon NPCs payment of P25 per square meter or a total amount of P207,790. NPC began drilling operations and construction of steam wells. While this first expropriation case was pending, NPC dumped waste materials beyond the site agreed upon by NPC with Pobre. The dumping of waste materials altered the topography of some portions of the Property. NPC did not act on Pobres complaints and NPC continued with its dumping. Third was on 1 September 1979, when NPC filed its second expropriation case against Pobre to acquire an additional 5,554 square meters of the Property. This is the subject of this petition. NPC needed the lot for the construction and maintenance of Naglagbong Well Site F-20, pursuant to Proclamation No. 7396 and Republic Act No. 5092.7 NPC immediately depositedP5,546.36 with the Philippine National Bank. The deposit represented 10% of the total market value of the lots covered by the second expropriation. On 6 September 1979, NPC entered the 5,554 square-meter lot upon the trial courts issuance of a writ of possession to NPC. On 10 December 1984, Pobre filed a motion to dismiss the second complaint for expropriation. Pobre claimed that NPC damaged his Property. Pobre prayed for just compensation of all the lots affected by NPCs actions and for the payment of damages. On 2 January 1985, NPC filed a motion to dismiss the second expropriation case on the ground that NPC had found an alternative site and that NPC had already abandoned in 1981 the project within the Property due to Pobres opposition. On 8 January 1985, the trial court granted NPCs motion to dismiss but the trial court allowed Pobre to adduce evidence on

his claim for damages. The trial court admitted Pobres exhibits on the damages because NPC failed to object. On 30 August 1985, the trial court ordered the case submitted for decision since NPC failed to appear to present its evidence. The trial court denied NPCs motion to reconsider the submission of the case for decision. NPC filed a petition for certiorari8 with the then Intermediate Appellate Court, questioning the 30 August 1985 Order of the trial court. On 12 February 1987, the Intermediate Appellate Court dismissed NPCs petition but directed the lower court to rule on NPCs objections to Pobres documentary exhibits. On 27 March 1987, the trial court admitted all of Pobres exhibits and upheld its Order dated 30 August 1985. The trial court considered the case submitted for decision. On 29 April 1987, the trial court issued its Decision in favor of Pobre. The dispositive portion of the decision reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of the defendant and against the plaintiff, ordering the plaintiff to pay unto the defendant: (1) The sum of THREE MILLION FOUR HUNDRED FORTY EIGHT THOUSAND FOUR HUNDRED FIFTY (P3,448,450.00) PESOS which is the fair market value of the subdivision of defendant with an area of sixty eight thousand nine hundred sixty nine (68,969) square meters, plus legal rate of interest per annum from September 6, 1979 until the whole amount is paid, and upon payment thereof by the plaintiff the defendant is hereby ordered to execute the necessary Deed of Conveyance or Absolute Sale of the property in favor of the plaintiff; (2) The sum of ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS for and as attorneys fees. Costs against the plaintiff.

SO ORDERED.9 On 13 July 1987, NPC filed its motion for reconsideration of the decision. On 30 October 1987, the trial court issued its Order denying NPCs motion for reconsideration. NPC appealed to the Court of Appeals. On 30 March 1992, the Court of Appeals upheld the decision of the trial court but deleted the award of attorneys fees. The dispositive portion of the decision reads: WHEREFORE, by reason of the foregoing, the Decision appealed from is AFFIRMED with the modification that the award of attorneys fees is deleted. No pronouncement as to costs. SO ORDERED.10 The Court of Appeals denied NPCs motion for reconsideration in a Resolution dated 14 August 1992. The Ruling of the Trial Court In its 69-page decision, the trial court recounted in great detail the scale and scope of the damage NPC inflicted on the Property that Pobre had developed into a resort-subdivision. Pobres Property suffered permanent injury because of the noise, water, air and land pollution generated by NPCs geothermal plants. The construction and operation of the geothermal plants drastically changed the topography of the Property making it no longer viable as a resort-subdivision. The chemicals emitted by the geothermal plants damaged the natural resources in the Property and endangered the lives of the residents. NPC did not only take the 8,311.60 square-meter portion of the Property, but also the remaining area of the 68,969 squaremeter Property. NPC had rendered Pobres entire Property useless as a resort-subdivision. The Property has become useful

only to NPC. NPC must therefore take Pobres entire Property and pay for it. The trial court found the following badges of NPCs bad faith: (1) NPC allowed five years to pass before it moved for the dismissal of the second expropriation case; (2) NPC did not act on Pobres plea for NPC to eliminate or at least reduce the damage to the Property; and (3) NPC singled out Pobres Property for piecemeal expropriation when NPC could have expropriated other properties which were not affected in their entirety by NPCs operation. The trial court found the just compensation to be P50 per square meter or a total of P3,448,450 for Pobres 68,969 squaremeter Property. NPC failed to contest this valuation. Since NPC was in bad faith and it employed dilatory tactics to prolong this case, the trial court imposed legal interest on the P3,448,450 from 6 September 1979 until full payment. The trial court awarded Pobre attorneys fees of P150,000. The Ruling of the Court of Appeals The Court of Appeals affirmed the decision of the trial court. However, the appellate court deleted the award of attorneys fees because Pobre did not properly plead for it. The Issues NPC claims that the Court of Appeals committed the following errors that warrant reversal of the appellate courts decision: 1. In not annulling the appealed Decision for having been rendered by the trial court with grave abuse of discretion and without jurisdiction; 2. In holding that NPC had taken the entire Property of Pobre; 3. Assuming arguendo that there was taking of the entire Property, in not excluding from the Property the 8,311.60

square-meter portion NPC had previously expropriated and paid for; 4. In holding that the amount of just compensation fixed by the trial court at P3,448,450.00 with interest from September 6, 1979 until fully paid, is just and fair; 5. In not holding that the just compensation should be fixed at P25.00 per square meter only as what NPC and Pobre had previously mutually agreed upon; and 6. In not totally setting aside the appealed Decision of the trial court.11 Procedural Issues NPC, represented by the Office of the Solicitor General, insists that at the time that it moved for the dismissal of its complaint, Pobre had yet to serve an answer or a motion for summary judgment on NPC. Thus, NPC as plaintiff had the right to move for the automatic dismissal of its complaint. NPC relies on Section 1, Rule 17 of the 1964 Rules of Court, the Rules then in effect. NPC argues that the dismissal of the complaint should have carried with it the dismissal of the entire case including Pobres counterclaim. NPCs belated attack on Pobres claim for damages must fail. The trial courts reservation of Pobres right to recover damages in the same case is already beyond review. The 8 January 1985 Order of the trial court attained finality when NPC failed to move for its reconsideration within the 15-day reglementary period. NPC opposed the order only on 27 May 1985 or more than four months from the issuance of the order. We cannot fault the Court of Appeals for not considering NPCs objections against the subsistence of Pobres claim for damages. NPC neither included this issue in its assignment of errors nor discussed it in its appellants brief. NPC also failed to question the trial courts 8 January 1985 Order in the petition for

certiorari12 it had earlier filed with the Court of Appeals. It is only before this Court that NPC now vigorously assails the preservation of Pobres claim for damages. Clearly, NPCs opposition to the existence of Pobres claim for damages is a mere afterthought. Rules of fair play, justice and due process dictate that parties cannot raise an issue for the first time on appeal.13 We must correct NPCs claim that it filed the notice of dismissal just shortly after it had filed the complaint for expropriation. While NPC had intimated several times to the trial court its desire to dismiss the expropriation case it filed on 5 September 1979,14 it was only on 2 January 1985 that NPC filed its notice of dismissal.15 It took NPC more than five years to actually file the notice of dismissal. Five years is definitely not a short period of time. NPC obviously dilly-dallied in filing its notice of dismissal while NPC meanwhile burdened Pobres property rights. Even a timely opposition against Pobres claim for damages would not yield a favorable ruling for NPC. It is not Section 1, Rule 17 of the 1964 Rules of Court that is applicable to this case but Rule 67 of the same Rules, as well as jurisprudence on expropriation cases. Rule 17 referred to dismissal of civil actions in general while Rule 67 specifically governed eminent domain cases. Eminent domain is the authority and right of the state, as sovereign, to take private property for public use upon observance of due process of law and payment of just compensation.16 The power of eminent domain may be validly delegated to the local governments, other public entities and public utilities17 such as NPC. Expropriation is the procedure for enforcing the right of eminent domain.18 Eminent Domain was the former title of Rule 67 of the 1964 Rules of Court. In the 1997 Rules of Civil Procedure, which took effect on 1 July 1997, the prescribed method of expropriation is still found in Rule 67, but its title is now Expropriation.

Section 1, Rule 17 of the 1964 Rules of Court provided the exception to the general rule that the dismissal of the complaint is addressed to the sound discretion of the court.19 For as long as all of the elements of Section 1, Rule 17 were present the dismissal of the complaint rested exclusively on the plaintiffs will.20 The defending party and even the courts were powerless to prevent the dismissal.21 The courts could only accept and record the dismissal.22 A plain reading of Section 1, Rule 17 of the 1964 Rules of Court makes it obvious that this rule was not intended to supplement Rule 67 of the same Rules. Section 1, Rule 17 of the 1964 Rules of Court, provided that: SECTION 1. Dismissal by the plaintiff. An action may be dismissed by the plaintiff without order of court by filing a notice of dismissal at any time before service of the answer or of a motion for summary judgment. Unless otherwise stated in the notice, the dismissal is without prejudice, except that a notice operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in a competent court an action based on or including the same claim. A class suit shall not be dismissed or compromised without approval of the court. While Section 1, Rule 17 spoke of the service of answer or summary judgment, the Rules then did not require the filing of an answer or summary judgment in eminent domain cases.23 In lieu of an answer, Section 3 of Rule 67 required the defendant to file a single motion to dismiss where he should present all of his objections and defenses to the taking of his property for the purpose specified in the complaint.24 In short, in expropriation cases under Section 3 of Rule 67, the motion to dismiss took the place of the answer. The records show that Pobre had already filed and served on NPC his motion to dismiss/answer25 even before NPC filed its own motion to dismiss. NPC filed its notice of dismissal of the complaint on 2 January 1985. However, as early as 10

December 1984, Pobre had already filed with the trial court and served on NPC his motion to dismiss/answer. A certain Divina Cerela received Pobres pleading on behalf of NPC.26 Unfortunately for NPC, even Section 1, Rule 17 of the 1964 Rules of Court could not save its cause. NPC is in no position to invoke Section 1, Rule 17 of the 1964 Rules of Court. A plaintiff loses his right under this rule to move for the immediate dismissal of the complaint once the defendant had served on the plaintiff the answer or a motion for summary judgment before the plaintiff could file his notice of dismissal of the complaint.27 Pobres motion to dismiss/answer, filed and served way ahead of NPCs motion to dismiss, takes the case out of Section 1, Rule 17 assuming the same applies. In expropriation cases, there is no such thing as the plaintiffs matter of right to dismiss the complaint precisely because the landowner may have already suffered damages at the start of the taking. The plaintiffs right in expropriation cases to dismiss the complaint has always been subject to court approval and to certain conditions.28 The exceptional right that Section 1, Rule 17 of the 1964 Rules of Court conferred on the plaintiff must be understood to have applied only to other civil actions. The 1997 Rules of Civil Procedure abrogated this exceptional right.29 The power of eminent domain is subject to limitations. A landowner cannot be deprived of his right over his land until expropriation proceedings are instituted in court.30 The court must then see to it that the taking is for public use, there is payment of just compensation and there is due process of law.31 If the propriety of the taking of private property through eminent domain is subject to judicial scrutiny, the dismissal of the complaint must also pass judicial inquiry because private rights may have suffered in the meantime. The dismissal, withdrawal or abandonment of the expropriation case cannot be made arbitrarily. If it appears to the court that the expropriation is not for some public use,32 then it becomes the duty of the

court to dismiss the action.33 However, when the defendant claims that his land suffered damage because of the expropriation, the dismissal of the action should not foreclose the defendants right to have his damages ascertained either in the same case or in a separate action.34 Thus, NPCs theory that the dismissal of its complaint carried with it the dismissal of Pobres claim for damages is baseless. There is nothing in Rule 67 of the 1964 Rules of Court that provided for the dismissal of the defendants claim for damages, upon the dismissal of the expropriation case. Case law holds that in the event of dismissal of the expropriation case, the claim for damages may be made either in a separate or in the same action, for all damages occasioned by the institution of the expropriation case.35 The dismissal of the complaint can be made under certain conditions, such as the reservation of the defendants right to recover damages either in the same or in another action.36 The trial court in this case reserved Pobres right to prove his claim in the same case, a reservation that has become final due to NPCs own fault. Factual Findings of the Trial and Appellate Courts Bind the Court The trial and appellate courts held that even before the first expropriation case, Pobre had already established his Property as a resort-subdivision. NPC had wrought so much damage to the Property that NPC had made the Property uninhabitable as a resort-subdivision. NPCs facilities such as steam wells, nag wells, power plants, power lines, and canals had hemmed in Pobres Property. NPCs operations of its geothermal project also posed a risk to lives and properties. We uphold the factual findings of the trial and appellate courts. Questions of facts are beyond the pale of Rule 45 of the Rules of Court as a petition for review may only raise questions of law.37 Moreover, factual findings of the trial court, particularly when affirmed by the Court of Appeals, are generally binding on

this Court.38 We thus find no reason to set aside the two courts factual findings. NPC points out that it did not take Pobres 68,969 square-meter Property. NPC argues that assuming that it is liable for damages, the 8,311.60 square-meter portion that it had successfully expropriated and fully paid for should have been excluded from the 68,969 square-meter Property that Pobre claims NPC had damaged. We are not persuaded. In its 30 October 1987 Order denying NPCs motion for reconsideration, the trial court pointed out that the Property originally had a total area of 141,300 square meters.39 Pobre converted the Property into a resort-subdivision and sold lots to the public. What remained of the lots are the 68,969 square meters of land.40 Pobre no longer claimed damages for the other lots that he had before the expropriation. Pobre identified in court the lots forming the 68,969 squaremeter Property. NPC had the opportunity to object to the identification of the lots.41 NPC, however, failed to do so. Thus, we do not disturb the trial and appellate courts finding on the total land area NPC had damaged. NPC must Pay Just Compensation for the Entire Property Ordinarily, the dismissal of the expropriation case restores possession of the expropriated land to the landowner.42 However, when possession of the land cannot be turned over to the landowner because it is neither convenient nor feasible anymore to do so, the only remedy available to the aggrieved landowner is to demand payment of just compensation.43 In this case, we agree with the trial and appellate courts that it is no longer possible and practical to restore possession of the Property to Pobre. The Property is no longer habitable as a

resort-subdivision. The Property is worthless to Pobre and is now useful only to NPC. Pobre has completely lost the Property as if NPC had physically taken over the entire 68,969 squaremeter Property. In United States v. Causby,44 the U.S. Supreme Court ruled that when private property is rendered uninhabitable by an entity with the power to exercise eminent domain, the taking is deemed complete. Such taking is thus compensable. In this jurisdiction, the Court has ruled that if the government takes property without expropriation and devotes the property to public use, after many years the property owner may demand payment of just compensation.45 This principle is in accord with the constitutional mandate that private property shall not be taken for public use without just compensation.46 In the recent case of National Housing Authority v. Heirs of Isidro Guivelondo,47 the Court compelled the National Housing Authority (NHA) to pay just compensation to the landowners even after the NHA had already abandoned the expropriation case. The Court pointed out that a government agency could not initiate expropriation proceedings, seize a persons property, and then just decide not to proceed with the expropriation. Such a complete turn-around is arbitrary and capricious and was condemned by the Court in the strongest possible terms. NHA was held liable to the landowners for the prejudice that they had suffered. In this case, NPC appropriated Pobres Property without resort to expropriation proceedings. NPC dismissed its own complaint for the second expropriation. At no point did NPC institute expropriation proceedings for the lots outside the 5,554 squaremeter portion subject of the second expropriation. The only issues that the trial court had to settle were the amount of just compensation and damages that NPC had to pay Pobre. This case ceased to be an action for expropriation when NPC dismissed its complaint for expropriation. Since this case has

been reduced to a simple case of recovery of damages, the provisions of the Rules of Court on the ascertainment of the just compensation to be paid were no longer applicable. A trial before commissioners, for instance, was dispensable. We have held that the usual procedure in the determination of just compensation is waived when the government itself initially violates procedural requirements.48 NPCs taking of Pobres property without filing the appropriate expropriation proceedings and paying him just compensation is a transgression of procedural due process. From the beginning, NPC should have initiated expropriation proceedings for Pobres entire 68,969 square-meter Property. NPC did not. Instead, NPC embarked on a piecemeal expropriation of the Property. Even as the second expropriation case was still pending, NPC was well aware of the damage that it had unleashed on the entire Property. NPC, however, remained impervious to Pobres repeated demands for NPC to abate the damage that it had wrought on his Property. NPC moved for the dismissal of the complaint for the second expropriation on the ground that it had found an alternative site and there was stiff opposition from Pobre.49 NPC abandoned the second expropriation case five years after it had already deprived the Property virtually of all its value. NPC has demonstrated its utter disregard for Pobres property rights. Thus, it would now be futile to compel NPC to institute expropriation proceedings to determine the just compensation for Pobres 68,969 square-meter Property. Pobre must be spared any further delay in his pursuit to receive just compensation from NPC. Just compensation is the fair and full equivalent of the loss.50 The trial and appellate courts endeavored to meet this standard. The P50 per square meter valuation of the 68,969 square-meter Property is reasonable considering that the Property was already an established resort-subdivision. NPC has

itself to blame for not contesting the valuation before the trial court. Based on the P50 per square meter valuation, the total amount of just compensation that NPC must pay Pobre isP3,448,450. The landowner is entitled to legal interest on the price of the land from the time of the taking up to the time of full payment by the government.51 In accord with jurisprudence, we fix the legal interest at six per cent (6%) per annum.52 The legal interest should accrue from 6 September 1979, the date when the trial court issued the writ of possession to NPC, up to the time that NPC fully pays Pobre.53 NPCs abuse of its eminent domain authority is appalling. However, we cannot award moral damages because Pobre did not assert his right to it.54 We also cannot award attorneys fees in Pobres favor since he did not appeal from the decision of the Court of Appeals denying recovery of attorneys fees.55 Nonetheless, we find it proper to award P50,000 in temperate damages to Pobre. The court may award temperate or moderate damages, which are more than nominal but less than compensatory damages, if the court finds that a party has suffered some pecuniary loss but its amount cannot be proved with certainty from the nature of the case.56 As the trial and appellate courts noted, Pobres resort-subdivision was no longer just a dream because Pobre had already established the resortsubdivision and the prospect for it was initially encouraging. That is, until NPC permanently damaged Pobres Property. NPC did not just destroy the property. NPC dashed Pobres hope of seeing his Property achieve its full potential as a resortsubdivision. The lesson in this case must not be lost on entities with eminent domain authority. Such entities cannot trifle with a citizens property rights. The power of eminent domain is an extraordinary power they must wield with circumspection and utmost regard for procedural requirements. Thus, we hold NPC

liable for exemplary damages of P100,000. Exemplary damages or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.57 WHEREFORE, we DENY the petition for lack of merit. The appealed Decision of the Court of Appeals dated 30 March 1992 in CA-G.R. CV No. 16930 is AFFIRMED with MODIFICATION. National Power Corporation is ordered to pay Antonino PobreP3,448,450 as just compensation for the 68,969 squaremeter Property at P50 per square meter. National Power Corporation is directed to pay legal interest at 6% per annum on the amount adjudged from 6 September 1979 until fully paid. Upon National Power Corporations payment of the full amount, Antonino Pobre is ordered to execute a Deed of Conveyance of the Property in National Power Corporations favor. National Power Corporation is further ordered to pay temperate and exemplary damages of P50,000 and P100,000, respectively. No costs. SO ORDERED. BARANGAY SAN ROQUE, TALISAY, CEBU, petitioner, vs. Heirs of FRANCISCO PASTOR, namely: EUGENIO SYLIANCO, TEODORO SYLIANCO, ISABEL SYLIANCO, EUGENIA S. ONG, LAWRENCE SYLIANCO, LAWSON SYLIANCO, LAWINA S. NOTARIO, LEONARDO SYLIANCO JR. and LAWFORD SYLIANCO, respondents. DECISION PANGANIBAN, J.: An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within the jurisdiction of the regional trial courts, regardless of the value of the subject property.

The Case

Before us is a Petition for Review on Certiorari assailing the March 29, 1999 Order[1] of the Regional Trial Court (RTC) of Cebu City (Branch 58) in Civil Case No. CEB-21978, in which it dismissed a Complaint for eminent domain. It ruled as follows: "Premises considered, the motion to dismiss is hereby granted on the ground that this Court has no jurisdiction over the case. Accordingly, the Orders dated February 19, 1999 and February 26, 1999, as well as the Writ of Possession issued by virtue of the latter Order are hereby recalled for being without force and effect."[2] Petitioner also challenges the May 14, 1999 Order of the RTC denying reconsideration.

would determine whether the case should be filed before the MTC or the RTC. Concluding that the action should have been filed before the MTC since the value of the subject property was less than P20,000, the RTC ratiocinated in this wise: "The instant action is for eminent domain. It appears from the current Tax Declaration of the land involved that its assessed value is only One Thousand Seven Hundred Forty Pesos (P1,740.00). Pursuant to Section 3, paragraph (3), of Republic Act No. 7691, all civil actions involving title to, or possession of, real property with an assessed value of less than P20,000.00 are within the exclusive original jurisdiction of the Municipal Trial Courts. In the case at bar, it is within the exclusive original jurisdiction of the Municipal Trial Court of Talisay, Cebu, where the property involved is located. "The instant action for eminent domain or condemnation of real property is a real action affecting title to or possession of real property, hence, it is the assessed value of the property involved which determines the jurisdiction of the court. That the right of eminent domain or condemnation of real property is included in a real action affecting title to or possession of real property, is pronounced by retired Justice Jose Y. Feria, thus, Real actions are those affecting title to or possession of real property. These include partition or condemnation of, or foreclosures of mortgage on, real property. x x x"[5] Aggrieved, petitioner appealed directly to this Court, raising a pure question of law.[6] In a Resolution dated July 28, 1999, the Court denied the Petition for Review "for being posted out of time on July 2, 1999, the due date being June 2, 1999, as the motion for extension of time to file petition was denied in the resolution of July 14, 1999."[7] In a subsequent Resolution dated October 6, 1999, the Court reinstated the Petition.[8] Respondents, on the other hand, contend that the Complaint for Eminent Domain affects the title to or possession of real property. Thus, they argue that the case should have been

The Facts Petitioner filed before the Municipal Trial Court (MTC) of Talisay, Cebu (Branch 1)[3] a Complaint to expropriate a property of the respondents. In an Order dated April 8, 1997, the MTC dismissed the Complaint on the ground of lack of jurisdiction. It reasoned that "[e]minent domain is an exercise of the power to take private property for public use after payment of just compensation. In an action for eminent domain, therefore, the principal cause of action is the exercise of such power or right. The fact that the action also involves real property is merely incidental. An action for eminent domain is therefore within the exclusive original jurisdiction of the Regional Trial Court and not with this Court."[4]

Assailed RTC Ruling The RTC also dismissed the Complaint when filed before it, holding that an action for eminent domain affected title to real property; hence, the value of the property to be expropriated

brought before the MTC, pursuant to BP 129 as amended by Section 3 (3) of RA 7691. This law provides that MTCs shall have exclusive original jurisdiction over all civil actions that involve title to or possession of real property, the assessed value of which does not exceed twenty thousand pesos or, in civil actions in Metro Manila, fifty thousand pesos exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses and costs. We agree with the petitioner that an expropriation suit is incapable of pecuniary estimation. The test to determine whether it is so was laid down by the Court in this wise: "A review of the jurisprudence of this Court indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought, like in suits to have the defendant perform his part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to foreclose a mortgage, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance. The rationale of the rule is plainly that the second class cases, besides the determination of damages, demand an inquiry into other factors which the law has deemed to be more within the competence of courts of first instance, which were the lowest courts of record at the time that the first organic laws of the Judiciary were enacted allocating jurisdiction (Act 136 of the Philippine Commission of June 11, 1901)."10

In the present case, an expropriation suit does not involve the recovery of a sum of money. Rather, it deals with the exercise by the government of its authority and right to take private property for public use.11 In National Power Corporation v. Jocson,12 the Court ruled that expropriation proceedings have two phases: "The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint. An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter as the Rules expressly state, in the proceedings before the Trial Court, no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard. "The second phase of the eminent domain action is concerned with the determination by the court of the just compensation for the property sought to be taken. This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. x x x" It should be stressed that the primary consideration in an expropriation suit is whether the government or any of its instrumentalities has complied with the requisites for the taking of private property. Hence, the courts determine the authority

of the government entity, the necessity of the expropriation, and the observance of due process.13 In the main, the subject of an expropriation suit is the governments exercise of eminent domain, a matter that is incapable of pecuniary estimation. True, the value of the property to be expropriated is estimated in monetary terms, for the court is duty-bound to determine the just compensation for it. This, however, is merely incidental to the expropriation suit. Indeed, that amount is determined only after the court is satisfied with the propriety of the expropriation. Verily, the Court held in Republic of the Philippines v. Zurbano that "condemnation proceedings are within the jurisdiction of Courts of First Instance,"14 the forerunners of the regional trial courts. The said case was decided during the effectivity of the Judiciary Act of 1948 which, like BP 129 in respect to RTCs, provided that courts of first instance had original jurisdiction over "all civil actions in which the subject of the litigation is not capable of pecuniary estimation."15 The 1997 amendments to the Rules of Court were not intended to change these jurisprudential precedents. We are not persuaded by respondents argument that the present action involves the title to or possession of a parcel of land. They cite the observation of retired Justice Jose Y. Feria, an eminent authority in remedial law, that condemnation or expropriation proceedings are examples of real actions that affect the title to or possession of a parcel of land.16 Their reliance is misplaced. Justice Feria sought merely to distinguish between real and personal actions. His discussion on this point pertained to the nature of actions, not to the jurisdiction of courts. In fact, in his pre-bar lectures, he emphasizes that jurisdiction over eminent domain cases is still within the RTCs under the 1997 Rules. To emphasize, the question in the present suit is whether the government may expropriate private property under the given

set of circumstances. The government does not dispute respondents title to or possession of the same. Indeed, it is not a question of who has a better title or right, for the government does not even claim that it has a title to the property. It merely asserts its inherent sovereign power to "appropriate and control individual property for the public benefit, as the public necessity, convenience or welfare may demand."17 WHEREFORE, the Petition is hereby GRANTED and the assailed Orders SET ASIDE. The Regional Trial Court is directed to HEAR the case. No costs. SO ORDERED. Melo, (Chairman), Purisima, and Gonzaga-Reyes, JJ., concur. Vitug, J., on official business abroad.

The facts are not disputed. On March 21, 1990, a check (Check No. 11669677) dated March 31, 1990 in the amount of One Million Pesos (P1,000,000.00) was drawn against Account No. 0111-01854-8 with private respondent Allied Bank payable to the order of one Jose Ch. Alvarez. The payee deposited the check with petitioner Union Bank who credited the P1,000,000.00 to the account of Mr. Alvarez. On May 21, 1990, petitioner sent the check for clearing through the Philippine Clearing House Corporation (PCHC). When the check was presented for payment, a clearing discrepancy was committed by Union Bank's clearing staff when the amount of One Million Pesos (P1,000,000.00) was erroneously "under-encoded" to One Thousand Pesos (P1,000.00) only. Petitioner only discovered the under-encoding almost a year later. Thus, on May 7, 1991, Union Bank notified Allied Bank of the discrepancy by way of a charge slip for Nine Hundred Ninety-Nine Thousand Pesos (P999,000.00) for automatic debiting against of Allied Bank. The latter, however, refused to accept the charge slip "since [the] transaction was completed per your [Union Bank's] original instruction and client's account is now insufficiently funded." Subsequently, Union Bank filed a complaint against Allied Bank before the PCHC Arbitration Committee (Arbicom), praying that: . . . judgment be rendered in favor of plaintiff against defendant sentencing it to pay plaintiff: 1. The sum of NINE HUNDRED NINETY-NINE THOUSAND PESOS (P999,000.00); 2. The sum of THREE HUNDRED SIXTY-ONE AND FOUR HUNDRED EIGHTY AND 20/XX P361,480.20 as of October 9, 1991 representing reimbursements for opportunity losses and interest at the rate of 24% per annum arising from actual losses sustained by plaintiff as of May 21, 1990;

UNION BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and ALLIED BANK CORPORATION, respondents.

KAPUNAN, J.: Sec. 2 of the Law on Secrecy of Bank Deposits, 1 as amended, declares bank deposits to be "absolutely confidential" except: (1) In an examination made in the course of a special or general examination of a bank that is specifically authorized by the Monetary Board after being satisfied that there is reasonable ground to believe that a bank fraud or serious irregularity has been or is being committed and that it is necessary to look into the deposit to establish such fraud or irregularity, (2) In an examination made by an independent auditor hired by the bank to conduct its regular audit provided that the examination is for audit purposes only and the results thereof shall be for the exclusive use of the bank, (3) Upon written permission of the depositor, (4) In cases of impeachment, (5) Upon order of a competent court in cases of bribery or dereliction of duty of public officials, or (6) In cases where the money deposited or invested is the subject matter of the litigation. Whether or not the case at bar falls under the last exception is the issue in the instant petition.

3. The amount for attorney's fees at the rate of 25% of any and all sums due; 4. Penalty Charges at the rate of 1/8 of 1% of P999,000.00 from May 22, 1990 until payment thereof. 5. Exemplary and punitive damages against the defendant in such amounts as may be awarded by this Tribunal in order to serve a lesson to all member-Banks under the PCHC umbrella to strictly comply with the provisions thereof; 6. The costs of suit which includes filing fee in addition to litigation expenses which shall be proven in the course of arbitration. 7. Such other damages that may be awarded by this Tribunal.
2

consequence of an alleged under-coding of check amount to P1,000,000.00 and damage[s] by way of loss of interest income. 3 The Court of Appeals affirmed the dismissal of the petition, ruling that the case was not one where the money deposited is the subject matter of the litigation. Petitioner collecting bank itself in its complaint filed before the PCHC, Arbicom Case No. 91-068, clearly stated that its "cause of action against defendant arose from defendant's deliberate violation of the provisions of the PCHC Rule Book, Sec. 25.3, specifically on Under-Encoding of check amounting to P1,000,000.00 drawn upon defendant's Tondo Branch which was deposited with plaintiff herein on May 20, 1990, . . . which was erroneously encoded at P1,000.00 which defendant as the receiving bank thereof, never called nor notified the plaintiff of the error committed thus causing actual losses to plaintiff in the principal amount of P999,000.00 exclusive of opportunity losses and interest." Furthermore, a reading of petitioner collecting bank's complaint in the Arbicom case shows that its thrust is directed against respondent drawee bank's alleged failure to inform the former of the under-encoding when Sec. 25.3 of the PCHC Rule Book is clear that it is receiving bank's (respondent drawee bank herein) duty and obligation to notify the erring bank (petitioner collecting bank herein) of any such under-encoding of any check amount submitted for clearing within the member banks of the PCHC not later than 10:00 a.m. of the following clearing day and prays that respondent drawee bank be held liable to petitioner collecting bank for penalties in view of the latter's violation of the notification requirement. Prescinding from the above, we see no cogent reason to depart from the time-honored general banking rule that all deposits of whatever nature with banks are considered of absolutely confidential nature and may not be examined, inquired or

Thereafter, Union Bank filed in the Regional Trial Court (RTC) of Makati a petition for the examination of Account No. 111-018548. Judgment on the arbitration case was held in abeyance pending the resolution of said petition. Upon motion of private respondent, the RTC dismissed Union Bank's petition. The RTC held that: The case of the herein petitioner does not fall under any of the foregoing exceptions to warrant a disclosure of or inquiry into the ledgers/books of account of Allied Checking Account No. 111-01854-8. Needless to say, the complaint filed by herein petitioner against Allied Banking Corporation before the Philippine Clearing House Corporation (PCHC) Arbitration Committee and docketed therein as Arb[i]com Case No. 91-068 (Annex "A", petition) is not one for bribery or dereliction of duty of public officials much less is there any showing that the subject matter thereof is the money deposited in the account in question. Petitioner's complaint primarily hing[e]s on the alleged deliberate violation by Allied Bank Corporation of the provisions of the PCHC Rule Book, Sec. 25[.]3, and as principal reliefs, it seeks for [sic] the recovery of amounts of money as a

looked into by any person, government official, bureau or office and corollarily, that it is unlawful for any official or employee of a bank to disclose to any person any information concerning deposits. Nowhere in petitioner collecting bank's complaint filed before the PCHC does it mention of the amount it seeks to recover from Account No. 0111-018548 itself, but speaks of P999,000.00 only as an incident of its alleged opportunity losses and interest as a result of its own employee's admitted error in encoding the check. The money deposited in Account No. 0111-018548 is not the subject matter of the litigation in the Arbicom case for as clearly stated by petitioner itself, it is the alleged violation by respondent of the rules and regulations of the PCHC. 4 Union Bank is now before this Court insisting that the money deposited in Account No. 0111-01854-8 is the subject matter of the litigation Petitioner cites the case of Mathay vs. Consolidated Bank and Trust Company, 5 where we defined "subject matter of the action," thus: . . . By the phrase "subject matter of the action" is meant "the physical facts, the things real or personal, the money, lands, chattels, and the like, in relation to which the suit is prosecuted, and not the delict or wrong committed by the defendant." Petitioner contends that the Court of Appeals confuses the "cause of action" with the "subject of the action." InYusingco vs. Ong Hing Lian, 6 petitioner points out, this Court distinguished the two concepts. . . . The cause of action is the legal wrong threatened or committed, while the object of the action is to prevent or redress the wrong by obtaining some legal relief; but the subject of the action is neither of these since it is not the wrong or the relief demanded, the subject of the action is the matter or thing with respect to which the controversy has arisen,

concerning which the wrong has been done, and this ordinarily is the property, or the contract and its subject matter, or the thing in dispute. The argument is well taken. We note with approval the difference between the "subject of the action" from the "cause of action." We also find petitioner's definition of the phrase "subject matter of the action" is consistent with the term "subject matter of the litigation," as the latter is used in the Bank Deposits Secrecy Act. In Mellon Bank, N.A. vs. Magsino, 7 where the petitioner bank inadvertently caused the transfer of the amount of US$1,000,000.00 instead of only US$1,000.00, the Court sanctioned the examination of the bank accounts where part of the money was subsequently caused to be deposited: . . . Sec. 2 of [Republic Act No. 1405] allows the disclosure of bank deposits in cases where the money deposited is the subject matter of the litigation. Inasmuch as Civil Case No. 26899 is aimed at recovering the amount converted by the Javiers for their own benefit, necessarily, an inquiry into the whereabouts of the illegally acquired amount extends to whatever is concealed by being held or recorded in the name of persons other than the one responsible for the illegal acquisition. Clearly, Mellon Bank involved a case where the money deposited was the subject matter of the litigation since the money so deposited was the very thing in dispute. This, however, is not the case here. Petitioner's theory is that private respondent Allied Bank should have informed petitioner of the under-encoding pursuant to the provisions of Section 25.3.1 of the PCHC Handbook, which states:

25.3.1. The Receiving Bank should inform the erring Bank about the under-encoding of amount not later than 10:00 A.M. of the following clearing day. Failing in that duty, petitioner holds private respondent directly liable for the P999,000.00 and other damages. It does not appear that petitioner is seeking reimbursement from the account of the drawer. This much is evident in petitioner's complaint before the Arbicom. . . . plaintiff's cause of action against defendant arose from defendant's deliberate violation of the provisions of the PCHC Rule Book, Sec. 25.3, specifically on Under-Encoding of check amounting to P1,000,000.00 drawn upon defendant's Tondo Branch which was deposited with plaintiff herein sometime on May 20, 1990. From the check amount of P1,000,000.00, it was instead erroneously encoded at P1,000.00 which defendant as the receiving bank thereof, never called nor notified the plaintiff of the error committed thus causing actual losses to plaintiff in the principal amount of P999,000.00 exclusive of opportunity losses and interest thereon whatsoever. . . . 8 Petitioner even requested private respondent's Branch Manager for reimbursement from private respondent's account through the automatic debiting system. 2.7. On May 6, 1991, plaintiff's Senior Vice-President, Ms. ERLINDA V. VALENTON wrote defendant's Tondo Branch Manager, Mr. RODOLFO JOSE on the incident and requested assistance in facilitating correction of the erroneous coding with request for reimbursement thru the industry's automatic debiting of defendant's account. . . . 9 Further, petitioner rejected private respondent's proposal that the drawer issue postdated checks in favor of petitioner since the identity and credit standing of the depositor were unknown to petitioner.

2.9. On May 23, 1991, defendant's Branch Manager, the same Mr. Rodolfo Jose wrote plaintiff's Ms. Erlinda Valenton again insisting on the execution of the Quitclaim and Release in favor of defendant as the Branch has endeavored to negotiate with its client for the collection of such amount. Upon a reading of the terms of the Quitclaim and Release being proposed by defendant, the unmistakable fact lies that again defendant attempts for the second time to take advantage of plaintiffs plight by indicating that the terms of the payment of the principal amount of P999,000.00 is by way of several personal postdated checks up to March 21, 1992 from a person whose identify is not even disclosed to plaintiff. . . . To an ordinary person aggrieved already by having been taken advantage of for 620 days more or less, the proposal of defendant could not be acceptable for the reason that aside from the interest lost already for the use of its money by another party, no assurance is made as to the actual collection thereof from a party whose credit standing, the recipient is not at all aware of. . . . 10 Petitioner also believed that it had no privity with the depositor: 2.12. Plaintiff then replied to defendant's letter by requesting that in lieu of the post-dated checks from defendant's client with whom plaintiff has no privity whatsoever, if the defendant could tender the full payment of the amount of P999,000.00 in defendant's own Manager's check and that plaintiff is willing to forego its further claims for interest and losses for a period of 620 days, more or less. . . . 11 The following argument adduced by petitioner in the Arbicom case leaves no doubt that petitioner is holding private respondent itself liable for the discrepancy: Defendant by its acceptance thru the clearing exchange of the check deposit from its client cannot be said to be free from any liability for the unpaid portion of the check amount considering

that defendant as the drawee bank, is remiss in its duty of verifying possible technicalities on the face of the check. Since the provisions of the PCHC Rule Book has so imposed upon the defendant being the Receiving Bank of a discrepant check item to give that timely notification and defendant failing to comply with such requirement, then it can be said that defendant is guilty of negligence. He who is guilty of negligence in the performance of its [sic] duty is liable for damages. (Art. 1170, New Civil Code.) Art. 1172 of the Civil Code provides that: "Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts, according to the circumstances.["] 12 Petitioner points to its prayer in its complaint to show that it sought reimbursement from the drawer's account. The prayer, however, does not specifically state that it was seeking recovery of the amount from the depositor's account. Petitioner merely asked that "judgment be rendered in favor of plaintiff against defendant sentencing it to pay plaintiff: 1. The sum of NINE HUNDRED NINETY-NINE THOUSAND PESOS (P999,000.00). . . . 13 On the other hand, the petition before this Court reveals that the true purpose for the examination is to aid petitioner in proving the extent of Allied Bank's liability: Hence, the amount actually debited from the subject account becomes very material and germane to petitioner's claim for reimbursement as it is only upon examination of subject account can it be proved that indeed a discrepancy in the amount credited to petitioner was committed, thereby, rendering respondent Allied Bank liable to petitioner for the deficiency. The money deposited in aforesaid account is undeniably the subject matter of the litigation since the issue in

the Arbicom case is whether respondent Bank should be held liable to petitioner for reimbursement of the amount of money constituting the difference between the amount of the check and the amount credited to petitioner, that is, P999,000.00, which has remained deposited in aforesaid account. On top of the allegations in the Complaint, which can be verified only by examining the subject bank account, the defense of respondent Allied Bank that the reimbursement cannot be made since client's account is not sufficiently funded at the time petitioner sent its Charge Slip, bolsters petitioner's contention that the money in subject account is the very subject matter of the pending Arbicom case. Indeed, to prove the allegations in its Complaint before the PCHC Arbitration Committee, and to rebut private respondent's defense on the matter, petitioner needs to determine: 1. how long respondent Allied Bank had wilfully or negligently allowed the difference of P999,000.00 to be maintained in the subject account without remitting the same to petitioner; 2. whether indeed the subject account was no longer sufficiently funded when petitioner sent its charge slip for reimbursement to respondent bank on May 7, 1991; and 3. whether or not respondent Allied Bank's actuations in refusing to immediately reimburse the discrepancy was attended by good or bad faith. In other words, only a disclosure of the pertinent details and information relating to the transactions involving subject account will enable petitioner to prove its allegations in the pending Arbicom case. . . . . 14 In short, petitioner is fishing for information so it can determine the culpability of private respondent and the amount of

damages it can recover from the latter. It does not seek recovery of the very money contained in the deposit. The subject matter of the dispute may be the amount of P999,000.00 that petitioner seeks from private respondent as a result of the latter's alleged failure to inform the former of the discrepancy; but it is not the P999,000.00 deposited in the drawer's account. By the terms of R.A. No. 1405, the "money deposited" itself should be the subject matter of the litigation. That petitioner feels a need for such information in order to establish its case against private respondent does not, by itself, warrant the examination of the bank deposits. The necessity of the inquiry, or the lack thereof, is immaterial since the case does not come under any of the exceptions allowed by the Bank Deposits Secrecy Act. WHEREFORE, the petition is DENIED. SO ORDERED.
CARPIO MORALES, J.: In mid-November 1979, the spouses Rustico Ardiente and Asuncion Paloma, together with their son Angel P. Ardiente and the latters wife Gliceria Ardiente, obtained a loan in the amount of P100,000.00 from the Peninsula Development Bank (the bank) at its main office at Lucena City, to be amortized in six years, on account of which they executed a November 15, 1979 Promissory Note1 in the same amount. To secure the payment of the loan, the Ardientes executed in favor of the bank a Real Estate Mortgage2 on November 14, 1979 over a parcel of land situated at Mabutag, Cawa, Buenavista, Quezon and covered by Transfer Certificate of Title (TCT) No. 29478, and three (3) parcels of land situated at Cadlit, Guinayangan, Quezon and covered by Original Certificate of Title (OCT) No. 0-5961. Out of the proceeds of the loan, the Ardientes purchased a mini bus costing P81,875.00. After the bus was in operation for several months, it met an accident in August 1980 as result of which it sustained heavy damages and rendered the Ardientes unable to meet their obligation to the bank. As the Ardientes were later granted by the bank an additional loan of P46,000 for which they executed an October 29, 1981 Promissory Note,3 the Real Estate Mortgage was amended. RUSTICO A. ARDIENTE and ASUNCION PALOMARDIENTE, petitioners, vs. PROVINCIAL SHERIFF, REGISTER OF DEEDS OF QUEZON and PENINSULA DEVELOPMENT BANK, respondents.

DECISION

Demands for the payment of their obligation to the bank notwithstanding, the Ardientes failed to settle the same. The bank thus extra-judicially foreclosed the mortgage and the parcels of land covered thereby were sold at public auction to the bank which was the highest bidder. The bank later notified the Ardientes by letter of February 24, 19844 that they had one (1) year from November 11, 1983 or up to November 11, 1984 to redeem the foreclosed mortgage. Two days before the period to redeem the foreclosed mortgage expired or on November 9, 1984, the spouses Rustico and Suncion Ardiente filed before the Regional Trial Court (RTC) of Quezon at Gumaca a complaint, denominated as Petition,5 against the bank, the provincial Sheriff of Quezon, and the Register of deeds of Quezon, for Annulment of Auction Sale with Preliminary Injunction and Damages, anchored to two grounds as reflected in paragraph 16 of the Complaint: 16. On two (2) legal grounds, therefore, namely, (a) that it was the defendant, not herein petitioners, who had violated the Real Estate Mortgage and Amended Real Estate Mortgage, and (b) that the requisite of notifying the mortgagors of the intended extra-judicial foreclosure sale was not duly complied with the FORECLOSURE SALE should be annulled, which had supposedly taken place on November 11, 1983 in the Office of the Provincial Sheriff situated in the courthouse building, National Trial Court, Lucena City wherein the alleged highest bidder was the defendant for the satisfaction of petitioners alleged indebtedness ofP247,279.14;6 (Underscoring in the original; emphasis supplied) As the following allegation in paragraph 15 of the Complaint shows, the Ardiente spouses capitalized on the alleged lack of notice to them of the "judicial foreclosure auction sale." 15. And, the unkindest cut of all came up when, without first having been duly notified of an intended extra-judicial foreclosure auction sale, petitioners received a letter from the defendant, under date of February 24, 1984, informing them that "the one (1) year period within which to exercise their right to redeem the foreclosed properties commenced to run on November 11, 1983 to November 11, 1984" (a Xerox copy of which is hereto attached as Annex "A" and made an integral part hereof).7 (Underscoring supplied) On the above-quoted allegations in paragraphs 15 and 16 of the Complaint, the bank, in its Answer with Counterclaim, alleged:

xxx 15) Answering respondent admits the allegations contained in paragraph 15 of the petition, with the explanations and qualifications, that petitioners were duly notified of the extra-judicial foreclosure and public auction sale. There was sufficient notice and publication served to all concern[ed] of said public auction sale of the properties offered as collaterals.8 (Underscoring supplied) (16) Answering respondent specifically denies the allegations contained in paragraph [16] of the petition. The truth of the matter is that the petitioners have violated the terms and conditions of Real Estate Mortgage, Amended Real Estate Mortgage and that respondent has complied with the requisites of Art. 3135 as amended in relation to the application [for] extra-judicial proceeding of collaterals."9 (Underscoring supplied) To the Answer the spouses Ardiente filed a Reply and Answer to Counterclaim.10 The Complaint was later amended11 whereby the spouses Ardiente alleged that, among other things, the purchase price of the mortgaged parcels of land was so "grossly and greatly inadequate," hence, the foreclosure sale should be annulled; by reason of the unlawful foreclosure of the real estate mortgage, they suffered damages; and to protect their interests, they filed a formal request with the Register of Deeds to cause a notice of lis pendens. In compliance with the directive of Branch 61 of the Gumaca RTC, the parties submitted their respective memoranda. In their memorandum, the defendants bank et al. proffered the following pertinent argument on the Ardiente spouses claim that they were not previously notified of the foreclosure: [I]t is maintained that there was notice, coupled with a publication of Notice of Public Auction Sale in a newspaper of general circulations (sic) supported by publishers affidavit attached to the record in the Office of the Provincial Sheriff of Quezon at Calauag, Quezon. Personal notice was sent to the plaintiffs. However, said requirements in the extra-judicial foreclosure is dispensed with, in accordance with the decision of the Supreme Court in the case of --BONNEVIE V. COURT OF APPEALS, 125 SCRA 122 (1983) In extra-judicial foreclosure, Act No. 3135 personal notice on the mortgagor is not necessary. Section 3 thereof reads:

Sec. 3 Notice shall be given by posting notices of the sale for not less than twenty (20) days in at least three (3) public places of the municipality or city where the property is situated, and if such property is worth more than P400.00, such notice shall also be published once a week for at least 3 consecutive weeks in a newspaper of general circulation in the municipality or city. Such phrase "once a week for at least 3 consecutive weeks", as interpreted in "BASA vs. MERCADO" (61 Phil. 632) does not mean that the notice should be published for 3 full weeks.12 (Emphasis and underscoring supplied) By Decision of August 12, 1994,13 the trial court, noting the absence of documentary evidence showing strict compliance with the statutory requirements on publication of notice of extra-judicial foreclosure of mortgage, declared the extra-judicial foreclosure and the sale of the mortgaged properties null and void. Thus, the trial court discoursed: Respondent Bank maintained that it filed an extra-judicial foreclosure with the Provincial Sheriff of Quezon. After due notice and publication, these properties were sold at Public Auction Sale where a corresponding Certificate of Sale (Exh. 5) was issued in its name dated November 11, 1983, as the sole bidder (Memorandum for the Defendants, p.4). On page 7 of said Memorandum, it contended that there was notice, coupled with a publication of Notice of Public Auction Sale in a newspaper of general circulation supported by publishers affidavit attached to the record in the Office of the Provincial Sheriff of Quezon at Calauag, Quezon. Personal notice was sent to petitioners. (Record, pp. 358 & 361, Memorandum For the Defendants, pages 4 & 7). Despite these allegations on record, no documentary exhibits of such publication of notice of public auction sale in a newspaper of general circulations supported by publishers affidavit were ever submitted by respondent Bank. Considering that petitioners are clearly attacking the validity of the public auction sale for which respondent Bank was the sole bidder, said documentary exhibits should have been presented in court and not merely alleged to be attached to the record in the Office of the Provincial Sheriff of Quezon at Calauag, Quezon. The clear fact remains that these documents were not submitted to form part of the records of this case. No such proof of publication exists in the records. In the case of Tambunting vs. Court of Appeals (167 SCRA 17), the Hon. Supreme Court stressed that "failure to present proof of posting and publication rebuts the presumption of compliance with official duty". To show compliance, the published notices and certificate of posting by the sheriff of the notice of sale on November 11, 1983 should have been presented.

Therefore, in the absence of convincing proof that the statutory provisions governing publication of notice of mortgage foreclosure sales have been strictly complied with, this Court has no other recourse except to declare as null and void the sale in favor of judgment creditor, made by respondent Sheriff on November 12, 1983, awarding the properties in question to respondent Bank, and for which, the titles in the name of petitioner-spouses were already cancelled and registered in its name. This Court also finds that petitioners are entitled to and deserving the reliefs prayed for.14 (Emphasis and underscoring supplied), Accordingly, the trial court disposed as follows: WHEREFORE, judgment is hereby rendered, in favor of petitioners, and against the respondents, as follows: (1) Declaring as null and void the extrajudicial foreclosure and sale conducted by respondent Provincial Sheriff of Quezon; (2) Declaring as null and void all transactions/proceedings held subsequent thereto such as the execution of the final deed of sale and issuance of title to and in the name of respondent Bank; (3) Ordering the respondent Register of Deeds of Quezon to re-issue a new Transfer Certificate of Title to and in the name of petitioners in lieu of the former titles which had been deemed cancelled by virtue of the issuance of the titles which had been deemed cancelled by virtue of the issuance of the titles which had been issued in favor of respondent Corporation; and (4) Ordering all respondents, jointly and severally, to pay unto herein petitioners, the sum of P15,000, for attorneys fees and litigation expenses of P10,000. Costs against defendants. SO ORDERED.15 The Defendants bank et al. thus appealed to the Court of Appeals upon the following assigned errors: [I.]

THE LOWER COURT ERRED IN FINDING AND CONCLUDING THAT THERE WAS ABSENCE OF CONVINCING PROOF THAT THE STATUTORY PROVISIONS GOVERNING PUBLICATION OF NOTICE OF MORTGAGE FORECLOSURE SALE HAVE BEEN STRICTLY COMPLIED WITH. [II.] THE COURT A QUO ERRED IN DECLARING NULLAND VOID THE EXTRAJUDICIAL FORECLOSURE AND SALE CONDUCTED BY RESPONDENT PROVINCIAL SHERIFF OF QUEZON, AND ALL TRANSACTIONS/PROCEEDINGS HELD SUBSEQUENT THERETO SUCH AS THE EXECUTION OF THE FINAL DEED OF SALE AND ISSUANCE OF TITLE TO AND IN THE NAME OF RESPONDENT BANK. [III.] THE LOWER COURT ERRED IN ORDERING THE RRESPONDENT REGISTER OF DEEDS OF QUEZON TO REISSUE A NEW TRANSFER CERTIFICATE OF TITLE TO AND IN THE NAME OF PETITIONERS IN LIEU OF THE FORMER TITLES WHICH HAD BEEN DEEMED CANCELLED BY VIRTUE OF THE ISSUANCE OF THE TITLES WHICH HAD BEEN ISSUED IN FAVOR OF RESPONDENT CORPORATION. [IV.] THE TRIAL COURT ERRED IN AWARDING TO PLAINTIFFSAPPELLEES ATTORNEYS FEES ABD LITIGATION EXPENSES.16 (Underscoring supplied) By Decision of January 29, 2001,17 the Court of Appeals reversed the decision of the trial court after finding the argument of the defendant-appellants bank et al. that the lack of required notice and publication of the extra-judicial foreclosure of mortgage was not averred in the complaint, hence, cannot be the basis of an adverse judgment. Explaining its reversal of the decision, the Court of Appeals held: It is axiomatic that the complaint should inform the defendant of all the material facts on which the plaintiff relies to support his demand; it should state the theory of a cause of action which forms the bases of the plaintiffs claim of liability. The office, purpose or function of the complaint is to inform the defendant clearly and definitely of the claims made against him so that he may be prepared to meet the issues at the

trial. Otherwise stated, if the wrong or omission of the defendant is not alleged in the complaint, then the defendant would be precluded from presenting evidence to refute the imputation of such wrong or present justification for the alleged omission. In this case, even perfunctory reading of the Petition and the Amended Petition, readily reveals the absence of any averment relating to the required posting and publication of the notice of foreclosure sale. Understandably then, the defendant-appellant Bank saw no need to present the Sheriffs Certification of Posting and the newspaper where the notice was published as well as the publishers affidavit. Clearly, the presumption that the Provincial Sheriff of Quezon has discharged his official duty in a regular manner and that the defendant-appellant Bank complied with the requirements under the law will suffice. And while it may be true that the Supreme Court said, in the case of Tambunting v. Court of Appeals and relied upon by the trial court, that the presumption of compliance with official duty is rebutted by the failure to present proof of posting and publication of the notice of sale, such may be applied only when these omissions are alleged and raised by the party in the complaint. The result would have been different if evidence of these issues were raised during the trial of the case with the acquiescence of the parties. Then, the rule on the amendment of the petition to conform to or authorize presentation of evidence may be applied, thus: Sec. 5. Amendment to conform to or authorize presentation of evidence. When issues not raised in the pleadings are tried with the express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgments but failure to amend does not affect the result of the trial of these issues. x x x As earlier stated however, the issue of lack of posting and publication was not even discussed nor even touched in the testimony of plaintiffappellee Rustico Ardiente. His testimony is limited only to his receipt of a letter from the bank that their properties have been foreclosed and that they have one year to redeem the same. The plaintiffs-appellees only imputed to the defendant-appellant Bank its omission to give them personal notice of the foreclosure sale. However, it is jurisprudentially settled that personal notice to the mortgagor in extrajudicial foreclosure proceedings is not necessary. Hence, lack of personal notice to the mortgagors is not a ground to set aside the foreclosure sale. Ergo, the trial court erred in declaring the foreclosure null and void based on a ground not raised in the pleadings nor tried before it.18(Underscoring in the original; emphasis supplied)

Hence, the present petition for review filed by the Ardiente spouses proferring the following: REASONS WARRANTING REVIEW I. RESPON[ENT] COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT SINCE THE PETITIONERS IN THEIR PETITION AND IN THEIR AMENDED PETITION DID NOT MENTION THE ABSENCE OF THE REQUIRED POSTING AND PUBLICATION OF THE NOTICE OF FORECLOSURE SALE, THERE IS NO NEED FOR THE DEFENDANT APPELLANT BANK TO PRESENT THE SHERIFF CERTIFICATION OF POSTING AND THE NEWSPAPER WHERE THE NOTICE WAS PUBLISHED AS WELL AS THE PUBLISHERS AFFIDAVIT TO PROVE THE VALIDITY OF THE FORECLOSURE SALE. II. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE TRIAL COURTS DECISION AND DISMISSING PETITIONERS COMPLAINT. III. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN NOT AWARDING ATTORNEYS FEES AND LITIGATION EXPENSES TO THE PLAINTIFFS-APPELLEES.19 The spouses Ardientes (hereinafter referred to as petitioners) argue that paragraph 15 of their Complaint and paragraph 16 of the Amended Complaint show that they were "attacking the validity of the extra-judicial sale"; that the impleading of the sheriff demonstrates that they are "questioning the validity and legality of his performance of officially duty"; that the bank was sufficiently informed of their "cause of action, theory of their case and relief being sought" as shown by the banks allegations in paragraphs 15 and 16 of its Answer; and that in fact in the banks Special and Affirmative Defenses, particularly paragraph 25 thereof which reads: 25) That answering respondent as well as the Office of Provincial Sheriff fully compl[ied] [with] the requirements of law under Act 3135 as amended, more specifically with regards to notices of the public auction sale as well as the extra-judicial foreclosure application in accordance with the law.20,

an issue was tendered, the nature of which affirmative defense-answer called for the presentation of evidence, they citing Benavides v. Alabastro,21 but the bank did not present "proof of proper compliance with Act 3135, "AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL ESTATE MORTAGES,: as to posting and publication of notices of public auction sale. The Court is not persuaded. With respect to petitioners paragraphs 15 and 16 allegations in their Complaint, clearly, they were questioning the validity of the extra-judicial foreclosure of the mortgage on the basis of lack of notice to them as mortgagors. It is settled that personal notice to the mortgagor in extra-judicial foreclosure proceedings is not necessary, hence, not a ground to set aside the foreclosure sale.22 With respect to petitioners argument that the bank, in paragraph 25 of its Answer, in fact put in issue its compliance with the requirements of Act 3135, "more specifically with regards to the notices of the public auction sale as well as the extra-judicial application in accordance with law," to thus call for the presentation of evidence, they citing againBenavides,23 the same fails. Benavides bears on the rendition of judgment on the pleadings. It holds that where the defendants answer tenders an issue, as where it does not only deny the materialallegations of the complaint but also sets up certain special and affirmative defenses, the nature of such answer calls for presentation of evidence, hence, it is error torender a judgment on the pleadings thereon without such evidence. No doubt, it is a well-settled rule that statutory provisions governing publication of notice of mortgage foreclosure sales must be strictly complied with, and that even slight deviations therefrom will invalidate the notice and the sale at least voidable.24 Despite petitioners non-allegation of lack of publication of notice of foreclosure in their Complaint, the bank pleaded in its Answer (1) "that petitioners were duly notified of the extrajudicial foreclosure and public auction sale" and "[t]here was sufficient notice and publication served to all concern[ed] of said public auction sale," and (2) that it and the Office of the provincial Sheriff "fully compl[ied] with the requirements of law under Act 3135, more specifically with regard to notices of the public auction as well as the extra-judicial foreclosure in accordance with law."

Yet petitioners never refuted in their Reply and Answer to Counterclaim such defense of the bank nor presented evidence before the trial court to disprove the same. In fact, in its Comment on petitioners Formal Offer of Evidence before the trial court, the bank, passing on Exhibit "D" its letter to petitioners advising them that they had one year from November 11, 1993 to exercise their right of redemption, stated that said exhibit was admitted "with the qualification as to the purpose to the effect that said extra-judicial foreclosure was filed in accordance with law and that all requirements of said law were complied with and that plaintiffs were duly notified of said proceedings."25 Despite the banks repeated claim that the statutory requirements governing extra-judicial foreclosure had been complied with, the banks plea of lack of publication of notice of foreclosure was not raised by petitioners either in the Amended Complaint or in the Reply and Answer to Counterclaim. It was not also raised during the trial as the entire transcripts of the stenographic notes of the proceedings before the trial court show. Nor even in their memorandum filed before the trial court, petitioners having merely assailed the lack of "personal" notification to them of any "intended" extrajudicial foreclosure and the "grossly and greatly inadequate" purchase price of the lands. As the appellate court thus held, the issue of lack of publication of notice cannot be raised for the first time on appeal. In the Tambunting case cited by petitioners to support their thesis that failure to strictly comply with statutory requirements governing publication of notice of mortgage foreclosure sales renders the sale at least voidable, the therein mortgagors, in their complaint for annulment of mortgage and damages, sought to enjoin the extra-judicial foreclosure of mortgage. During the pendency of the case, the extra-judicial foreclosure pushed thru just the same. The mortgaged property was sold at public auction to the mortgagees, and the property was eventually sold to the Tambunting Realty. The mortgagors thereupon filed a Supplemental Complaint impleading the realty firm, the provincial sheriff as the officer responsible for holding the foreclosure, and the Register of Deeds for the subsequent transfer of the property "despite alleged non-compliance with the requirements of Act 3135, Sec. 3 (as amended by Act 4118) on posting and publication of the notice of foreclosure sale." In other words, the lack of publication was raised in issue by the mortgagors in their Supplemental Complaint. In the case of Go v. Court of Appeals,26 as in the present case, despite the fact that the mortgagees pleaded as a defense in their Answer the "receipt of the notice of the sale which was published in a newspaper of general circulation, the issue of lack of publication of the notice of foreclosure was never raised in issue by the mortgagors.

In disposing of the issue of lack of publication of the notice of foreclosure of mortgage which was raised for the first time on appeal, this Court in Go held: Indeed, as correctly held by the respondent Court, the issue of lack of publication of the notice of foreclosure of the mortgage was raised only on appeal. Petitioner does not represent that he directly attacked in his complaint in Civil Case No. 8920 the validity of the foreclosure because of such lack of notice. His own Statement of the Facts and of the Case in the instant petition makes no reference to such lack o notice as one, or even just as a basis for any, of his causes of action in the complaint. He sought the cancellation of the contract of mortgage because he allegedly never received the amounts indicated in the promissory notes. Of course, nullity of the mortgage due to absence of consideration is leagues apart form the nullity of the foreclosure of a mortgage because of non-publication of the notice of foreclosure. Additionally, petitioner presented no evidence before the trial court to prove the absence of publication of the notice despite the fact that private respondents, in their Answer, squarely pleaded as a defense the foreclosure sale and petitioners receipt of the "notice of the sale which was published in a newspaper of general circulation." That the lack of publication of the notice of foreclosure was never raised in issue by petitioner and that it is not within the issues framed by the parties in the trial court are then too obvious. (Emphasis and underscoring supplied)27 WHEREFORE, there being no reversible error in the assailed decision, the petition is hereby DISMISSED. No pronouncement as to costs

BPI FAMILY SAVINGS BANK, INC., petitioner, vs. SPS. JANUARIO ANTONIO VELOSO AND NATIVIDAD VELOSO, respondents.

DECISION

CORONA, J.: Before us is a petition for review of the decision1 dated February 14, 2000 of the Court of Appeals affirming the decision of the Regional Trial Court, Branch 94, Quezon City,2 which upheld the validity of the extra-judicial foreclosure proceedings initiated by Family Bank and Trust Company (Family Bank) on the mortgaged properties of respondent spouses Januario Antonio Veloso and Natividad Veloso but allowed the latter to redeem the same properties. On January 8, 1983, respondent spouses obtained a loan of P1,300,000 from petitioners predecessor-in-interest Family Bank and Trust Company. To secure payment of the loan, respondent spouses executed in favor of the bank a deed of mortgage over three parcels of land, with improvements, registered in their names under TCT Nos. 272227, 272228 and 272229 of the Registry of Deeds of Quezon City. On February 9, 1983, respondents, for value received, executed a promissory note for P1,300,000. Subsequently, however, respondents defaulted in the monthly installments due on their loan. When efforts to update the account failed, Family Bank instituted extra-judicial foreclosure proceedings on the respondents mortgaged properties. On July 1, 1985, the properties were sold at public auction with Family Bank as the highest bidder for P2,782,554.66. On August 5, 1985, Family Bank assigned all its rights and interests in the foreclosed properties to petitioner BPI Family Bank, Inc. (BPI). On August 28, 1985, the sheriffs certificate of sale was registered with the Registry of Deeds of Quezon City.

On July 24, 1986, respondents, through counsel, wrote BPI offering to redeem the foreclosed properties for P1,872,935. This was, however, rejected by petitioner. On August 27, 1986, respondents filed in the RTC of Quezon City, Branch 94, a complaint for annulment of foreclosure, with consignation and prayer for damages. On motion of respondents, the trial court, in an order dated August 27, 1986, allowed respondents to deposit with the clerk of court the sum of P1,500,000 representing the redemption price. Thereafter, trial on the merits ensued. Meanwhile, in Branch 76 of the Regional Trial Court of Quezon City, BPI was able to secure a writ of possession over the foreclosed properties. This prompted respondents to file with the Court of Appeals a petition for certiorari with preliminary injunction docketed as CA-G.R. SP No. 22681. On October 8, 1990, the Court of Appeals resolved to grant respondents motion for preliminary mandatory injunction. Eventually, however, in a decision promulgated on May 31, 1991, the Court of Appeals, in CA-G.R. SP No. 22681, resolved the issue of possession in favor of BPI and accordingly lifted the preliminary mandatory injunction it had earlier issued, denying altogether respondents petition. From this decision, respondents came to this Court via a petition for review which was, however, denied in a resolution dated January 13, 1992. The resolution affirmed, in effect, petitioners right to the possession of the subject properties. On December 16, 1992, upon motion of respondents and despite the opposition of petitioner, Branch 94 ordered the release of P1,400,000 of the consigned amount to respondents, with the balance of P100,000 to take the place of the injunction bond to answer for whatever damages petitioner might suffer because of the issuance of the preliminary injunction (previously issued and later lifted) in favor of respondents. Finally, on August 18, 1995, after almost a decade of protracted litigation, the trial court rendered a decision declaring the validity of the extra-judicial foreclosure of the mortgaged properties of respondents but allowed the redemption of the same at a redemption price of P2,140,000. BPI elevated the matter to the Court of Appeals which affirmed the trial courts decision, with modification: WHEREFORE, subject to the modification declaring P2,678,639.80 as the redemption price due the appellant, the decision appealed from is hereby AFFIRMED in all other respects.3

Hence, the instant petition based on the following assigned errors: I THE HONORABLE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT AFFIRMED THE DECISION OF THE TRIAL COURT AND ALLOWED THE RESPONDENTS TO REDEEM THE FORECLOSED PROPERTY. II ASSUMING FOR THE SAKE OF ARGUMENT, BUT WITHOUT ADMITTING, THAT THE HONORABLE COURT OF APPEALS DID NOT ERR IN AFFIRMING THE DECISION OF THE TRIAL COURT, NEVERTHELESS IT DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT FIXED THE REDEMPTION PRICE TO BE PAID BY RESPONDENTS TO PETITIONER AT ONLY P2,678,639.80 AND SHALL ONLY EARN 1% PER MONTH UNDER SECTION 28, RULE 39 OF THE 1997 RULES OF CIVIL PROCEDURE. The fact is that, at the time of the foreclosure sale on July 1, 1985, respondent spouses Veloso had already defaulted on their loan to petitioners predecessorin-interest family bank. In a real estate mortgage, when the principal obligation is not paid when due, the mortgagee has the right to foreclose on the mortgage and to have the property seized and sold, and to apply the proceeds to the obligation.4 foreclosure is proper if the debtor is in default in the payment of his obligation.5 and in this case, the validity of the extra-judicial foreclosure on July 1, 1985 was confirmed by both the trial court and the court of appeals. We find no reason to question it. The sole question therefore that remains to be resolved is: did respondent spouses comply with all the requirements for the redemption of the subject properties? We answer in the negative. The general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire to do so. The statement of intention must be accompanied by an actual and simultaneous tender of payment. This constitutes the exercise of the right to repurchase.6

In several cases7 decided by the Court where the right to repurchase was held to have been properly exercised, there was an unequivocal tender of payment for the full amount of the repurchase price. Otherwise, the offer to redeem is ineffectual.8 Bona fide redemption necessarily implies a reasonable and valid tender of the entire repurchase price, otherwise the rule on the redemption period fixed by law can easily be circumvented. As explained by this Court in Basbas vs. Entena:9 x x x the existence of the right of redemption operates to depress the market value of the land until the period expires, and to render that period indefinite by permitting the tenant to file a suit for redemption, with either party unable to foresee when final judgment will terminate the action, would render nugatory the period of two years fixed by the statute for making the redemption and virtually paralyze any efforts of the landowner to realize the value of his land. No buyer can be expected to acquire it without any certainty as to the amount for which it may be redeemed, so that he can recover at least his investment in case of redemption. In the meantime, the landowners needs and obligations cannot be met. It is doubtful if any such result was intended by the statute, absent clear wording to that effect. Consequently, in this case, the offer by respondents on July 24, 1986 to redeem the foreclosed properties for P1,872,935 and the subsequent consignation in court ofP1,500,000 on August 27, 1986, while made within the period10 of redemption, was ineffective since the amount offered and actually consigned not only did not include the interest but was in fact also way below the P2,782,554.66 paid by the highest bidder/purchaser of the properties during the auction sale. In Bodiongan vs. Court of Appeals,11 we held: In order to effect a redemption, the judgment debtor must pay the purchaser the redemption price composed of the following: (1) the price which the purchaser paid for the property; (2) interest of 1% per month on the purchase price; (3) the amount of any assessments or taxes which the purchaser may have paid on the property after the purchase; and (4) interest of 1% per month on such assessments and taxes x x x. Furthermore, Article 1616 of the Civil Code of the Philippines provides: The vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the sale x x x. It is not difficult to understand why the redemption price should either be fully offered in legal tender or else validly consigned in court. Only by such means can the auction winner be assured that the offer to redeem is being made in good faith.

The sum of P1,400,000 consigned by respondents in Branch 94 was subsequently withdrawn by them, leaving only P100,000 to take the place of the injunction bond. This would have been tantamount to requiring petitioner to accept payment by installments as there would have necessarily been an indefinite extension of the redemption period.12 If a partial payment can bind the winning bidder or purchaser in an auction sale, by what rule can the payment of the balance be determined? Petitioner could not be expected to entertain an offer of redemption without any assurance that respondents could pay the repurchase price immediately. A contrary rule would leave the buyers at foreclosure sales open to harassment by expectedly angry debtors and cause unnecessary prolongation of the redemption period, contrary to the policy of the law. Whether or not respondents were diligent in asserting their willingness to pay is irrelevant. Redemption within the period allowed by law is not a matter of intent but a question of payment or valid tender of the full redemption price within said period. The disposition of the instant case in the trial court unnecessarily dragged for almost a decade. Now, it is on its 18th year and still respondents have not tendered the full redemption price. Nor have they consigned the full amount, if only to prove their willingness and ability to pay. This would have evidenced their good faith. The law granted respondents the right of redemption. But in so granting that right, the law intended that their offer to redeem be valid and effective, accompanied by an actual tender of the redemption price. Fixing a definite term within which the property should be redeemed is meant to avoid prolonged economic uncertainty over the ownership of the thing sold. In the case at bar, the offer was not a legal and effective exercise of the right of redemption contemplated by law, hence, refusal of the offer by petitioner was completely justified. Finally, respondents cannot argue that the law on equity should prevail. Equity applies only in the absence of, and never against, statutory law or judicial rules of procedure.13 WHEREFORE, the appealed decision of the Court of Appeals is hereby REVERSED and SET ASIDE. The complaint filed by respondents, the spouses Veloso, is hereby dismissed. SO ORDERED.

G.R. No. 109963 October 13, 1999 HEIRS OF JOAQUIN TEVES: RICARDO TEVES, ARCADIA TEVES, TOMAS ZAMORA, FELICIA TEVES, HELEN TEVES, ALFREDO OSMEA, ROBERTO TEVES, JOAQUIN TEVES, III, PETER TEVES, MILDRED TEVES, WILSON MABILOG, LEONILO PATIGAYON, EDUARDO PATIGAYON, ALEXANDER PATIGAYON, ALDRIN PATIGAYON, NOEL PATIGAYON, VICTOR PATIGAYON, MA. TEVES PATERNO OCHOTORENA, EXEQUILA TEVES, EMILIO JO, EMILIANA TEVES, MILAGROS TEVES, EDSEL PINILI, VICENTE TEVES, EMILIANA ISO, ALBERTO TEVES, ERLINDA TEVES, DIOSDADO TEVES, VICTORIA TEVES AND VIVENCIO NARCISO,petitioners, vs. COURT OF APPEALS, HEIRS OF ASUNCION IT-IT NAMELY: ELISA IT-IT, SUSANA IT-IT, NORBERTO IT-IT, ISA-AC IT-IT, JR., JAIME ITIT, FELICITAS IT-IT, TERESITA IT-IT, ANTONIO NODADO, CORAZON IT-IT, JIMMY LERO, DANILO IT-IT, EDITA GAMORA, PACITA VAILOCES, CRIS VAILOCES, CECILIA CIMAFRANCA and CECILIA FLOR CIMAFRANCA, respondents. GONZAGA-REYES, J.: Before us is a petition for review on certiorari assailing the decision 1 of the Court of Appeals which was promulgated on August 18, 1992 affirming the July 11, 1991 decision 2 of Branch 38 of the Regional Trial Court of Negros Oriental in favor of defendants-appellees. The facts, as culled from the pleadings of the parties herein and the decision of the lower courts, are as follows: Marcelina Cimafranca and Joaquin Teves had nine children, namely Teotimo, Felicia, Pedro, Andres, Asuncion, Gorgonio, Cresenciano, Arcadia and Maria. Andres, however, predeceased both his parents and died without issue. After Marcelina Cimafranca and Joaquin Teves died, intestate and without debts, in 1943 and 1953, respectively, their children executed extrajudicial settlements purporting to adjudicate unto themselves the ownership over two parcels of land belonging to their deceased parents and to alienate their shares thereto in favor of their sister Asuncion Teves. The validity of these settlements executed pursuant to section 1 of Rule 74 of the Rules of Court is the primary issue in the present case.1wphi1.nt

On May 9, 1984, plaintiffs-appellants Ricardo and Arcadia Teves filed a complaint with the Regional Trial Court of Negros Oriental for the partition and reconveyance of two parcels of land located in Dumaguete, designated as Lots 769-A and 6409, against the heirs of Asuncion Teves. The complaint was subsequently amended to include Maria Teves and the heirs of Teotimo, Felicia, Pedro, and Gorgonio Teves as plaintiffs and the spouses Lucresio Baylosis and Pacita Nocete, and Cecilia Cimafranca-Gamos and Cecilia Flor Cimafranca as defendants. 3Plaintiffs-appellants alleged that defendants-appellees, without any justifiable reason, refused to partition the said parcels of land and to convey to plaintiffs their rightful shares. 4 Lot 769, covered by Original Certificate of Title (OCT) No. 4682-A, 5 is registered in the names of Urbana Cimafranca, one-fourth (1/4) share, Marcelina Cimafranca, the wife of Joaquin Teves, one-fourth (1/4) share, Domingo Villahermosa, one-eighth (1/8) share, Antero Villahermosa, one-eighth (1/8) share, Cecilia Cimafranca, one-eighth (1/8) share and Julio Cimafranca, one-eighth (1/8) share. The present controversy involves only Marcelina Cimafranca's one-fourth (1/4) share in the land, designated as Lot 769-A. On June 13, 1956, Teotimo, Felicia, Pedro, Asuncion, Gorgonio and Arcadia Teves executed a document entitled "Settlement of Estate and Sale," 6 adjudicating unto themselves, in equal shares, Lot 769-A and conveying their shares, interests and participations over the same in favor of Asuncion Teves for the consideration of P425.00. A similar deed denominated "Extrajudicial Settlement and Sale" 7 was signed by Maria Teves on April 21, 1959. Under such deed, Maria conveys her own share over Lot 769-A in favor of Asuncion Teves for the consideration of P80.00. The two settlements were denounced by the plaintiffs as spurious. The trial court summarized the claims of the plaintiffs, viz . . . Maria Teves Ochotorena herself, denied having executed this Extrajudicial Settlement and Sale over her share or interest in Lot 769 claiming that her signature in said document is a forgery. She disowns her signature declaring that as a married woman she always signs a document in her husband's family name. Further, she declared that on the date she purportedly signed said document in Dumaguete City before the notary public, she was in her home in Katipunan, Zamboanga del Norte.

On Exhibit "G" which is likewise offered as Exhibit "3" for the defendants, plaintiffs hold that said document is spurious claiming that the signatures of Pedro Teves, Felicia Teves and Gorgonio Teves are all forgeries. To support this allegation, Helen T. Osmena, daughter of Felicia Teves and Erlinda Teves, daughter of Gorgonio Teves were presented as witnesses. Being allegedly familiar with the style and character of the handwriting of their parents these witnesses declared unequivocally that the signatures of their parents appearing on the document are forgeries. In sum, plaintiffs argue that these fraudulent documents which defendants rely in claiming ownership to the disputed properties are all nullities and have no force in law and could not be used as basis for any legal title. Consequently, in their view, they are entitled to the reliefs demanded particularly, to their respective shares of the disputed properties. 8 The other property in dispute is Lot 6409 which was originally covered by OCT No. 9091 9 and was registered in the name of Joaquin Teves and his two sisters, Matea and Candida Teves. However, Matea and Candida died without issue, causing the entire property to pass to Joaquin Teves. On December 14, 1971, Lot 6409 was adjudicated and divided in equal shares in a "Deed of Extrajudicial Settlement & Sale" 10 executed by Joaquin Teves' children Asuncion, Teotimo, Felisia, Gorgonio, Arcadia and Maria Teves. In the same deed, the shares of these same heirs in Lot 6409 were sold to Asuncion Teves for P100.00. Asuncion Teves took possession of the land and acquired title 11 over the same on March 22, 1972. After her death in 1981, her children, defendants-appellees It-it herein, extrajudicially settled Asuncion Teves' property, adjudicating unto themselves Lot 6409. 12On July 20, 1983 a new transfer certificate of title 13 was issued in the names of Asuncion Teves' children, namely Elisa, Susana, Norberto, Isaac, Jaime, Felicitas, Teresita, Corazon, and Danilo, all surnamed It-it. On July 2, 1984, the It-its sold Lot 6409 to defendants-appellees Lucrecio Baylosis, Sr. and Pacita Nocete-Baylosis for P20,000.0014 and a transfer certificate of title 15 was issued in the name of the Baylosis couple. Plaintiffs-appellants claim that the Deed of Extrajudicial Settlement & Sale covering Lot 6409 is also spurious. Their arguments were discussed in the trial court's decision as follows

Presented as Exhibit "D" and "1" for both the plaintiffs and defendants respectively, is a document denominated as "Extrajudicial Settlement and Sale" executed on December 4, 1971 by and among the heirs of Joaquin Teves and Marcelina Cimafranca. This document which gave birth to TCT No. 5761 over Lot 6409 registered in the name of Asuncion Teves It-it is questioned by the plaintiffs as spurious for the following reasons: 1. Erasure of the word "quitclaim" is superimposed with the word "sale" in handwriting. 2. The consideration of "One peso" stated in document is intercalated with the word "hundred" in handwriting. 3. The signature of Maria Teves Ochotorena, Pedro Teves and Felicia Teves are forgeries. 4. The thumbmark imposed on the name of Gorgonio Teves does not actually belong to Gorgonio Teves who was an educated man and skilled in writing according to his daughter. Aside from these defects which would make said document null and void, Arcadia Teves who is one of the living sisters of the mother of the principal defendants although confirming the authenticity of her signature averred that in reality no consideration was ever given to her and that her impression of the said document was that she was only giving her consent to sell her share of the land. Plaintiffs likewise contend that as regards the share of Ricardo Teves, son of Crescenciano Teves who predeceased Joaquin and Marcelina, it was not at all affected in that extrajudicial settlement and sale since neither Crescenciano Teves nor his son Ricardo Teves participated in its execution. xxx xxx xxx Likewise, plaintiffs offered TCT No. 5761 for Lot 6409 registered in the name of Asuncion Teves It-it as Exhibit "B" as proof that said property was later titled in trust for all the heirs of Joaquin Teves and which was used later as basis in effecting a deed of sale in favor of co-defendant Lucresio Baylosis. In this light, the plaintiffs argue that the sale of said property is a nullity for it was not only attended with bad faith on the part of both the vendor and the vendee but primarily the vendor had

no right at all to part with said property which is legally owned by others. 16 In answer to plaintiffs-appellants' charges of fraud, defendantsappellees maintained that the assailed documents were executed with all the formalities required by law and are therefore binding and legally effective as bases for acquiring ownership or legal title over the lots in question. Furthermore, it is contended that plaintiffs-appellants have slept on their rights and should now be deemed to have abandoned such rights. 17 The trial court ruled in favor of defendants-appellees and rendered judgment dismissing the complaint with costs against plaintiffsappellants. As regards Lot 6409, the court declared that the Extrajudicial Settlement and Sale executed by the heirs of Joaquin Teves and Marcelina Cimafranca was duly executed with all the formalities required by law, thus, validly conveying Lot 6409 in favor of Asuncion Teves. Moreover, it stated that, even granting the truth of the imputed infirmities in the deed, the right of plaintiffs-appellants to bring an action for partition and reconveyance was already barred by prescription. An action for the annulment of a partition must be brought within four years from the discovery of the fraud, while an action for the reconveyance of land based upon an implied or constructive trust prescribes after ten years from the registration of the deed or from the issuance of the title. The complaint in this case was filed on May 9, 1984, exactly 12 years, 1 month and 17 days after the issuance of the transfer certificate of title in the name of Asuncion Teves on March 22, 1972. Thus, ownership over Lot 6409 rightfully belonged to defendants-appellees It-it. Moreover, the trial court held that the extrajudicial settlements over both Lots 6409 and 769, having been prepared and acknowledged before a notary public, are public documents, vested with public interest, the sanctity of which deserves to be upheld unless overwhelmed by clear and convincing evidence. The evidence presented by the plaintiffs to support their charges of forgery was considered by the court insufficient to rebut the legal presumption of validity accorded to such documents. 18 The Court of Appeals upheld the trial court's decision affirming the validity of the extrajudicial statements, with a slight modification. It disposed of the case, thus

WHEREFORE, premises considered, the decision appealed from is AFFIRMED with the modification in that herein defendant-appellees are hereby ORDERED to partition Lot 769-A and deliver to plaintiffappellant Ricardo Teves one-eight (sic) (1/8) portion thereof corresponding to the share of his deceased father Cresenciano Teves. No costs. The appellate court said that plaintiffs-appellants' biased and interested testimonial evidence consisting of mere denials of their signatures in the disputed instruments is insufficient to prove the alleged forgery and to overcome the evidentiary force of the notarial documents. It also ruled that the plaintiffs-appellants' claim over Lot 6409 was barred by prescription after the lapse of ten years from the issuance of title in favor of Asuncion Teves, while their claim over Lot 769-A is barred by laches since more than 25 years has intervened between the sale to Asuncion Teves and the filing of the present case in 1984. The appellate court noted that the conveyance of Lot 769-A in favor of Asuncion Teves did not affect the share of Cresenciano Teves as he was not a signatory to the settlements. It also found that Ricardo Teves, Cresenciano's heir, is in possession of a portion of Lot 769-A and that defendants-appellees do no not claim ownership over such portion. Thus, the defendants-appellees It-it were ordered to partition and convey to Ricardo Teves his one-eighth share over Lot 769A.1wphi1.nt As regards the extrajudicial settlement involving Lot 6409, although it was found by the appellate court that Cresenciano Teves was also not a signatory thereto, it held that it could not order the reconveyance of the latter's share in such land in favor of his heir Ricardo Teves because Cresenciano had predeceased Joaqin Teves. Moreover, Ricardo Teves, by a deed simply denominated as "Agreement" executed on September 13, 1955 wherein he was represented by his mother, authorized the heirs of Joaquin Teves to sell his share in Lot 6409. 19 Plaintiffs-appellants assailed the appellate court's decision upon the following grounds I. IN CONSIDERING RICARDO TEVES AS BOUND BY THE SIGNATURE OF HIS MOTHER, INSPITE OF DEATH OF CRESENCIANO TEVES IN 1944;

AND UNDER THE OLD CIVIL CODE THE SPOUSE CANNOT INHERIT EXCEPT THE USUFRUCT; II. IN UPHOLDING SWEEPINGLY THE PRESUMPTION OF REGULARITY OF NOTARIZED DEED, DESPITE CLEAR, CONVINCING, SUBSTANTIAL AND SUFFICIENT EVIDENCE THAT MARIA OCHOTORENA WAS IN MINDANAO; THE NOTARY PULIC DID NOT KNOW MARIA OCHOTORENA AND THE SIGNATURES OF THE OTHER HEIRS IN THE QUESTIONED DOCUMENT ARE BELIED BY COMPARISON WITH THE GENUINE SIGNATURE IN EXH. "E"; III. IN VALIDATING THE ONE PESO CONSIDERATION, INSPITE OF NO OTHER VALUABLE CONSIDERATION, THE SUPERIMPOSED P100 WAS UNILATERALLY INSERTED, SHOWING FICTITIOUS AND SIMULATED CONSIDERATION; AND IV. PRESCRIPTION DOES NOT START FROM A VOID CONTRACT.
20

We affirm that the extrajudicial settlements executed by the heirs of Joaquin Teves and Marcelina Cimafranca are legally valid and binding. The extrajudicial settlement of a decedent's estate is authorized by section 1 of Rule 74 of the Rules of Court, which provides in pertinent part that If the decedent left no will and no debts and the heirs are all of age, or the minors are represented by their judicial or legal representatives duly authorized for the purpose, the parties may, without securing letters of administration, divide the estate among themselves as they see fit by means of a public instrument filed in the office of the register of deeds, . . . xxx xxx xxx Thus, for a partition pursuant to section 1 of Rule 74 to be valid, the following conditions must concur: (1) the decedent left no will; (2) the decedent left no debts, or if there were debts left, all had been paid; (3) the heirs are all of age, or if they are minors, the latter are represented by their judicial guardian or legal representatives; (4) the partition was made by means of a public instrument or affidavit duly filed with the Register of Deeds. 21

We uphold, finding no cogent reason to reverse, the trial and appellate courts' factual finding that the evidence presented by plaintiffsappellants is insufficient to overcome the evidentiary value of the extrajudicial settlements. The deeds are public documents and it has been held by this Court that a public document executed with all the legal formalities is entitled to a presumption of truth as to the recitals contained therein. 22 In order to overthrow a certificate of a notary public to the effect that the grantor executed a certain document and acknowledged the fact of its execution before him, mere preponderance of evidence will not suffice. Rather, the evidence must be so clear, strong and convincing as to exclude all reasonable dispute as to the falsity of the certificate. When the evidence is conflicting, the certificate will be upheld. 23 The appellate court's ruling that the evidence presented by plaintiffs-appellants does not constitute the clear, strong, and convincing evidence necessary to overcome the positive value of the extrajudicial settlements executed by the parties, all of which are public documents, being essentially a finding of fact, is entitled to great respect by the appellate court and should not be disturbed on appeal. 24 It is noted that the Deed of Extrajudicial Settlement & Sale covering Lot 6409 purports to divide Joaquin Teves' estate among only six of his heirs, namely Asuncion, Teotimo, Felisia, Gorgonio, Arcadia and Maria Teves. 25 It does not mention nor bear the signatures of either Pedro or Cresenciano Teves although they are both intestate heirs of Joaquin Teves and as such, are entitled to a proportionate share of the decedent's estate. Contrary to the ruling of the appellate court, the fact that Cresenciano predeceased Joaquin Teves does not mean that he or, more accurately, his heirs, lose the right to share in the partition of the property for this is a proper case for representation, wherein the representative is raised to the place and degree of the person represented and acquires the rights which the latter would have if he were living. 26 However, notwithstanding their non-inclusion in the settlement, the action which Pedro and Cresenciano might have brought for the reconveyance of their shares in the property has already prescribed. An action for reconveyance based upon an implied trust pursuant to article 1456 of the Civil Code prescribes in ten years from the registration of the deed or from the issuance of the title. 27 Asuncion Teves acquired title over Lot 6409 in 1972, but the present case was

only filed by plaintiffs-appellants in 1984, which is more than 10 years from the issuance of title. 28 The division of Lot 769-A, on the other hand, was embodied in two deeds. The first extrajudicial settlement was entered into by Teotimo, Felicia, Pedro, Gorgonio, Arcadia and Asuncion Teves in 1956 29, while the second deed was executed in 1959 by Maria Teves. 30 Cresenciano was not a signatory to either settlement. However, in contrast to the extrajudicial settlement covering Lot 6409, the two extrajudicial settlements involving Lot 769-A do not purport to exclude Cresenciano from his participation in Lot 769-A or to cede his share therein in favor of Asuncion. The settlement clearly adjudicated the property in equal shares in favor of the eight heirs of Marcelina Cimafranca. Moreover, the deeds were intended to convey to Asuncion Teves only the shares of those heirs who affixed their signatures in the two documents. The pertinent portions of the extrajudicial settlement executed in 1956, of which substantively identical provisions are included in the 1959 deed, provide xxx xxx xxx 5. That by virtue of the right of succession the eight heirs above mentioned inherit and adjudicate unto themselves in equal shares Lot No. 769-A and our title thereto is evidenced by the O.C. of Title No. 4682-A of the Land Records of Negros Oriental. THAT FOR AND IN CONSIDERATION of the sum of FOUR HUNDRED TWENTY-FIVE (P425.00) PESOS, Philippine Currency which we have received from ASUNCION TEVES; WE, Teotimo, Felicia, Pedro, Gorgonio and Arcadia, all surnamed Teves, do hereby sell, transfer and convey unto Asuncion Teves, married to Isaac Itit, Filipino, of legal age and resident of and with postal address in the City of Dumaguete, all our shares, interests and participations over Lot 769-A of the subdivision plan, Psd, being a portion of Lot No. 769 of the Cadastral Survey of Dumaguete, her heirs, successors and assigns, together with all the improvements thereon. xxx xxx xxx It has even been admitted by both parties that Ricardo Teves is in possession of an undetermined portion of Lot 769-A and defendantsappellees It-it do not claim ownership over his share in the

land. 31 Thus, contrary to the appellate court's ruling, there is no basis for an action for reconveyance of Ricardo Teves' share since, in the first place, there has been no conveyance. Ricardo Teves is entitled to the ownership and possession of one-eighth of Lot 769-A. Neither does Ricardo Teves have a right to demand partition of Lot 769-A because the two extajudicial settlements have already effectively partitioned such property. Every act which is intended to put an end to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a compromise, or any other transaction. 32 The extrajudicial settlements executed in 1956 and 1959 adjudicated Lot 769-A in equal shares unto the eight heirs of Marcelina Cimafranca. Such a partition, which was legally made, confers upon each heir the exclusive ownership of the property adjudicated to him. 33 Although Cresenciano, Ricardo's predecessor-in-interest, was not a signatory to the extrajudicial settlements, the partition of Lot 769-A among the heirs was made in accordance with their intestate shares under the law. 34 With regards to the requisite of registration of extrajudicial settlements, it is noted that the extrajudicial settlements covering Lot 769-A were never registered. However, in the case of Vda. de Reyes vs. CA, 35 the Court, interpreting section 1 of Rule 74 of the Rules of Court, upheld the validity of an oral partition of the decedent's estate and declared that the non-registration of an extrajudicial settlement does not affect its intrinsic validity. It was held in this case that [t]he requirement that a partition be put in a public document and registered has for its purpose the protection of creditors and at the same time the protection of the heirs themselves against tardy claims. The object of registration is to serve as constructive notice to others. It follows then that the intrinsic validity of partition not executed with the prescribed formalities does not come into play when there are no creditors or the rights of creditors are not affected. Where no such rights are involved, it is competent for the heirs of an estate to enter into an agreement for distribution in a manner and upon a plan different from those provided by law. Thus, despite its non-registration, the extrajudicial settlements involving Lot 769-A are legally effective and binding among the heirs of Marcelina Cimafranca since their mother had no creditors at the time of her death.

Except for the portion of Lot 769-A occupied by Ricardo Teves, both parcels of land have been and continue to be in the possession of Asuncion Teves and her successors-in-interest. 36 Despite this, no explanation was offered by plaintiffs-appellants as to why they instituted the present action questioning the extrajudicial settlements only in 1984, which is more than 25 years after the assailed conveyance of Lot 769-A and more than 10 years after the issuance of a transfer certificate of title over Lot 6409, both in favor of Asuncion Teves. Such tardiness indubitably constitutes laches, which is the negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. 37 Thus, even assuming that plaintiffs-appellants had a defensible cause of action, they are barred from pursuing the same by reason of their long and inexcusable inaction. An extrajudicial settlement is a contract and it is a well-entrenched doctrine that the law does not relieve a party from the effects of a contract, entered into with all the required formalities and with full awareness of what he was doing, simply because the contract turned out to be a foolish or unwise investment. 38 Therefore, although plaintiffs-appellants may regret having alienated their hereditary shares in favor of their sister Asuncion, they must now be considered bound by their own contractual acts.1wphi1.nt WHEREFORE, the August 18, 1992 decision of the Court of Appeals is hereby AFFIRMED. No pronouncements as to costs. SO ORDERED. Melo, Vitug, Panganiban and Purisim

the petitioner as it would delay him in finishing his course, and consequently, in getting a decent and good paying job." Sadly, such a ruling considers only the situation of Nadal without taking into account the circumstances clearly of his own making, which led him into such a predicament. More importantly, it has completely disregarded the overriding issue of academic freedom which provides more than ample justification for the imposition of a disciplinary sanction upon an erring student of an institution of higher learning. From the foregoing arguments, it is clear that the lower court should have restrained itself from assuming jurisdiction over the petition filed by Nadal. Mandamus is never issued in doubtful cases, a showing of a clear and certain right on the part of the petitioner being required. 38 It is of no avail against an official or government agency whose duty requires the exercise of discretion or judgment. 39 Hence, by issuing the writ of preliminary injunction, the lower court dared to tread upon legally forbidden grounds. For, by virtue of the writ, the University's exercise of academic freedom was peremptorily curtailed. Moreover, the door was flung wide open for Nadal to do exactly what the decision of the BOR prohibited him from doing and that is, to violate the suspension order by enrolling for the first semester of 1993-1994. It must have been with consternation that the University officials helplessly watching him complete his academic requirements for taking the Bar. 40 In the event that he be allowed to continue with his studies he would, in effect render moot and academic the disciplinary sanction of suspension legally imposed upon him by the BOR's final decision of March 29, 1993. What is to prevent other aspirants for STFAP scholarships from misleading the University authorities by misrepresenting certain facts or as in instant case, withholding vital information and stating downright falsehoods, in their application forms with impunity? Not only would this undermine the authority of the U.P. to discipline its students who violated the rules and regulations of the institution but, more importantly, subvert the very concept and lofty intent to give financial assistance to poor but deserving students through the STFAP which, incidentally, has not ceased refining and modifying it's operations.

UP regents

Dispensing with the filing of a motion for reconsideration, the petitioners filed the instant petition for certiorari and prohibition with prayer for the issuance of an injunction or temporary restraining order, raising the following issues: whether or not Nadal was denied due process in the administrative disciplinary proceedings against him, and, whether or not the respondent judge gravely abused her discretion in issuing the May 29, 1993 writ of preliminary injunction thereby preventing the BOR from implementing the suspension penalty it had imposed on Nadal. On the second issue presented for adjudication, the Court finds that the lower court gravely abused its discretion in issuing the writ of preliminary injunction of May 29, 1993. The issuance of the said writ was based on the lower court's finding that the implementation of the disciplinary sanction of suspension on Nadal "would work injustice to